No. 236.
Mr. Foster
to Mr. Evarts.
Mexico , August 3, 1877. (Received September 4.)
Sir: The department of public works has recently published a report made by the government inspector of railroads. As Mexican railroad investments and concessions have been the subject of considerable interest and inquiry in the United States, I have thought it desirable to notice some of the facts contained in the report alluded to, and to refer to the present condition of railroad enterprises in Mexico. There is only one railroad in the country of any considerable extent, which is known as “The Mexican Railway,” extending from the port of Vera Cruz to the city of Mexico, with a branch connecting the city of Puebla with the main line, being 292½ miles. Connected with the main line there is also a branch which leaves it 9½ miles from Vera Cruz, extending to the city of Jalapa, a distance of 61¼ miles, making the entire length of the Mexican [Page 427] Railway 353¾ miles. There are besides, in the valley of Mexico, at Vera Cruz and other points, several short lines in operation, but all aggregating less than fifty miles.
A charter or concession for the Mexican Railway was first granted in 1837, but owing to the revolutions, financial embarrassments of the nation, and other causes, all that had been accomplished up to 1865 was a survey of the route and the construction of nine miles of road on the Vera Cruz end and three miles at the city of Mexico.
In 1864 Don Antonio Escandon, who had held the concession since 1857, transferred it to an English company, and during the Maximilian government the construction was pushed forward with much vigor, so that on the restoration of the republican government 134 miles of road were in operation, and a considerable part of the heavy grading on the mountain portion of the route was well advanced, but it was not until January, 1873, that the entire line from Vera Cruz to the city of Mexico was completed.
The Jalapa branch was not opened to traffic till June, 1875. Owing to its heavy grades, which attain a maximum of eight feet per hundred, animal traction and small cars are used on this branch.
On the mountain portion of the main line the maximum grade is four feet per hundred, on which the “Fairlie” engine, a heavy English locomotive, is used, although the American “Baldwin” locomotive has been introduced with very satisfactory results. During the first years of the road, cars of the English system and construction were employed, but these are now being substituted with American cars.
The following statement of the Mexican Railway is taken from the report of the government inspector:
Statement of capital and cost of construction.
| original stock. | |
| General shares | $7,658,450 |
| Government shares | 3,633,100 |
| privileged shares. | |
| First issue, 8 per cent | 12,770,500 |
| Second issue, 6 per cent | 5,059 800 |
| in bonded indebtedness. | |
| “A” bounds, 8 per cent | 2,200,000 |
| “B” bounds, 7 per cent | 5,380,885 |
| Special privileged indetedness bearing interest, about | 1,000,000 |
| 37,702,735 | |
The company’s main office is in London, and is controlled by a directory of ten members elected by the shareholders and four members appointed by the Mexican Government. Three of the former and two of the latter compose a local board in the city of Mexico.
Owing to the revolution which was going on during 1876 the operations of the main line were considerably embarrassed, and the Jalapa branch was suspended during the greater part of the year. The following figures as to the workings of the main line are taken from the recent reports of the directors, the Jalapa branch being omitted: [Page 428]
Length of main line 292½ miles.
total earnings.
| 1876. | 1875. | 1874. | |||||||
| Passengers | £65,879 | 14s. | 8d. | £90,101 | 2s. | 6d. | £80,846 | 17s. | 4d. |
| Freight | 369,749 | 14 | 3 | 384,020 | 1 | 10 | 379,668 | 12 | 11 |
| 435,629 | 8 | 11 | 474,121 | 4 | 4 | 469,515 | 10 | 3 | |
Total working expenditures: 1876, £269, 693 0s.3d; 1875, £249, 886 9s. 4d.; 1874, £245,026 6s. 3d.
The total working expenditures being the following percentage of the earnings: 1876, 61.90; 1875, 52.70; 1874, 52.18.
passenger traffic.
| Number. | Miles. | Fares. | ||||
| 1876. | 1875. | 1876. | 1875. | 1876. | 1875. | |
| First class | 15,436 | 19,084 | 1,470,318 | 1,781,389 | £15,222 | £19,777 |
| Second class | 28,531 | 49,926 | 1,787,412 | 2,781,146 | 15,115 | 25,122 |
| Third class | 194,965 | 186,067 | 10,978,269 | 9,125,176 | 42,919 | 47,285 |
| 238,932 | 255,077 | 14,235,999 | 13,687,711 | 73,256 | 92,184 | |
Of the above passengers there were 9,400 military in 1875, and 57,964 in 1876, at government rates.
freight traffic.
(In tons of 1,000 kilograms.)
| Year. | Up freight. | Down freight. | Total. |
| 1876 | 87,259 | 36,258 | 123,517 |
| 1875 | 88,345 | 35,978 | 124,323 |
| 1874 | 84,001 | 30,026 | 114,027 |
passenger rates.
From Vera Cruz to city of Mexico, 263¼ miles, first class, $16; second classy $12.50; third class, $7.25.
Each passenger is allowed 32 pounds of baggage. All excess is charged at the rate of $97.77 per ton on passenger trains.
freight rates.
From Vera Cruz to Mexico, per ton: On foreign goods, first class, $76.05; second class, $65.18; third class, $54.32. On national products, first class, $38.02; second class, $32.59; third class, $27.16.
At the conclusion of the road there was due the company a large sum from the government by way of subsidy for the construction, for the [Page 429] payment of which the government had pledged 15 per cent, of the customs receipts. In settlement of this claim a convention or contract was made between the government and the railroad company, by which the former agreed, in lieu of the amount due on the subsidy, to pay the company the annual sum of $560,000 for the period of twenty-five years; and the company agreed to a considerable reduction from the charter rates in the tariff of passenger and freight-charges, and extended the privileges enjoyed by the government in the way of transportation of troops, mails, &c. Owing to the revolution and change of government this annual payment has been suspended for more than a year past, and there is now due the company from the government about $1,000,000.
A demand is made on the part of a certain portion of the press and of the Mexican public for a still greater reduction of the tariff charges by congressional legislation; but the company maintains that the present tariff was established by means of a contract which cannot be modified by legislation without the consent of the company. This subject will probably attract considerable attention in the approaching national congress.
Although it has been acknowledged for years past that one of the greatest wants of the country is the construction of railroads to unite the centers of population and to give an outlet to both oceans for the products of the interior, the railroad from Vera Cruz to the city of Mexico is the only one that has as yet been constructed. Much time has been wasted by congress in the contentions of friends of rival projects. A concession was granted in 1874 to a Mexican organization in preference to American applicants for the construction of a railroad from this city to the large cities of the interior; and this company having failed completely to comply with its concession, a new grant was made to another organization in which Messrs. Barron, Forbes & Company, a resident English house, were the principal members.
The work of construction was entered upon, but the revolution of last year almost paralyzed its operations, and, on the advent of the revolutionary government, the concession was revoked by an executive order, and all the works were declared as forfeited.
A detailed account of this transaction has already been given in my No. 524, of April 24 last. The subject of railroad concessions will doubtless be a leading topic in the deliberations of the next session of congress. Although it is acknowledged that the capital to construct the railroads so greatly needed in Mexico must, in a great measure, come from abroad, yet, owing to the failure of the government to recognize or pay interest on its foreign debt for years past, and on account of the recent revolution, there is an apparent reluctance on the part of foreign capitalists to invest in Mexican public enterprises. An adjustment of the debt, a restoration of confidence in a stable government, and security and guarantees to foreign capital appear necessary to obtain the inauguration of railroad construction on any scale commensurate with the urgent wants of the country.
I am, &c.,