Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 6, 1875, Volume II

No. 441.
Mr. Foster to Mr. Fish.

Legation of the United States,
Mexico, June 10, 1875. (Received June 29.)

No. 302.]

Sir: In my dispatch No. 226, of the 23d of December, 1874, I gave you information of the celebration of a contract between the executive of the republic of Mexico and Hon. E. L. Plumb, as the representative of the International Railroad Company of Texas, for the construction of a railroad from the city of Leon, in the State of Guanajuato, to Laredo or other point on the Rio Grande, to connect with the said International Railroad, and of the submission of said contract to the national Congress for its ratification.

I now have the honor to inform you that this contract was ratified by Congress, with unimportant modifications, by an almost unanimous vote on the 29th instant, and that it has been officially promulgated as a law. I inclose herewith a translation of the law, as also an editorial from the Two Republics, a newspaper published in this city, which editorial contains an abstract of the main features of the concession, and some well-considered remarks upon the enterprise and the effect which its realization is likely to have upon the interest of the two republics.

Communications between the two republics by an improved commercial land-route, which would afford free intercourse and trade, has always been a favorite measure with the Government of the United States. In the instructions which accompanied the appointment of our first minister to Mexico, Mr. Poinsett, which were written by the then Secretary of State, Henry Clay, our representative was particularly instructed to exert himself to secure the co-operation of the Mexican government in the construction of a projected road to connect the two nations, from Saint Louis through the Indian country, via Santa Fé and New Mexico, (see Mr. Clay to Mr. Poinsett, dispatch No. 1, March 25, 1825;) similar instructions were given by the succeeding Secretary of State, Martin Van Buren, (see Mr. Van Buren to Mr. Butler, dispatch No. 1, October 16, 1829.) The measure, in various forms, has been the subject, at different periods, both of diplomatic negotiation and of individual solicitation for concessions from the Mexican government, but the present contract is the first definitive and complete authority granted by this government for the construction of a railroad from the interior of the republic to connect with the railroad system of the United States.

The realization of the enterprise cannot fail to have a highly desirable influence upon both countries in their commercial, political, and social relations.

I am, &c.,

JOHN W. FOSTER.

[Inclosure 1 in No. 302.]

The international railroad.

[From the “Two Republics,” June 9, 1875.]

After negotiations which have extended over a period of nearly four years, a final and satisfactory result has been reached in the important preliminary work of the necessary legislation in Mexico for the International Railroad.

The contract, which was concluded on the 12th of December last, between the minister of public works, in representation of the executive of the union, and Mr. Edward Lee Plumb, in representation of the International Railroad Company of Texas, was ratified by the Mexican Congress on the 29th ultimo, by an almost unanimous vote—116 to 13. The corresponding decree has since then been officially published, and the concession is now a law.

In an extra of our paper of this week we publish a translation in full of this important document, taken from the Diario Oficial of the 7th instant.

The ratification by the Mexican Congress of the concession authorizing the construction and granting government aid for the railroad which is to be the great international highway of communication between Mexico and the United States, is an event of no ordinary public interest.

The immediate and powerful influence which the realization of this work will have upon the industrial development of Mexico, and the building up of an enormous commerce between the two countries, is, in the very nature of the case, almost self-evident. Establishing, as it will, direct and speedy means of communication between the central regions of population and production of Mexico and the principal centers of population and consumption in the United States, it will afford to Mexico an immense market for the tropical and other products which her peculiar climate and favorable soil is capable of yielding to an almost unlimited extent.

And not alone will the realization of this enterprise tend to develop commerce between Mexico and the United States; but, powerfully stimulating production in Mexico as it will, by the cheap and ready access that will be afforded to the markets of the United States, it will also, in an almost similar degree, tend to increase commercial relations between Mexico and Europe. The importation into Mexico of foreign effects is as yet limited because the ability of the country to buy is restricted. As the financial capacity of Mexico is increased by a profitable commerce with the United States, in tropical and other products, so her ability to buy from Europe, and to meet her financial obligations there, will be correspondingly increased.

It would be a very narrow view, and one not justified by experience, to imagine that the opening of direct communication by railroad between Mexico and the United States will diminish the business transacted by steamship with the Gulf ports, or will unfavorably affect commerce between Mexico and Europe. On the contrary, just as the general development and prosperity of the country is promoted so will its commerce with all parts of the world be augmented, and will flow freely by all the different means of communication which modern commerce stimulates and demands.

The concession which has now become a law provides for the construction of a railroad of the standard gauge, (4 feet 8½ inches,) from the city of Leon, in the State of Guanajuato, to the Rio Bravo del Norte, there to connect with the International Railroad of Texas. The precise line to be followed, whether by San Luis Potosi, or by Aguascalientes, Zacatecas, and Durango, is left to be determined as shall be found to be most practicable and desirable by the surveys.

The distance to be constructed is between six and seven hundred miles.

The obligations of the company to be formed are to deposit a bond for two hundred thousand dollars within six months from the date of .the law; to complete the survey of 200 kilometers (124 miles) within eighteen months; to complete the survey of the entire line within two years and a half; to commence work at the terminus on the Rio Grande within three years from the date of the law; to complete 100 kilometers (62 miles) of the road within fifteen months from the time fixed for the commencement of the work, and 120 kilometers each year, or 240 every two years thereafter; and to finish the entire line within nine years from the date of the law.

If the road is completed in one year less than the stipulated term of nine years, the company is to receive a premium of one hundred thousand dollars; if in two years less, a premium of two hundred thousand dollars for each of the two years; if in three years less, a premium of three hundred thousand dollars for each of the three years; and if in four years less than the prescribed term, the premium is four hundred thousand dollars for each of the four years.

In aid of the construction of the road, the Mexican government gives to the company, in the character of donation, a subvention of $9,500 per kilometer, ($15,288 per mile,) payable with 25 per cent. of all the import duties caused in the frontier customhouses of the Rio Grande and that of Matamoras. For this purpose a special paper is to be issued to the company on the completion of the first 100 kilometers and each 20 kilometers thereafter, with which alone the said percentage can be paid.

The road and property of the company is also exempted from all taxation for the period of fifty years, and everything required for the construction and operation of the road is admitted free of duty during the term of fifteen years.

As is evident, the terms of this concession manifest great liberality and breadth of view on the part of the government of Mexico, and are such as will secure the prompt and unhesitating realization of the work.

At the previous session of the Mexican Congress a concession was ratified for the construction of a railroad of the same gauge, (4 feet 8½ inches, which is also that of the Vera Cruz road,) from the city of Mexico to Leon, 280 miles, passing by the important cities of Queretaro, Celaya, Salamanca, and Guanajuato. This central road, which will be finished by the time the International Road is completed from the frontier to Leon, will afford, in connection with the International, an unbroken line of communication from the United States to this capital, and the important, interesting, and populous surrounding region. From Leon and the Central road, branches will also penetrate into the rich and important States of Michoacan and Jalisco, to Morelia and to Guadalajara, the capital of the latter State, a city of 75,000 inhabitants.

Leon is a city of 100,000 inhabitants, situated in the State of Guanajuato, which has a population of 900,000 in an area of but 11,411 square miles, or an average of 78.87 to the square mile, which is greater than that of the State of Ohio (68.69) or Pennsylvania, (76.56,) in the United States.

Accompanying the translation of the concession, published in our extra, are some statistics of population and of the probable future commerce between Mexico and the United States, which will prove of general interest.

The distance yet to be completed in Texas to carry the international railroad of that State to the Rio Grande is but 235 miles from Rockdale, the present terminus, to Laredo.

Of this the distance between Rockdale and Austin, the capital of the State, 62 miles, will probably be completed by the end of the present year. From Austin to San Antonio, 78 miles, the road will probably be constructed during the year 1876. From San Antonio to the Rio Grande is about 150 miles, over a very easy line. The completion of this link within the next three years will enable the construction of the Mexican international road to be commenced.

But it is not necessary to wait for the completion of the portion of the Texas International between Austin and San Antonio, to obtain access to the frontier. The Galveston, Harrisburg and San Antonio Railroad is now completed from Galveston to Luling, 201 miles, leaving but 60 miles, which will be built this year, to be completed to reach San Antonio, and thus afford transportation as far as that point from Galveston for rails and other materials for the Mexican international road. There are also other lines, partially constructed and projected, leading from the Gulf toward San Antonio and the border, by which transportation can be furnished in due time.

From all the information which reaches us, it appears probable that there will be an immense mineral development in the Mexican border States of Coahuila and Nuevo Leon, so soon as means of communication shall be provided for the introduction of machinery and supplies and the transportation of ores, either to Galveston for their shipment to Europe for reduction, or to Saint Louis, Mo., for their reduction at the extensive smelting-works which have been established at that place.

In the trade in cattle and wool there will also be an immediate and profitable commerce.

Penetrating farther into the State of Coahuila, a region of wonderful fertility for the production of cotton will he reached. The trade in tropical fruits will require a special train every day; and there remain the great staples of sugar and coffee, the products of the maguey, and a thousand other articles which will enter into the valuable commerce which is to be created by means of the international railroad between Mexico and the United States.

The government of Mexico, through its executive and legislative branches, has now freely opened the door for this great work, and the immense and profitable commerce between the two countries that will follow. It is for the connecting roads in the United States, which are to receive the vast traffic that will flow out from Mexico, to do their part to aid toward the prompt realization of this grand enterprise—the most important, useful, and desirable that now remains to be undertaken upon this continent.

[Inclosure 2 in No. 302.—Translation.]

The Mexican International Railroad.—Contract with the government of Mexico.—Approval by the Mexican Congress.

[From the “Diario Official,” Mexico, June 7, 1875.]

department of public works, colonization, industry, and commerce.—Section 3.

The President of the republic has been pleased to address to me the following decree:

“Sebastian Lerdo De Tejada, Constitutional President of the United Mexican States, to the inhabitants of the same, be it known:

“That the Congress of the union has thought proper to decree the following:

“The Congress of the union decrees:

“Sole Article. The contract concluded December 12, 1874, between the minister of public works, in representation of the executive of the union, and Edward Lee Plumb, in representation of the International Railroad Company of Texas, for the construction and operation of a railroad and its corresponding telegraph, from the city of Leon, in the State of Guanajuato, to the Rio Bravo del Norte, is hereby approved, in the following terms:

“Article 1. The International Railroad Company of Texas is hereby authorized to construct and operate a line of railroad and its corresponding telegraph, from the city of Leon, in the State of Guanajuato, to the Rio Bravo del Norte.

“The said line shall follow the direction which, according to the surveys of the company, approved by the department of public works, may appear to be the most desirable, in connection with the central line from the city of Mexico to Leon, to place the capital of the republic in communication, either by means of the main line or of the necessary branches, as nearly as may be practicable, with the cities of Lagos, Aguascalientes, Zacatecas, Durango, San Luis Potosí, Saltillo, and Monterey, terminating on the Rio Bravo del Norte at the point that may be the most convenient to form a connection with the International Railroad of Texas, which the said company is now constructing across the said State, and to establish a continuous line of connection from a point on the Central Railroad with the railroads of the United States.

“Art. 2. The said company is hereby authorized to immediately commence the necessary surveys, which shall be at its own expense, in order to determine the location of the lines of railroad designated in the present law.

“Before commencing the work of construction on the different sections of the line there shall be remitted to the department of public works, for its approval, a copy of the maps of survey and of the plans of the location of the road.

“The survey of the first 200 kilometers of the line shall be concluded, and the corresponding plan submitted to the department of public works for its approval, within the term of eighteen months, counted from the date of this law.

“The general survey of all of the line shall be concluded, and the corresponding plan submitted to the department of public works for its approval, within the term of two years and a half, counted from the date of this law.

“An engineer, appointed by the executive and paid by the company, may accompany each of the principal surveying parties of the said company, forty days’ previous notice being given by the latter to the government of the time when the surveys are to commence; but the said surveys shall not be delayed nor considered incomplete by reason of the absence of the engineers to be appointed by the executive.

“Art. 3. The work of construction on the line at the city of Leon, or at the point which, according to the surveys of the company, approved by the department of public works, may be found to be the most desirable to form a connection with the Central Railroad from the city of Mexico to Leon, shall commence within three months, counted from the date of the completion of the said Central line to Leon, or to the said point of connection, and that it shall be placed in operation.

“The work of construction at the terminus of the line on the Rio Bravo Del Norte shall commence on the Mexican side of the said river within three years, counted from the date of this law.

“Within fifteen months, counted from the termination of the period stipulated for the commencement of the work of construction at the one or the other extremity of the line, there shall be completed at least 100 kilometers (62.14 miles) of railroad of the said line.

“In each of the subsequent years there shall be constructed at least 120 kilometers, or 240 every two years, until the completion of all of the line of railroad to which this law refers.

“The work from the different points mentioned in this article shall be prosecuted in such manner as shall assure the completion of all the line of the railroad from the city of Leon, or the point of connection with the Central Railroad, to the Rio Bravo del Norte, within the term of nine years, counted from the date of this law.

“Art. 4. In case the company should complete the said railroad from the city of Leon to the Rio Bravo del Norte in a period of one year less than the stipulated term of nine years, the government will pay to the company, in the character of donation and as a premium, the sum of one hundred thousand dollars; if the road should be completed in two years less than the stipulated term the premium shall be two hundred thousand dollars for each one of the two years; if it should be completed in three years less than the stipulated term the premium shall be three hundred thousand dollars for each of the said three years; and if the road should be finished in four years less than the prescribed term the premium that the government will pay to the company shall be four hundred thousand dollars for each of the said four years.

“The said premium shall be paid to the company in certificates of the same character as those which are to be issued in conformity with the terms of the present law.

“Art. 5. For the purpose of the construction, possession, and operation of the line of railroad and telegraph designated in this law and under the provisions which in it are established, the said International Railroad Company of Texas obligates itself to organize in the United States of America a company to be denominated ‘The Mexican International Railroad Company.’

“The possession and exercise of all the rights and concessions which are conferred by the present law, as also the compliance with all the obligations imposed by it, will pertain to the Mexican International Railroad Company from the time of its organization, and before such organization to the International Railroad Company of Texas.

“The Mexican International Railroad Company, as also the said International Railroad Company of Texas, shall be considered as Mexican in all that relates to the present concessions; and all the persons who may take part in the same, whether as shareholders, employés, or in whatever other character, shall be considered as Mexican in all that relates to the said enterprise within the territory of the republic; they cannot allege rights as foreigners with respect to interests or affairs relating to the enterprise, nor can they have, even when alleging denial of justice, other rights nor other means of making them valid in whatever may concern the said enterprise than those which the laws of the republic concede to Mexicans, nor can they employ other proceedings than those established before the Mexican tribunals.

“Art. 6. The Mexican International Railroad Company shall not be considered as organized until there shall have been subscribed in good faith $2,000,000 of the capital stock, and paid in cash into the treasury of the company ten per cent. of the subscription, which facts, as also that of the formal organization of the company, shall be legally verified before the department of public works within the term of three months counted from the date stipulated in article 2, for the completion of the general survey.

“During one year, counted from the date of the said verification, the company shall place at the disposition of the public in Mexico, in order that it may subscribe there to, one-half of its capital stock upon the same terms in which the shares may be offered in the United States of America.

“After the expiration of said year the company shall be free to dispose of its shares in such place as it may deem convenient.

“The statutes of the said company and the bases of its organization shall be submitted to the department of public works for its approbation, within the term of three months, counted from the date stipulated in article 2, for the completion of the general survey.

“Art. 7. The company shall have a domicile in the republic of Mexico, where a part of its board of directors, composed of five members, shall reside, of whom two shall be appointed by the executive and three shall be appointed by the company.

“This part of the board, as also the part of the direction which may be established in the United States of America, shall exercise the functions which may be conceded to them by the statutes, and shall have the powers which, from time to time, may be conferred upon them in a general meeting of the shareholders.

“The company shall appoint in this capital a representative fully authorized and empowered to treat with the federal government and other authorities of the republic with reference to all affairs relative to the obligations which are imposed upon it by this law, and whatever in the future may be executed or agreed upon with relation to the same.

“Whenever any doubt or question shall arise with respect to the interpretation of or compliance with the stipulations of the present contract, it shall be decided by the competent federal tribunals of the republic, and in conformity with the laws of the same.

“Art. 8. Neither the company to which this concession is made nor that which it may form can at any time transfer, alienate, or hypothecate the concessions of the present law, the railroad, the telegraph, and the property annexed thereto, nor the shares it may emit, to any foreign government or State, nor admit the same in any case as partner in the enterprise; and any stipulation made in violotion of this precept shall be null and of no effect.

“Nor can the Mexican International Railroad Company transfer or alienate the concessions of this law to any company or private individual without the previous permission of the federal executive, and any transfer or alienation made without this requisite shall be also null and without effect.

“The company, nevertheless, is hereby authorized freely to emit shares, bonds, and obligations, and to dispose of the same, as also to hypothecate the railroad and its appurtenances, with the right of operating the same, and the telegraph line, in whole or in part, as the construction of the same may progress, to secure the payment of said bonds and obligations and interest thereupon, with the condition that the mortgage shall be made in favor of individuals or of private associations.

“The mortgages that may be made by said company shall be registered in the office of public records of the city of Mexico, and this registry shall be held as sufficient proof of their validity and legal execution in all that relates to all of the lines of the railroad of the company, and local registry in the States or places where the road may pass shall not be necessary.

“Art. 9. The capital stock of the company shall not exceed $25,000,000, divided into shares of $100 each.

“The said shares shall be Considered as personal property, which may be freely transferred or disposed of in conformity with the laws and with the rights and privileges accorded in this concession.

“The line of railway itself, to which this law refers, and the lands and other property legally acquired by the company by virtue of cession or purchase, the edifices, warehouses, stations, machinery, utensils, materials, and all other objects which constitute the railroad and telegraph line, as also its branches and appurtenances, shall be considered as the property of the company, with the right of making use of the same upon the same terms and under the same conditions as whatever other property, but subject to the provisions of the laws actually in force, or that in the future may be decreed with regard to railroads, without it being understood by this that the conditions of this contract cannot be altered.

“Even in the case that, from the causes which hereinafter are specified, the present concession should become void, the company shall enjoy the full control, possession, and use of all the property, and of the portions of railroad and telegraph line that it may have constructed, and will preserve unalterable its right to the payment by the government, in the form prescribed in article 12, of the subvention that may be due to it for the kilometers that may have been constructed, there remaining in force with regard to the portion or portions of railroad and telegraph line that the company may have, the obligations which, with reference to all the line, are established by this law.

“Art. 10. The railroad of the said company shall be of single or double track, of 1.45 meters in width, (four feet eight-and one half English inches;) it shall be of a solid construction, and shall be provided with a sufficient quantity of rolling-stock for the prompt and effective working of the road, and warehouses and stations shall be established at all the places that may be required by the public interest and the business of the company, in the judgment of its engineers.

“The company hall have the right of connecting the railway which it is about to construct, with any other railroad now existing, or that may hereafter be constructed in the republic; and it shall also have the right to operate and maintain its railroad in connection or consolidation with any other railroad company, by agreement with the same, under such terms as it may deem most advantageous.

“Art. 11. In order to aid the construction of the lines of railroad and telegraph to which this concession refers, the government binds itself to give to the company, in the character of donation, a subvention of $9,500 for each kilometer ($15,288 per mile) of railroad that it constructs, and that shall be approved by the department of public works, according to the terms of this law; but this subvention shall only have effect when the company shall have constructed and placed in operation the first one hundred kilometers of railroad, and successively for sections of twenty kilometers completed, approved by the department of public works and placed in operation; and the obligation contracted by the government in no case shall be extended to give subvention for a distance which shall exceed a total of thirteen hundred kilometers.

“Art. 12. In order to render effective the said subvention, there shall be issued by the government, in favor of the company, immediately that each section of railroad shall have been completed, approved, and opened to public use, obligations for the amount corresponding to the said subvention, without causing interest, under the title of construction certificates of the Mexican International Railroad,’ which shall be redeemed with 25 per cent. of all of the import duties that may be caused in the frontier custom-houses of the Rio Bravo del Norte, and in that of Matamoras, as also in the custom-house which may be established at the point on the Rio Bravo where the railroad shall terminate, if the same should not be one of those already mentioned.

“These certificates shall be issued by the department of public works, and shall commence to be redeemed from the 1st of January of the year following that of the beginning of their emission. From that date no importer shall pay in money, nor in any other manner but in the said paper, 25 per cent. of the duties that may be caused in the said custom-houses, under the penalty of being subject to second, payment, which shall be of double the sum to which the quota would have amounted, and paying the same one-half in paper in order that the provision of the law shall be in all eases complied with, and the other half in money applicable, according to the regulations of the law of forfeitures, to the informers.

“Art. 13. The company shall be obliged to maintain, in all of the points mentioned, a sufficient quantity of the said certificates in order that those paying duties may be able to obtain the same with due opportunity.

“In no case can the company sell the certificates at a higher price than that of their representative value, under the penalty of returning to the purchaser the excess, and of paying treble the amount as a fine in favor of the treasury.

“Art. 14. For the construction and operation of the lines of railroad and telegraph authorized by this law, there is hereby conceded to the company the right of way for the width of sixty meters (one hundred and ninety-seven feet) in all the extent of the line.

“The lands belonging to the government, which may be occupied by the line for the width established, and the land necessary for stations, warehouses, and other edifices, water-tanks, and other indispensable accessories of the road and its appurtenances, if the same shall be of national property, shall be delivered to the company without any compensation and in perpetual property.

“In the same manner the company can take from the public lands materials of all kinds that maybe necessary for the construction, operation, and repair of the road and its appurtenances.

“The company can take, in conformity with the laws of expropriation for purposes of public utility, the lands and materials of construction belonging to private individuals, and those that may not be national property, necessary for the establishment and repair of the railroad and its appurtenances, stations, and other accessories; and until these laws shall be issued by the congress of the Union, the company shall be subject to the following provisions:

• “I. In case of disagreement between the company and the owner of the lands and of materials of construction, which are private property, the department of public works is hereby authorized to decree, at the petition of the company, the expropriation of the private property the occupation of which shall be necessary.
• “Such property shall be taken upon previous indemnification being made, which shall be determined by two experts, appointed one by each party, who, before commencing to act, shall select a third to decide in case of disagreement. If the experts should not agree in the selection of a third, the latter shall be appointed by the department of public works.
• “II. If the occupant or owner of the property shall be unknown or doubtful, whether by reason of litigation or other motive, or shall refuse to appoint an appraiser, either under judicial process, or apart from the same, the executive shall authorize the occupation of the said property upon the previous deposit by the company of the sum which in each case shall be determined by an expert appointed by the executive, subject to the condition of making good, when the occupant or owner shall be decided, such further value as in the appraisement by experts may be ordered in conformity with the preceding rule, or of withdrawing the excess of the deposit if the award shall be for a less sum.
• “III. The experts, in making their appraisal, shall take into consideration the amount of taxes paid by the property the expropriation of which is treated of/and the injuries or benefits which may result therefrom to the proprietor.

“In no case can the company expropriate the deposits of water, whether natural or artificial, nor the works necessary for their preservation; but it can take the water required for the supply of the locomotives and the indispensable use of the stations, subjecting itself in this to the prescriptions of the laws.

“All mines of metals, as also those of coal and salt, marble and other workable mineral deposits, which may be encountered in the works and excavations which may be made on the line of the road and its branches, shall be the property of the company, without prejudice to third parties, with the condition that the same shall be denounced and worked subject in all respects to the mining ordinances.

“Art. 15. Materials of construction, whether of native or foreign production or derivation, effects, and whatever maybe necessary for the construction and use of the lines of railroad and telegraph authorized by this law, as also the rails, sleepers, spikes, locomotives, carriages, trains, and their accessories, tools and instruments of labor, machinery for the workshops, iron, bridges, houses for stations, offices, and warehouses, coal, working animals, their harness and gearing, carts and wagons, telegraphic wire and apparatus, and all other materials necessary for the construction, operation, and repair of the railroad and telegraph line, shall be free for the term of fifteen years, counted from the date of this law, from all import or custom-house duties, whatever, previous notice being given to the department of public works, and from excise duties, contributions, road-taxes, or imposts decreed up to the present time, or that may hereafter be decreed by whatever authority of the republic, and whatever may be the class, denomination, or object of the said imposts.

“In the use of these exemptions there shall be observed the regulations that may be issued by the departments of treasury and of public works.

“The road itself and its natural and indispensable appurtenances, as also the capital employed in its construction and operation, and the shares of the company, shall be exempt during the term of fifty years, counted from the date of this law, from the payment of all contributions or imposts now established, or that may be established in the future.

“Art. 16. The directors, engineers, employés, and the subordinates of the offices and stations of the railroad, as also the laborers that may be employed upon it, shall be exempt from all kinds of military service and from municipal services during the time they may be employed upon the road, except in case of foreign war.

“The company shall have the right to organize the interior service of its lines and its guard, which latter shall enjoy the same consideration as the guards of the national revenue.

“The company shall immediately discharge from its service any of its employés who may enter into or protect contraband traffic, or commit any crime, and shall aid the authorities in their apprehension.

“It is also obliged to comply on its part with the regulations that may be issued by the department of treasury for the prevention of contraband traffic and for the observance of the fiscal laws.

“The federal government and the governments of the States shall extend to the company all the aid and protection that may depend upon their authority, without prejudice to third parties, and the same shall be extended by the local authorities, without the necessity of superior order or requisition.

“All persons stealing rails, or damaging or interfering with the road in any manner, may be arrested by the company’s guard and delivered to the competent judge, in order that they may be punished according to the gravity of their offense.

“The company shall be responsible for the payment of the wages of the laborers, the cost of materials, and all the expenses incurred in the construction of the road, even when the work may be executed by contractors or subcontractors, for the said work is executed by the latter in behalf of the company.

“Art. 17. Upon the definitive location by the company, with the approval of the department of public works, of the direction of the line, the said company is hereby authorized to make, at the point of termination on the Rio Bravo del Norte, the improvements which may be necessary or desirable for the security and facility of the traffic, and may acquire and possess the necessary land at each of the extremities of the line, for the purpose of establishing warehouses, depots, workshops, and other works necessary to facilitate the construction and operation of the railroad.

“Art. 18. The sections of railroad, as the same may be completed by the company, shall be immediately examined at its expense by an engineer appointed by the executive, and the latter, upon hearing the report of the engineer, will authorize or not the opening of the section for business.

“In case of not authorizing the opening, the executive shall publish the report of the engineer who may have intervened, and the causes of the dissent.

“Immediately upon placing in public use the sections of the road, the company shall fix the tariff of prices that are to be charged for the transportation of passengers, merchandise, and other freight, which shall not exceed the following rates:

“For the freight of each ton of twenty quintals, of 45.38 kilograms each, [2,000 lbs.] of merchandise:

“First class, 6 cents per kilometer. [9.65 cents per mile.]

“Second class, 4 cents per kilometer. [6.43 cents per mile.]

“Third class, 2½ cents per kilometer. [4.02 cents per mile.]

“For the transportation of passengers:

“First class, 4 cents per kilometer. [6.43 cents per mile.]

“Second class, 2–½ cents per kilometer. [4.02 cents per mile.]

“The company shall not be obliged to receive less than twenty-five cents for any quantity of freight, nor less than ten cents for passage for any distance.

“The company shall have the right to establish its tariff of freight and passage with reference to the difficulties and expenses of operating the different portions of the line, without the necessity of observing a proportion to the number of kilometers of the entire line, with the condition that the freight and passage shall not exceed in any kilometer the maximum prescribed in this article.

“Special tariffs may be established, which shall be submitted to the approbation of the executive, for such objects or effects as cannot properly be subjected to weight or measure.

“Two years after the completion of all of the line and its having been placed in operation, the company, in accord with the executive, shall modify the tariff of freight and passage; but without preventing that the dividends to the shareholders shall be at least ten per cent. per annum.

“In case of modification by the company of its tariff containing rates less than the maximum prescribed in this contract, or less than the maximum that may be established after two years, in conformity with the preceding clause, the said alteration shall not commence to take effect in case of raising the rates of freight on merchandise within the maximum, until after four months’ notice to the public, nor within two months in case of lowering the rates.

“The distribution of effects in the three classes of the freight tariff shall be made in accord with the government every two years, counted from the completion of the road, should not the law prescribe for this purpose in the future longer periods.

“From the commencement of the operation of the road to Aguascalientes, and successively that of the subsequent sections, cereals of national, production shall be included always in the third class.

“Rails and materials destined for the construction and operation of railroads in the country shall also always be included in the third class.

“The charge for telegrams which may be transmitted by the lines of the company shall not exceed the following:

“For each message not exceeding ten words beside the date, address, and signature, that may be transmitted a distance not exceeding one hundred kilometers, twenty-five cents.

“For each additional ten kilometers of distance, or for each word contained in the message above the first ten, there shall be paid not to exceed the proportional part of the rate of twenty-five cents for ten words, for one hundred kilometers.

“The federal government shall have the right to place one or two telegraph wires on the posts of the company, and the latter the obligation to preserve the same in the same condition as that of its own property. Both services shall be rendered gratuitously, it being solely the duty of the executive to indemnify the company for the value of the wires that may be replaced.

“The federal government shall establish its telegraph-offices independent from those of the company, and shall retain the right to the said telegraph wires only so long as it may possess and administer the same.

“Art. 19. The government shall have the privilege, in the transportation of troops, trains, munitions, equipage, provisions, horses, mules, and whatever other object or effect destined to the public service that may be proceeding from one point to another on the lines of the company, as also in the passage of officers of the army and federal employés traveling on public service, a reduction of 50 per cent. upon the prices charged according to the general tariff: but to avoid abuses which in this respect might be committed, it is hereby stipulated that in each instance of the dispatch of troops or the transportation of trains, munitions, or effects, and of passage, there shall be given by the government, or by the superior functionaries authorized for this purpose by the government, a special order for the directors of the line.

“Immigrants arriving in the republic with the due authorization of the government shall enjoy the advantages conceded to the armed force.

“For the term of fifteen years, counted from the completion of the first section, the company will perform gratis on its lines of railroad, as the same may be placed in operation, the transportation of correspondence, printed matter, and employés dispatched by the post-office department in the service of the same; but this service shall be in such manner that there shall not be caused on that account any variation in the regulations and orders of the company with regard to hours of departure and stoppages at the points which it may think proper to determine.

“After the said fifteen years the mail service upon the lines of the company will be a matter of contract.

“Art. 20. The obligations contracted by the company with regard to the periods of time stipulated in this law, shall be suspended in all fortuitous cases or of fuerza mayor, which may impede the fulfillment of .the said obligations; such suspension shall continue only for the time of the continuance of the impediment, it being the obligation of the company to present to the executive within the term of three months after the commencement of the impediment information and proof that such fortuitous case or of fuerza mayor, of the character mentioned, has occurred.

“From the sole fact of not presenting the information and proof within the time stipulated, the company shall be debarred from at anytime thereafter alleging the occurrence of such fortuitous case or of fuerza mayor.

“The company shall also present to the executive information and proof that the work has been resumed immediately that the impediment has ceased, or at least within two months thereafter; which said information and proof shall be presented within the two months following the two first mentioned.

“There shall be allowed to the company only the time that the impediment may have continued, or at the most two months more.

“There shall be allowed to the company the time that the executive may employ in the examination and approval of the plans referred to in article 2 of this law, if this time shall be more than one month.

“Art. 21. Beside the other obligations expressed in this law the company shall have the following:

• “I. It shall not transport any foreign armed force without the express permission of the federal government.
• “II. It shall not transport effects belonging to a belligerent power, or declared contraband of war by the laws of the Mexican Republic, without the express authorization of the federal government.
• “III. Within six months from the date of this law the company shall give a bond in the city of Mexico satisfactory to the executive, to the amount of two hundred thousand dollars, this requisite being indispensable for the existence and validity of the concessions made in this law; and the said sum shall be forfeited by the company in case of non-compliance with the obligations stipulated in article 3.

“Art. 22. The concessions granted by this law shall be forfeited from either of the following causes:

• “I. From failure to comply with the obligations specified in the clauses of the preceding article.
• “II. For not constructing the first 100 kilometers, the sections of 240 kilometers, and not completing all of the road within the time stipulated in article 3.
• “III. For alienating or transferring this concession, or the rights derived from it, to any foreign government or state, or by admitting the same as partner in the enterprise.

“In whichever of the cases so specified the company shall forfeit the concessions granted by this law, of which the government can ten dispose at its pleasure; but the said company shall retain the ownership of the edifices which it may have constructed, of the part of the railroad and telegraph which it may have completed, and of the materials, machinery, and other objects employed in its operation.

“Art. 23. The company shall present to the department of public works an annual report, setting forth the operations in each fiscal year, which shall terminate on the last day of June, of the lines of railroad constructed by it.

“This report shall be made under affirmation that it is true, and shall show the financial situation of the company; the amount of money received and expended; the amount and character of its debts, and the various kinds of the same, as also what may be due to the company; the total amount of shares issued; the names and residences of the directors and chief employés of the company; the number of kilometers of road constructed and in operation each year; a description of the sections of the road surveyed and in process of construction; the amount received from passengers and for freight respectively; the expenses of the road in operation and its acessories; the number of passengers carried, and the amount of freight transported, specifying the classes of the same.

“Palace of the legislative power, Mexico, May 29, 1875.

“JULIO ZÁRATE,
“Deputy President.

“LUIS G. ALVIREZ,
“Deputy Secretary.

“J. V. VILLA DA,
“Deputy Secretary.”

Wherefore I order that the same he printed, published, circulated, and that due compliance be given to it.

Given in the national palace of Mexico, the 5th of June, 1875.

SEBASTIAN LERDO DE TEJADA.

To the Citizen Bias Baleárcel, Minister of Fomento, Colonization, Industry and Commerce.

And I communicate the same to you for your information and the consequent ends.

Independence and liberty. Mexico, June 5, 1875.

BALCÁRCEL,

A true copy. Mexico, June 5, 1875.

M. BUSTAMANTE.