No. 374.
Mr. Foster
to Mr. Evarts.
Mexico, October 25, 1878. (Received November 6.)
Sir: In previous dispatches I have referred to the extensive contraband trade which has unsettled commerce and greatly reduced the receipts [Page 661] of the national treasury. As I have stated, an effort has been made to create the impression that this illicit commerce is mainly confined to the Texas frontier.
There is no question but that the existence of the Zona Libre gives great facilities to this traffic, but, as I have shown from the declarations of the minister of the treasury and the newspapers of Mazatlan on the Pacific coast, the evil exists in other parts of the republic.
Confirmatory of this assertion, the Diario Oficial, of the 21st instant, publishes a communication from the minister of the treasury to the collector of the customs of Alvarado, a port on the Gulf of Mexico, in the south part of the State of Vera Cruz, calling his attention to the fact that the contraband trade is extensively carried on through that port; that it is protected by almost all the inhabitants of that district; and that unless effective measures are enforced to prevent such trade, the President will order the closing of said port to all commerce.
In the same official paper reference is made to the straitened condition of the federal treasury, which is so great that it announces that some days the treasury does not contain more than $2,000 or $3,000, and that even the employés of that department have not been paid their salaries for the month of September, as already noticed; the total cash receipts for the month of September, excluding a small balance, were $769,595.36; while the budget of appropriation for the current year made the expenditures $19,000,000, or near $1,600,000 per month. It has been announced in the official newspaper that the present and next month would materially improve the national finances, on account of the increased receipts of the Vera Cruz custom-house, upon which the government chiefly depends for its support. But I am informed on good authority that said custom-house will not yield the federal treasury for the present month more than $400,000; and that its net receipts for the month of November will even fall below that sum, on account of the small amount of orders sent abroad for importations. For the corresponding months of last year, the receipts at Vera Cruz were about $900,000 for each month; showing a decrease for the present year to less than half that sum.
The worst feature of this state of affairs is that it seems to presage increased taxation, extraordinary contributions, or forced loans; and these are the sure forerunners of a revolution, which too often results in a change of government. Beyond the distress and complaint arising from the failure of the government to pay its employés and meet its obligations, there is no outward indication of civil war; and if it is possible to keep the army paid with reasonable punctuality, the peace is likely to be preserved, for the early future at least.
I am, &c.,