No. 464.
Mr. Morgan to Mr. Blaine.

No. 242.]

Sir: Before adjourning, Congress passed an act authorizing the President, during its recess, to grant such concessions for the construction of railroads and other works of public improvement as he might deem proper with or without subventions.

Exercising the authority thus conferred upon him, the President, on the 7th June last, granted a concession to Mr. John B. Frisbie, authorizing him to construct and operate a railroad and telegraph line from the city of Mexico to the Rio Grande at some point 25 leagues distant from and between Piedras Negras and New Laredo, or the same distance from and between Piedras Negras and El Paso del Norte, with permission to build branch lines to some point on the Gulf of Mexico, between Matamoras and Tampico, as well as to some point on the Pacific coast between Mazatlan and Zahuatanejo.

In all of its features this concession is identical with the concession made to the Mexican Meridian Railroad Company.

On the same day (7th June) he granted a concession to Mr. Francis De Gress, representing the International Railway Company, to construct and operate, for the term of ninety-nine years, a railroad and telegraph line, from a point on the Rio Grande between Laredo and Reynosa, running south, passing by San Fernando and Santanda Jeminez, by Tula to San Luis Potosi, with the additional obligation of constructing branch lines to Matamoras and to Barra de Jesus Maria, should that port be opened to commerce. The company is authorized to change the direction of the main line before reaching “Mesa Central,” to Papantla y Mezantla, terminating at Vera Cruz, with branches to Soto la Marina, Tampico, Tuxpam, and Tecolutla or Nautla.

On the 13th June he signed a contract with Mr. de Prida and Ignacio Pambo, as the representatives of the Texas, Topolovampo and Pacific Railroad and Telegraph Company, authorizing them to construct a railroad from Topolovampo, in the State of Sinaloa, to Piedras Negras in the State of Coahuila; from a convenient point on the Topolovampo road, on the Cordilleras, to Alamos in the State of Sonora; from a convenient point on the Topolovampo and Cordilleras road to Mazatlan in the State of Sinaloa; from a convenient point on the Cordilleras and Piedras Negras road to Presidio del Norte in the State of Chihuahua.

To this company a subvention of $5,000 per kilometer of constructed road, after the same shall have been accepted by the Secretary of Fomento, is to be paid except as regards the branch line to Presidio del Norte, for which no subvention is to be given.

He has also granted a concession to General Grant (May 4) representing the Oceania Telegraphic communication between the United States, Mexico, Central and South America; the line to run from the United States to Cuba, from Cuba to Yucatan, or to any other point on the Mexican coast, Tampico, Vera Cruz, or Coatzacoalcos excepted, and from Yucatan, across Mexican territory, to Guatemala, and to the Pacific coast as well as to the city of Mexico. To this company no subvention is given.

On the 12th July he granted a concession to Manual Payno, representing the “Compania del Ferrocarril Interoceanio de la Sierra Madre [Page 781]y Tierra Caliente,” to construct a railroad starting at some convenient point between Nautla and Tampico on the Gulf of Mexico to the capital, with a branch to Cuernavaca, terminating on the Pacific coast between Chacahua and Marnata. The work is to be commenced within one year and finished within ten years from the promulgation of the contract. To this concession no subsidy is attached.

To the Frisbie, the cable and the Payno companies no subventions have been granted.

To the Topolovampo Company a subvention of $5,000 per kilometer has been granted.

To the De Gress concession $8,000 per kilometer has been granted.

All the companies are Mexican companies, and are to submit whatever differences which may arise in regard to every question to Mexican tribunals, without appeal, even in case of denial of justice.

I have not sent you a copy and translation of these concessions because in all of their essential features they are identical with those of other concessions, copies of which you have. Besides, they have not received the sanction of Congress.

In my dispatches Nos. 26, of June 7, 1880, and 106, September 21, I had occasion to express an opinion with regard to the necessity of congressional sanction to the validity of contracts made by the President even with authority conferred upon him to that end. My mind remains unchanged. I know that the opinion therein expressed by me was not received with favor by those who were energetic in obtaining subscriptions to build the roads to which I referred; but I have observed that as soon as Congress assembled, a ratification of the concessions was immediately asked for.

I make the same remarks in reference to the concessions now under consideration; Congress will ratify them, provided the President does not change his mind between now and the time when their ratification will be asked for; but until they are ratified, they are not, in my opinion, worth spending any money upon.

There is an advantage in the Frisbie, Topolovampo, Payno, and DeGress concessions over the Central and Palmer concessions, which I deem it proper to call your attention to. It is, that while the two latter companies were forced to commence laying their tracks at Mexico, the others may commence work where they like. The advantage consists in this: steel rails delivered at Vera Cruz cost about $40 per ton. The transportation from Vera Cruz to Mexico costs $30 per ton. Landed in Mexico the rails cost, therefore, $70 per ton. Other material is about in the same proportion. It follows that the company which has the privilege of commencing work at any seaport, has an advantage in the cost of material of about 75 per cent.

I am, &c.,

P. H. MORGAN.