No. 38.
Mr. Skilton to Mr. Hunter.

[Extract.]
No. 191.]

Sir: * * * * * * *

The goods which can be imported into Mexico from the United States with advantage are principally prints, low classes of dry-goods, hardware, house-furnishing goods, arms, and machinery.

The representatives of American houses who have visited this capital and other parts of the country here during the past year have received orders for goods to a considerable amount, and the demand will increase, as said goods are giving satisfaction. One hardware house alone, established in this city, will retail over $200,000 of American goods during the current year.

The railway rates from Vera Cruz to the city of Mexico are as follows: First-class freight, $76.05 per ton $ second-class freight, $65.18 per ton 5 third-class freight, $54.32 per ton, in Mexican dollars. The average freight may be calculated at second class, but a large portion goes through as third class, especially on articles from the United States. If a reduction could be obtained on these rates, as well as on those of the over-sea steamers, as referred to hereafter in the present report, trade would be largely increased.

It is the belief of this consulate-general that legislation on the part of the Congress of the United States can increase the commerce between the United States and Mexico by granting a subsidy to a line of steamers carrying freight between the ports of New York and New Orleans and Vera Cruz and Tampico. Such subsidy should be sufficiently great to enable such line of steamers to reduce their rates of freight so much lower than those collected by the lines running to the Mexican Gulf ports from Liverpool and St. Nazaire, as to induce buyers in Mexico to seek their purchases in the United States.

The present large importing houses of Mexico are such as have generally existed for many years, the oldest partners retiring to Europe or elsewhere, upon acquiring a competent fortune, and leaving their sons or younger partners or clerks to follow in the same channel. These houses have had, for years, their agents and correspondents in the various manufacturing and business cities of Europe, from whom they have ordered and order goods. It will be difficult to induce such Mexican [Page 120] buyers to escape from this routine, unless low freights as well as reduced prices call loudly for their attention. But it is believed that much can be accomplished by the legislation above referred to. The time now occupied in ordering goods for Mexico, for delivery at Vera Cruz and Tampico, and receiving the same is usually from three to four months, while by ordering and duplicating orders through the telegraph via Matamoras and New Orleans, from fifteen to twenty days will be sufficient for the receipt of goods at Vera Cruz, resulting in diminution of exchange on funds, interest on money employed, &c. Should buyers prefer to pay for their goods by shipments to the United States, such shipments will naturally be increased, as well as the duties arising to the United States Treasury; for such increased exports and imports must be many times greater than the sum necessary to subsidize a line of steamers, so that their rates of freight can be reduced to a schedule from 25 to 40 per cent. less than that of the European lines running to Mexico. The present rate of freights to Vera Cruz from the European ports, is as I am informed from $7.35 to $36.37 per ton, while the rates by the lines of F. Alexandre & Sons, as I am informed, are $14.10 to $23.50 per ton from New York to Vera Cruz and $10.50 to $16.36 from New Orleans to Vera Cruz.

I add hereto a communication received by me, on this subject, from Mr. John Alexandre, of the firm of F. Alexandre & Sons, of New York, who happens to be in this city, from which you will observe that it is his opinion that his line can reduce even their present rates of freight from 25 to 50 per cent. by receiving a subsidy from the government of the United States of $125,000 per annum for the New York and Vera Cruz line, and $75,000 per annum for the New Orleans and Vera Cruz line:

Mexico, December 14, 1877.

Hon. J. A. Skilton,
Consul-General of the United States, Mexico:

Dear Sir: In answer to your inquiry respecting the difference between the present rates of freight charges by the different English and French lines of steamers from Europe to Vera Cruz, and those charged by our line (Alexandre line) from New York to Vera Cruz and from New Orleans to Vera Cruz, running every three weeks, I beg to state that although I am away from the headquarters of our lines (New York), still I think that I can answer your inquiry sufficiently for the present.

As per within copies of bills of lading for goods arrived this year at Vera Cruz, ex Royal Mail Packet Company from Southampton, ex French Transatlantic Company from France, ex West India and Pacific Steamship Line from Liverpool ex Liverpool Line from Liverpool, you will see that these lines charged from 30 shillings and 10 per cent. primage to 135 shillings and 10 per cent. primage per ton of 40 cubic feet, or 2,240 pounds, at option of steamer, which, in our money, is $7.35 to $36.37 gold per ton; while the rates charged by our line at present are: from New York, 35 cents per cubic foot, or 1 cent per pound and 5 per cent. primage; from New Orleans, 25 cents per cubic foot, or ¾ cent per pound, and 5 per cent. primage; which is equal to $11.70 to $23.50 per ton from New York, and $10.50 to $16.36 per ton from New Orleans.

In answer to your inquiry, whether, in my opinion, “the trade in export of manufactured and other goods from the United States to Mexico would increase if the American Government would grant aid (subsidy) to our line of steamers, so as to ran the steamers oftener, and particularly to allow us to lower our rates of freight, so low that American manufacturers could compete with Europe in furnishing a large percentage of what now comes all from Europe;” to this inquiry I can easily answer it, and I think you or anyone else will understand that if our government gave us a subsidy of about $125,000 per annum for the New York line and $75,000 per annum for the New Orleans line, which sums are not one-half of what the French and English lines receive we could reduce our rates of freight, say 25 per cent. to 33 per cent., and even 50 per cent. (the latter on cheap goods), which would enable American merchants and manufacturers to compete successfully for the Mexican trade, or, at least a large portion of it, besides offering more frequent communication, resulting, that, before long the United States would have a very large demand for its manufactures.

From the last report of the French line it is stated that they received from their government, as subsidy, the sum of 2,208,864 francs, equal to $441,773, gold, per annum. [Page 121] The exact sum received by the English lines I am not prepared to give, but I feel confident it is also a very considerable sum.

With the aid our lines receive since 1867 from the Mexican Government, you are aware of the increased benefits to both the United States and Mexico, so if we received greater aid, you can easily understand that we would be in a fine position to take away from Europe a large percentage of a trade now almost wholly monopolized by England and France.

Very respectfully,

JNO. E. ALEXANDRE.

I am, &c.,

JULIUS A. SKILTON,
Consul-General.