No. 356.
Mr. Foster to Mr. Evarts.

No. 969.]

Sir: In my No. 966, of the 31st ultimo, on the adjournment and action of the Mexican Congress, I referred to the revenue laws passed levying new taxes upon textile fabrics of domestic manufacture, and in regard to smuggling.

For many years past it has been the settled policy of all administrations of the Mexican Government to encourage home manufacturers, and especially those of cotton and woolen goods. To this end they have been in great measure exempted from taxation and are protected by a tariff on the importation of similar foreign goods so heavy that in most cases the duties exceed the cost of the articles. For instance, the following are some of these duties in the existing tariff: Unbleached domestics, 9 cents per square meter; bleached domestics, 16 cents; prints or calicoes, 14 cents; white cotton-thread, 60 cents per kilogram$ colored thread, 96 cents; cassimeres and similar woolen goods, $1.40 per square meter. I inclose herewith an extract from the revenue law passed at the recent session of Congress, which levies a tax upon all this class of goods of domestic manufacture. It is estimated that the total annual production of the cotton and woolen manufactories aggregate $20,000,000 at the least, and that the tax levied thereon will yield the government, say, $500,000, so that the rate of the levy on the total product is about 2½ percent. It will be noticed that to prevent this tax from operating [Page 813] favorably upon the importation of foreign goods, the same rate of taxation is also levied upon all similar articles imported through the customhouses, so that the foreign goods, whose duties are above stated, are to be burdened in addition with the same tax as that levied on domestic fabrics. This measure has evoked the most strenuous opposition, not only of the manufacturers but also of the trade unions and the protectionists generally, and nothing but the most urgent necessities of a government with an exhausted treasury could have secured the passage of the law. Some of the factories threaten to stop when the law goes into effect on the 1st of July, and labor demonstrations unfriendly to the administration may be anticipated.

I also inclose a translation of the law making smuggling a penal offense punishable by imprisonment. The contraband trade has become so general, as I have heretofore had occasion to notice, as to very seriously affect the revenues of the government, and it has been thought necessary to resort to the present law in the hope that its vigorous provisions may materially restrain this illicit commerce.

I am, &c.,

[Inclosure 1 in No. 969.—Translation.]

Mexican law levying taxes upon domestic manufactures and similar foreign goods.


The Congress of the United Mexican States decrees:

Article 1. The revenues of the federal treasury for the fifty-fifth fiscal year, which commences the 1st of July, 1879, and terminates the 30 th of June, 1880, shall he composed of the following items:

* * * * * * *

14. Of the products of the new imposts which are hereby established and are the following, which shall commence to be collected from the 1st of July of the present year, and the articles manufactured in factories or shops whose capital does not exceed $500 are excepted.

Three cents for each gross kilogram of cotton woven goods, smooth and brown, manufactured in national territory under the denomination of domestics (mantas) or otherwise.
Four cents for each gross kilogram of smooth cotton goods, white or colored, manufactured in national territory.
Two cents for each gross kilogram of cotton thread of whatever class or factory manufactured in national territory.
One cent-for each gross kilogram of yarn of all classes and of cotton, manufactured in national territory.
Two cents for each square meter of carpet, rug, counterpane, and other analogous woven woolen goods, or wool and cotton or of other materials with a mixture of any other, manufactured in national territory.
One cent for each square meter of baize, nubias, and other analogous woolen goods, or wool and cotton, manufactured in national territory.
One cent for each gross kilogram of woolen thread, white or colored, manufactured in national territory.
Duties of importation on the foreign goods similar to the national goods taxed in the clauses A, B, C, D, E, F, G, adding to the duties which the former now have fixed by the existing tariff, a sum equivalent to that established by this law on each one of the latter.

Inclosure 2 in No. 969.—Translation.

Mexican law imposing penalties of imprisonment for smuggling.


The Congress of the United Mexican States decrees:

  • Article 1. Besides the penalties established in chapters 20 and 21 of the maritime and frontier custom-house tariff of the 1st of January, 1872, the authors of contraband [Page 814] or fraud against the rights of the treasury, their accomplices, the receivers of goods, and the employés who may he in collusion with any of the persons as before described, shall be punished with the penalties hereafter stated.
  • Art. 2. In the cases mentioned in the clauses I, II, and III of article 86 of the said tariff, if the owners, conductors, captains, or any other persons transporting the goods should be apprehended, they will undergo five years’ imprisonment and their names shall be published in the newspapers; if it be proven that any commercial house established in the republic has carried on or favored contraband after this law shall have gone into force, besides the foregoing penalties which shall be applied, according to the case, its name shall also be published in the newspapers, its name shall not be recognized in any transactions with the public treasury and will not be admitted in any official or commercial transaction by any government office.
  • Art. 3. In all the other cases stated in articles 86 and 87 of the tariff, a corporal punishment of from six months to five years imprisonment will be imposed, under the following conditions: If the total amount of the duties defrauded passes one hundred dollars without exceeding a thousand dollars, an imprisonment of from two to six months will be imposed; if it exceeds a thousand dollars without reaching two thousand, double the time; if it passes two thousand and does not reach three, triple the time; and thus successively, without exceeding the maximum of five years.
  • Art. 4. Corporal punishment shall not be inflicted in the cases comprehended in clauses IV, V, and VI of article 86, chapter XX of the said tariff, when the amount of the duties does not exceed $200.
  • Art. 5. When the manifestation of the goods in the consular documents is done in an ambiguous manner, without being subject to the nomenclature of the tariff, the penalty of double duties will be imposed on the goods which arrive ambiguously manifested; in this case every package of the cargo should be examined.
  • Art. 6. Accomplices in the offenses of contraband or fraud in which the penalty of imprisonment is imposed, half of the punishment shall be inflicted on the first named, and a fourth on the second, which should or may be imposed on the principal authors of the contraband or fraud.
  • Art. 7. The government employés who may be proven to be complicated in the aforesaid offenses shall suffer the penalties established in the present law, and those imposed by the tariff in force, and other laws on the subject; but in every case with the understanding that the imprisonment inflicted can never be less than double the time imposed upon the principal delinquent or delinquents of the contraband or fraud.