No. 853.
Mr. Romero to Mr. Bayard.

[Translation.]

Mr. Secretary: I have observed, both in the correspondence of the representatives of the United States in Mexico, which has been published by their Government, and in statements made by prominent persons in this country, expressions and opinions respecting the free zone which exists in the portion of Mexico bordering on the United States which I consider wholly unfounded; it has consequently seemed proper to me, from a due regard to the good understanding and harmony between our two countries, to offer some explanations, whereby I trust that the erroneous impressions that now prevail on this subject will be rectified.

I think I do not hazard much in saying that in both official circles in the United States and outside of those circles it is believed that the free zone was established in Mexico as an act of antagonism, if not of hostility, to the United States, and mainly, if not solely, for the purpose of encouraging smuggling, to the prejudice of the fiscal interest of this country. It will not be difficult to show how unfounded these opinions are.

When, in pursuance of the treaty of February 2, 1848, the Rio Grande from El Paso del Norte to the point where it flows into the sea was accepted as the boundary line between Mexico and the United States, and when American settlements began to be made on the left bank of that river, two peoples were brought into contact with each other whose economical and commercial conditions offered a striking contrast. In the United States no taxes were levied upon internal trade, and it was not otherwise restricted. The import duties on foreign goods were at that time relatively low, and the country was just entering upon an unexampled career of progress, while in Mexico, which had inherited the Spanish system of taxation, taxes were levied which largely increased the cost of domestic goods; the collection of these taxes rendered internal custom-houses necessary, and the restrictions placed upon trade were numberless; import duties on foreign goods were so high as to be prohibitory; in addition to this, the importation of various kinds of goods was prohibited, among them some of prime necessity, such as provisions.

The result of this state of things was that while in Brownsville, and other towns on the left bank of the Rio Grande, domestic articles of daily use, such as provisions, clothing, etc., were sold at a comparatively low price, in the Mexican towns on the right bank they cost twice and even four times as much, and that foreign goods also were much cheaper on the one than on the other side of the river.

[Page 1267]

This difference of circumstances necessarily brought about one of these two results: It either caused the inhabitants of the Mexican towns to emigrate to those of the United States in order to enjoy the advantages which were to be had in that country, or it induced them to purchase the goods which they needed in the United States and then to smuggle them over to the Mexican side.

In 1849, that is to say in the year following that in which the new boundary line was adopted, the situation on the Mexican frontier became so disquieting, that the Federal Congress was obliged to pass a law, on the 14th of April, which may be considered as the first step toward the establishment of the free zone. This law authorized, for a term of three years, the importation through the frontier custom-houses of the State of Tamaulipas of such provisions as were for the use of the people of the frontier, which goods, up to that time, had been prohibited by the existing tariff or had been subject to very heavy duties.

This law did not meet the exigencies of the situation; and in 1858 the free zone was established by the governor of Tamaulipas as an absolute necessity of the State.

On the 5th of February, 1857, the constitution was adopted which is now in force in Mexico, and which went into operation on the 16th of September following. On the 1st of September, Don Ignacio Comonfort, the constitutional President was inaugurated, and unfortunately a pronunciamiento was issued by him on the 17th of the same month against the constitution; he also dissolved the Federal Congress which was then in session. For this reason several Mexican States, especially such as were at a distance from the center, reassumed their sovereignty, and their legislatures granted extraordinary powers to the governors, in order to enable those officers to protect their institutions.

In virtue of these powers the governor of the State of Tamaulipas issued, on the 17th of March, 1858, a decree which was designed to afford a remedy for the hardships that were then suffered by the frontier population of that State. This decree established what has since that time been known as the free zone, in which foreign goods intended for the use of the frontier towns of the State and of the ranches in their jurisdiction, or for trade between those towns, were to be exempt from all Federal duties, but not from municipal or State taxes; an unlimited right of bonding being, moreover, granted to those towns. Thus it was that foreign goods imported there could remain stored indefinitely without paying any duties to the Federal treasury. The said goods paid no import duties except when they were removed from those towns to be shipped to the interior of Mexico.

Nothing could furnish a better explanation of the true object of the decree issued by the governor of Tamaulipas, if there were room for any well-founded doubt with regard to it, than the grounds on which he based his action, which were as follows:

Whereas the towns on our northern frontier are in a state of actual decadence owing to the want of laws to protect their trade; and whereas, being situated in close proximity to a commercial nation which enjoys free trade, they need similar advantage, in order to avoid losing their population, which is constantly emigrating to the neighboring country: Now, therefore, desiring to arrest this serious evil by means of franchises which have so long been demanded by the frontier trade __________.

* * * * * * *

The decree of the governor of Tamaulipas of March 17, 1858, was submitted to the legislature of the State and also to the Federal Congress for their approval, and it was approved by the latter body July 30, 1861.

This brief statement will, I think, be sufficient to show that the establishment of the free zone was a stop taken in fulfillment of the duty of [Page 1268] self-preservation, so to speak, and that it was by no means a measure adopted in a spirit of unfriendliness, much less of hostility, toward the United States, as has been believed in this country.

The second impression which prevails here with regard to the free zone is equally unfounded.

The events connected with the foreign intervention did not permit the effects of the free zone to be felt in Mexico until the Republic returned to its normal condition, as it did when peace was restored.

In the report made by the Secretary of the Treasury to the Congress of the United States September 16, 1869, that officer stated that one of the causes of the then depleted condition of the Mexican treasury was the large contraband trade that was carried on through the free zone enjoyed by the frontier towns of Tamaulipas. The Secretary remarked at the same time that the custom-houses of those towns were scarcely able to meet their expenses, which showed that that region had not prospered, notwithstanding the franchises granted to it by the free zone, and that the said zone was not the proper remedy for the evil which it was intended to cure.

It is true that the privilege granted by the free zone to the inhabitants of the northern portion of Tamaulipas to import foreign goods without paying import duties, to store them in their own houses, and to keep them in bond for an unlimited time was, and has been, a powerful incentive to smuggling, with a view to repressing which recourse has been had in Mexico to a costly and complicated system of inspection. Protection to smuggling was not, however, the object had in view by the creators of the free zone, nor has it been possible for smuggling to be carried on to the prejudice of the United States to the same extent to which this has been done to the prejudice of Mexico.

Inasmuch as the duties levied by the Mexican tariff are much higher than those of the United States, it is evident that the most lucrative contraband trade is that which is carried on to the detriment of the Mexican treasury. That trade is, at the same time, carried on with less difficulty, because the Mexican frontier is very sparsely populated, in consequence of which the difficulty of guarding it is greatly increased, while the frontier of the United States is more thickly settled and better defended against smuggling.

It does not seem to me conceivable that, in order to encourage smuggling, to the detriment of the United States Treasury, which might be counted as one, smuggling could be encouraged to the detriment of the Mexican treasury, which might be counted as ten (i. e., in order to injure the United States the Mexicans would not be willing to injure themselves ten times as much); and if the smuggling which is carried on through the free zone were a sufficient reason for the abolition of the latter, the interest of Mexico in this matter would long since have settled this question.

There is another consideration to which I think proper to call your attention before concluding this note, and which, in my judgment, may be regarded as an advantage to the United States accruing from the free zone. As I have already stated, the Mexican system of legislation concerning customs and excise duties has generally been restrictive and even prohibitory, both by reason of the high import duties established in my country and of the existence of interior custom-houses; also on account of State and municipal taxes, which necessitate vigilance and restrictions that can not do otherwise than hamper business transactions. I have frequently seen complaints on this account in official documents of this Government, and I confess that some of them have [Page 1269] appeared to me to be not without foundation, although we are the party that suffers most from those restrictions. If the free zone in Mexico has inconveniences for this country much less serious than those which it has for Mexico, it has, in my judgment, one advantage which has hitherto remained unnoticed. That advantage is that goods from the United States may be imported into Mexican territory duty free and be warehoused in the region of the zone for an unlimited time. No greater privileges to the commerce of a nation can be asked for. If these privileges, which are confined to a limited zone, were extended to the whole country, I do not think that the United States would consider the free admission of their productions into Mexico as being prejudicial to their interests.

As I have already remarked, the opinion of Mexican statesmen with regard to the free zone has been divided, some having thought that it should be abolished, because it grants to one section of the country privileges which are not authorized by the constitution, and others having maintained that, under the circumstances, it was an imperative necessity, and that its abolition would be equivalent to the destruction of the frontier. The latter opinion finally prevailed in the councils of the Mexican Government, and in accordance therewith the free zone was extended to the States of Coahuila, Chihuahua, Sonora, and the territory of Lower California, for a distance of 20 kilometers from the boundary line; and thus, so far from any encouragement being afforded to those who favored the abolition of the free zone, the opposite system triumphed completely.

The free zone was subjected to regulations, or rather it was confirmed and amplified, by another decree of the governor of Tamaulipas, bearing date of October 29, 1860, and the Federal Government did not subject it to regulations until June 17, 1878. Chapter XII of the tariff of January 24, 1885, subjected the free zone to regulations in a restrictive way. Such, however, was the pressure exerted by the frontier towns and by their representatives in the Congress of the Union that, by a decree dated June 19, 1885, the limitations established in that chapter were suspended and more liberal regulations were again adopted in the tariff of March 1, 1887, which is still in force.

I think it proper for me to state in this connection than when I was obliged to study this question thoroughly, owing to the fact of my filling the office of the secretary of the treasury of the United States of Mexico, I formed an opinion which was decidedly adverse to the free zone, which opinions I expressed in official documents, and recommended its abolition to Congress; so that, instead of having been an advocate of the zone, I have probably been its most earnest opponent. The reasons which led me to this conclusion were of a constitutional character, and although I was aware that the situation of the frontier towns of Mexico required the adoption of suitable remedies, I always exerted myself to have measures adopted of such a nature that they could be extended to the whole country, they thereby being divested of their odiousness as privileges.

There can be no doubt as to the right of the Government of Mexico to establish rules relative to domestic and foreign trade in the country, and the misunderstanding which has prevailed here with regard to the object and tendencies of the free zone, and the manner in which that misunderstanding has been expressed by certain Federal and State officers, has really served as an argument to the advocates of the free zone who attribute to their opponents a design in advocating its abolition [Page 1270] to sacrifice the interests of Mexico to satisfy the demands of the United States.

It may not be out of place for me to quote here certain views that were expressed by the secretary of the treasury of Mexico in the report Submitted by him to the Congress of the Union under date of September 16, 1870. They are as follows:

The friendly representations made by the United States Government to that of the Republic in relation to the injury accruing to the United States from the free zone are also worthy of being taken into consideration by the Congress, not that it may seek to please the neighboring nation in a spirit of servility at the expense of the rights and interests of the Republic, which it is under obligations to care for and uphold above everything else (which spirit would be unworthy of our national reprerentatives), but as a neighborly act, and in order to have a right to be heard and treated with consideration in case that in process of time some difficulty arise on our northern frontier of such a nature as to possess, as regards Mexico, the character which the free zone possesses as regards our neighboring nation; in order, moreover, that Mexico may acquire a new title to be heard and considered in a cordial and friendly as well as just and equitable manner when she may have occasion to offer remonstrances with a view to the protection of her interests.

A nation’s dignity is not so well upheld by refusing to consider the moderate and amicable remonstrances of a neighboring nation as it is by hearing and considering such remonstrances and then acting according to the requirements of justice.

As a supplement to this note I have the honor to inclose a pamphlet containing the following documents:

(1)
Text of the decree of the governor of Tamaulipas, dated March 17, 1858, establishing the free zone.
(2)
A law passed by the Federal Congress of Mexico, dated July 30, 1861, confirming the above decree.
(3)
Regulations concerning the free zone, promulgated by the governor of Tamaulipas, October 29, 1860.
(4)
The first regulations concerning the aforesaid zone, promulgated by the Federal Government June 17, 1878.

Fuller details on this subject will be found in the speeches delivered by the secretary of the treasury in the Mexican Congress on the 28th and 29th of October, and on the 4th and 5th of November, 1870, which are contained in the verbal reports of the secretary of the treasury to the Congress of the Union during the first period of the second year of its sessions,” printed in the City of Mexico in 1870, a copy of which I sent to you as an inclosure to my note of January 4, 1886.

Be pleased to accept, etc.,

M. Romero.
[Inclosure 1.—Translation.]

Decree establishing the Zona Libre.

government of the state of tamaulipas.

The citizen Ramon Guerra, governor ad interim of the State of Tamaulipas, considering that the towns on the northern frontier are really in a state of decay for the lack of laws to protect their commerce; that, situated in the immediate vicinity of a mercantile nation which enjoys free commerce, they need equal advantages, in order not to lose their population, which is constantly emigrating to the neighboring country; desiring to put an end to so serious an evil by means of privileges which have so long been demanded by the commerce of the frontier; favorably considering the petition of the inhabitants of Matamoros, and using the extraordinary faculties with which I am invested by the decree of December 28, the last of the honorable legislature of the State, with the advice and consent of the council, I have seen fit to decree as follows:

[Page 1271]

Article 1.

Foreign goods designed for the consumption of the city of Matamoras and of the other towns on the hank of the Rio Bravo—Reynosa, Camargo, Mier, Guerrero, Monterey, and Laredo—and for the trade which these towns carry on among themselves, shall be free from all duties, with the exception of municipal duties and such taxes as maybe imposed, to the end that the burdens of the State may be borne; in like manner, goods deposited in Government warehouses, or in warehouses belonging to private individuals in the said towns, shall be free of duties so long as they are not conveyed inland to other towns of the State or of the Republic. The terms on which this trade is to be conducted are laid down in the following articles:

Article 2.

Mexican or foreign merchants, settled on the left bank of the Bravo, who may desire to avail themselves of this privilege, may transport their goods and fix their trading establishments, without paying any duties, in any of the towns aforesaid, being subject in making such transportation to the provisions made in the laws of the maritime and frontier custom-houses for the importations of foreign goods into the Republic, with the object of avoiding the clandestine introduction of goods to the detriment of the national treasury.

Article 3.

Any load conveyed to the right side of the Bravo must be carried through the fords of the river designated in the regulations of the custom-houses of said towns, and goods about to be shipped, already shipped, or which have been discharged at other places than those designated shall be subject to confiscation, together with the vessel, boat, launch, carts, or wagons upon which such goods were conveyed, and the carriers shall be required to pay a fine of from twenty-five to one hundred dollars; and the owners of the load shall be obliged, besides forfeiting their goods, to close the trading establishments which they may have in the Republic, their names being published in the newspapers, together with a statement of the fact and an order directing the closure of their business.

Article 4.

Goods leaving the towns where the custom-houses are designed for free consumption must go with permits or passes, as is usual in the internal trade of the Republic; in these documents various stations shall not be indicated, but only one in which the goods are to be consumed, and a fictitious name of the carrier shall not be inserted, but his real Christian name and surname, as likewise the name of the sender and that of the consignee. Any failure in this respect will give rise to a grave responsibility on the part of the official issuing such documents. Acknowledgments of the receipt of the goods, and of the delivery of the same to the consignees, will in all cases be required with little delay, in order that goods consumed outside of the privileged towns, in violation of the permit, may pay the lawful duties. Goods for the use of ranchos in the jurisdiction shall be required to pay no duties when their value does not exceed thirty dollars, and when they have the proper permits, without which requisite they shall be confiscated.

Article 5.

The circulation of goods for free consumption, as well as for conveyance into the interior of the Republic, shall be subject to the examination of the custom-house officers at the place whence they are sent. The carriers of such goods must present themselves with the same, and with their documents, at the sentry-boxes situated on their route, to the official on duty, that they may receive his visa, without which requisite they shall be liable to confiscation, although the documents covering the load may have been issued in due form of law. It shall also be the duty of the carrier to present the load and documents at the custom-house of the place of destination, under the same penalty of confiscation.

Article 6.

The administrator (collector) of the custom-house issuing the permits or passes must give notice, by the next ordinary mail, to the administrator of the custom-house at the place of destination, that said documents have been issued, stating the date and the numbers thereof, the name of the carrier and of the consignees, and the time fixed for their presentation. The administrator of the custom-house at the place of destination shall compare the load with the documents covering it, examining it carefully in accordance with the custom-house regulations, and sending word as to the [Page 1272] result to the administrator of the custom-house at the point whence the goods were sent.

Article 7.

Foreign goods leaving the privileged towns to he conveyed into the interior of the Republic shall, at the time of so doing, become subject to the duties laid upon them by the tariff, and they shall never be conveyed into the interior without having paid, at the custom-house of their place of departure, all duties which are required to be paid in the port, and without the observance of all the requirements and provisions of the laws in force, in order not to be molested or detained on their way.

Article 8.

As the privilege granted by this decree ought not to cause any detriment to the national revenue, it is the duty of the inhabitants of the frontier to prevent, by all the means in their power, this privilege from being converted into a shameful smuggling traffic; it is, therefore, the duty of every inhabitant of the frontier voluntarily to become a sentinel, constantly on the watch to prevent smuggling; otherwise, the government will be under the painful necessity of withdrawing this privilege, by revoking the present decree.

Article 9.

This decree shall be subject to the revision and approval of the Congress of the State at its next meeting in ordinary session and to that of the general Congress when constitutional order shall be restored, although it shall go into force as soon as published in the privileged towns.

Therefore I order it to be printed, published, circulated, and duly enforced.


Ramon Guerra.

José Maria Olivera,
Chief Official.

[Inclosure 2.—Translation.]

Decree of the Federal Government approved the decree of the Government of Tamaulipas establishing the Zona Libre.

Benito Juarez, President of the United States of Mexico, to the inhabitants thereof:

Be it known that the sovereign Congress has deemed proper to decree the following:

Article 1. We do approve of the act passed by the State of Tamaulipas on the 17th day of March, 1858, by which the towns of Matamoros, Reynosa, Camargo, Mier, Guerrero, and Monterey-Laredo, situated on the right bank of the Rio Grande, were made free ports of entry for all foreign goods shipped to these towns and destined for the consumption of and traffic between said towns, under the rules and regulations laid down in said decree.

Given in the halls of the Congress of the Union of Mexico on this 30th day of July, 1861.

José Linares,
Deputy President

E. Robler,

Gil L. Ganoa,
Deputy Secretaries.

In witness whereof I have ordered the foregoing to be printed, published, and circulated for the proper compliance with the same.

Given at the National Palace of Mexico on the 30th day of July, 1861.

Benito Juarez.

Citizen Higenio Nuñez,
Secretary of State, Treasury, and Public Credit.

Take notice of the foregoing and enforce the compliance therewith.

Liberty and reform. Mexico, July 30, 1861.

Nuñez.

The Political Chief of the District of Northern Tamaulipas.

The above is a certified copy.


N. Cordova,
Secretary.
[Page 1273]
[Inclosure 3 —Translation.]

Decree of the Governor of Tamaulipas.

[Maritime and frontier custom-house of Matamoros, government of the State of Tamaulipas.]

The privilege granted to the frontier towns for the free introduction of goods was general as to all of them, and there is no necessity, therefore, for conveying from one point in the zone to another point therein any goods save those which can not be introduced, or are not customarily introduced, for the limited local consumption of such towns. But nevertheless, as you point out in your communication of the 19th instant, even this privilege may be abused in the way you suggest, and therefore the Government warns you not to issue transit permits or passes in such cases, except for such quantity or number of articles or merchandise as you may deem sufficient for the consumption of the town to which the same are bound, leaving this to the judgment of your administration, which is hereby competently authorized to make the qualification in question.

And to the end that this provisional regulation, whereof information has been communicated to the supreme Government, shall be carried out, I send like instruction, under even date, to the custom-houses along the border, in order that they may observe it until further orders may become proper for the protection alike of commercial liberty within the limits of the zone and avoiding the resultant abuses.

I say this to you for your information and the further ends, assuring yon of my especial esteem.


Juan J. de la Garza.

[Flourish.]

Dario Balandrano, Secretary,
To the administrator of the maritime and frontier custom-house of Matamoros.

[Inclosure 4.—Translation.]

Circular to custom-houses.

Answering the inquiry which the custom-house of Matamoros addressed to this Government on the 11th instant, I have thought proper to make the following explanation, for the better understanding and application of the decree dated August 17th last past and the 15th of the present month:

(1) The decrees cited ought to be applied as complements of each other, with the object of re-establishing the order and credit in the custom-houses of the frontier and equalizing the commerce of the latter with the other ports of the Republic.

(2) There may be imported and kept in the towns embraced within the Free Zone all goods and merchandise of whatever class and nature, without paying any other duties than municipal, which shall be collected in accordance with the present tariff up to the 31st of December next and from that day forward in accordance with the general ordinance of 1856. Of the goods introduced into the Free Zone there can only be interned up to the 31st of December next the goods permitted by the tariff which expires, and from that day forward those may be interned which the ordinance of 1856 permits, which then begins. The values in either case shall be those which the cited tariffs designate.

(3) The goods which are interned after the 31st of December and thereafter shall pay at the time and in cash the duties of interning which the ordinance of 1856 establishes, and at once there shall begin to run the times which it indicates for the others which are properly called duties of importation and public improvements, which shall be paid on the day they fall due, in cash and not in paper.

(4) The goods imported and which may not have been introduced before the 31st of December next ought not to be considered as excepted from the foregoing provision, but ought to be treated at the time of interning in entire conformity to the tariff to which they belong according to the date in which it is made.

For the better understanding of this explanation, it is to be borne in mind that the interning for the commerce of the Free Zone is that of the importation for the other ports of the Republic; and so that for these ports the goods which have not been imported [Page 1274] can not be considered as in existence; neither can those goods which have not been interned be so considered for the Free Zone.

The Government is right when it proposed to re-establish credit in the custom-houses of the frontier and to equalize the commerce of the latter with the other ports of the Republic. In changing the tariff it has fixed a sufficient time within which the commerce can arrange its transactions and provide for the day when the ordinance of 1856 shall have full force and effect. If it does not take advantage nor wish to take advantage of the time, the fault is not with the Government, which is protected from all claim for damages and injuries by virtue of this indicated time.

(5) The total product of the duties of importation properly so called and those of interning are destined, first, to the payment of the custom-house employés; second, to the garrison; third, to the illustrious city council of Matamoros for what it has advanced to the latter; fourth, to the fiscal agents of the Government of the State in the district of the North for what they have loaned to the same also; fifth, to the various orders in favor of individuals for credits against the General Government, according to the order of the date in which they have been issued, and without taking into account those which have not been presented at the custom-house for its examination before the publication of the cited decrees.

(6) The monthly product of the duties cited in the foregoing explanation for no reason are to be distributed pro rata among the various claimants mentioned, but only to the custom-house employés and the garrison, as each one of these credits will be recognized when that which precedes it is satisfied in each month.

(7) The orders of payment in favor of individuals shall be paid in the order and turn which has been stated in the fifth explanation, and in the terms which they express according to the existing tariff, up to the 31st of December next—that is to say, there will be applied to their redemption the product of all the duties which, according to them, are devoted to their payment. But from the 1st of January forward all the orders pending shall be considered as a consolidated debt, which shall continue to be redeemed with the excess of the products of importation properly so called, and those of interning, according to the general ordinance of 1856, in the order and turn which pertains to it by the decrees and foregoing explanation which are to be observed, even when the importer is at the same time the holder of the order.

The injuries which the holders of the orders may perhaps pretend to feel on account of these dispositions are not to be regarded, because if their credits are rigidly examined, the $600,000 to which they amount to-day would in the final examination be reduced to less than a hundred thousand, but putting this aside and giving attention only to the real value or estimate which the paper had before these dispositions, which was from 14 to 10 per cent., it results that the total amount of their credit would be scarcely $70,000. To-day, on the contrary, in virtue of the decrees issued and these explanations, the paper has acquired its real value with the passage of time, according to the order in which it reaches its turn, and therefore there ought to be reason to expect to be placed in equality of circumstances.

The Government, which in dictating these measures has sought to conciliate all interests, thinks that the public and the commerce, the garrison and the custom-house employés of the frontier, will comprehend all the justice and equity which they contain besides their convenience.

To the people in general it has preserved all the advantages which have been attained and which will increase from day to day with the establishment of the Free Zone.

The commerce, in virtue of the differential decree, will be able to compete with all markets or places of commerce, with that of the other ports of the Republic, and it would be unjust and immoral to claim greater advantages. Each State or locality can allege exceptional circumstances, and at present, when the frontier is at peace, contemplating from afar the war which consumed the towns of the interior of the Republic, the frontier ought not to complain of its lot. Every privilege is odious, and the frontier has already one of much importance, as that of the Free Zone and the differential duty, of which it is a rare example in the mercantile world.

The garrison of the regular army will have its pay met and will be capable of discharging worthily its mission.

The custom-house employés, being well attended to in their salaries, will find the accounts more simple and facilitated, and their functions more in harmony with the other employés in the Republic.

On the other hand, the holders of paper ought to consider themselves favored be cause the value of the paper is increased in proportion as their turn draws near, and they may at once be assured that the value will not decline.

The whole commerce of the nation receives a great impulse because it is equalized, established upon a basis of sure calculation, and from to-day it shall not be the sport of every mercantile operation, in spite of the eventualities which the present revolution may occasion [Page 1275] You will give due publicity to this note, accepting the consideration of my esteem. God and liberty.

Tampico, October 29, 1860.

Juan J. de la Garza.

Emilio Velasco,
Chief Clerk.

The Collector of the custom-house in Matamoros.

These are copies.


Jesus Fuentes y Muniz,
First Chief Clerk.
[Inclosure 4—Translation.]

Decree establishing the Zona Libre.

The Department of Finance and Public Credit, First Section.

Circular No. 93.

The towns of the State of Tamaulipas situate on the frontier with the United States enjoying the privilege of importing free of duty foreign goods destined to their consumption, according to the law of the 30th of July, 1861, by which the decree of the government of that State of March 17, 1858, was approved, which created the Free Zone in the said State; and it being tire duty of the executive whilst it legally exists to adopt regulations for it in compliance with the duty imposed upon him by paragraph 1 of article 85 of the Constitution, for the purpose of avoiding the abuses which maybe committed under cover of the concession and the injuries which in consequence of these abuses the other frontier towns, honest commerce, and the Federal Treasury are feeling, the President of the Republic has thought proper to approve the following regulation of the Free Zone:

Chapter I.—Importation in the Free Zone.

Article 1. Foreign importations through the port of Matamoros shall continue to be subject to the provisions of the tariff of the 1st of January, 1872, and the regulations of the custom-houses of the same date.

Art. 2. The first is, importations which are made in sail and steam vessels, through the other established custom-houses of the Free Zone, shall likewise be subject to the same provisions of the tariff and regulations.

Art. 3. In the importation of foreign goods through the frontier custom-houses of Matamoros, Camargo, Mier y Monterey Laredo, the following rules shall be observed:

I.
The shippers to the custom-houses of the Free Zone of foreign goods destined to them shall be under the obligation to present to the Mexican consul or consular agent resident in the foreign town whence the merchandise proceeds three copies of the permit of importation to which paragraph IV of this article refers, in order that they may be certified in the following terms: “The preceding permit presented in (so many) useful leaves contain (so many) packages.” The date, signature of consul or consular agent, and seal of the consulate. In the absence of consuls or consular agents this certification may be made by a consul of some friendly nation, or two established merchants.
II.
The interested parties shall leave the duplicate of the petition with the consul or consular agent, they shall retain the triplicate, and the principal shall serve to protect the goods in their passage across the Rio Bravo.
III.
For the purpose of avoiding for the shippers the obligation to present a manifest and consular invoice for each importation which is made, in compliance with articles 24 and 30 of the tariff of the 1st of January, 1872, they will be permitted at the end of each month to embrace their partial permits in a single manifest and consular invoice, preparing these documents in the terms provided in said articles 24 and 30 of the tariff, under the penalties which the same establish and according to the forms Nos. 1 and 2 of the tariff, stating the numbers of the partial permits.
IV.
The shippers or commission merchants shall present to the Mexican consuls or consular agents, and in the absence of these to the consul of a friendly nation, and in his absence, to two established merchants, the three copies of the manifest and invoice for their examination, compared with the partial permits and their certification in the terms provided by, article 38, of the tariff, collecting the respective receipts. This certification shall pay the consular duties fixed in said tariff. A copy of each [Page 1276] permit shall be sent to the department of finance, together with the third copy of the manifests and invoices in accordance with article 40 of the tariff.
V.
Before the goods are passed the merchants or commission merchants shall enjoy the right which is granted to captains and consignees by the laws of December 31, 1874, and May 24, 1878, to correct and add to the partial permits already required, and to which paragraph II of this article refers, provided that this is done within twenty-four hours after the permit has been issued, and subject to the penalties fixed by said laws.
VI.
For the importation of foreign goods, each one of the aforesaid custom-houses shall not permit more than one passage in any of the fords of the Rio Bravo existing in front of the respective custom-house gate.
VII.
The importation shall be applied for according to the provisions of paragraph I of this article, by means of partial petitions, which the importers shall present in triplicate to the collector, one only of them being stamped with revenue-stamps of the value of 25 cents on each leaf of paper of common size, and on which shall be stated the number and marks of the packages, their weight and contents, and the other conditions required by article 24 of the tariff.
VIII.
The collector shall place on the stamped petition the note of “Importation permitted, after comparison of the three copies by the auditing office, and the examination and dispatch of the inspector designated.” The auditing office shall affix its approval, if satisfied; and if not, it shall give notice to the collector, in order that he may revoke his permit of importation and order the interested parties to withdraw the petitions.
IX.
The auditing office shall keep a book, properly authorized, in which it shall register each one of the permits, numbering them consecutively and making a note of their date, name of the interested party, number of packages, general class of merchandise, and total weight.
X.
The load and the permit shall be presented at the proper custom-house gate, in order that the guard in charge of it may make the comparison of the mark, counter-marks, and number of the packages, noting the permit, after copying it and placing on it the following note: “Complied with and note taken on pages (so many) of the respective book.” Date, signature, and seal of the guard of the custom-house gate. The guard shall at once send the permit with the load to the storehouses of the custom-house for its dispatch and examinatien, notifying officially the collector of the discrepancies which may appear, and giving him the observations which seem proper. The load shall go in charge of another guard or assistant of the custom-house gate, who shall take the permit and the observations of the guard in charge of the gate.
XI.
The partial permits of which paragraph VII speaks shall expire within three days from their date in cases where the merchandise for which they were granted has not passed the Rio Bravo. The permit having expired without being complied with in whole or in part requires a new document with the same requisites as the first for the passage of the goods not imported in time.

Art. 4. The foreign goods having arrived whose, permit has been obtained in conformity with the preceding article at the custom-house where it is to be imported, its examination shall take place in entire conformity with the provision of the tariff of custom-houses and other existing provisions.

Chapter II.—Payment of duties on the importation of merchandise in the Free Zone.

Art. 5. The examination and dispatch of merchandise both for frontier and maritime importations having been concluded, the liquidation in full of the duties shall be made by the auditing office according to the existing tariff, and the importers shall be required to pay in cash the municipal and package duties, the first being 1.37 per cent, upon the value of the importation and the second one-half cent, per pound, which are found tabulated in the rates of said tariff.

Art. 6. The collectors of the frontier custom-houses of the zone may accept bonds of the importers in order to secure the payment of the duties which are due until the auditing office can make the proper liquidation, said importers being permitted in such case to receive the goods after their dispatch. Without the delivery of these bonds the deposit of the goods in the storehouses of the custom-house will be required, or such part of them as may be required by the collector under his responsibility for a sum sufficient to cover the amount due.

Chapter III.—Interning of merchandise proceeding from the Free Zone.

Art. 7. The interning of goods imported into the Free Zone through the customhouses established for foreign commerce by the existing laws shall be made in conformity with the following regulations:

I.
The shipper shall present to the proper custom-house five copies of the petition drafted according to form No. 5 of the tariff, using in one of them stamps of the value [Page 1277] of 25 cents on each sheet of paper of common size, if the value of the goods exceeds $100, and 5 cents in case they do not exceed $100.
II.
The presentation of the said documents shall be made to the collector, who shall number them consecutively and designate in them the inspector who is to make the examination and dispatch of the merchandise, taking account in a special book of the number which the document bears, name of the shipper, number of packages, amount of duties, point of destination, and the inspector designated for the dispatch.
III.
The revision of the numerical operation contained in the petition, to which fraction I of this article refers, having been concluded by the inspector, and the respective proceedings placed in the proper book, the dispatch of the goods shall be made, observing the same formalities as at their importation, it being the duty of the shippers to present said goods in the warehouses of the custom-house.
IV.
The dispatch being concluded, the liquidation of the duties, which shall be paid in cash by the importer, shall be revised by the auditing office, deducting the amount of the municipal and package duties, which were paid on importation according to article 5 of this regulation. The note being placed by the auditing office of “duties paid according to the existing tariff,” and the document numbered consecutively by the employé, who takes note of it, in the book destined for that purpose, authorized by the department of finance, and in which shall be placed the signature of the importer, the auditor, and treasurer, or the employé who acts for them, the said collector shall place the note of “The interning permitted,” and shall sign, attaching his rubric to the number of the document.
V.
The requirements of the foregoing paragraphs being complied with, the document shall be presented to the commandant of guard, who shall place upon it the note of “Passed to its destination,” sending it at once with the guard who is designated to accompany the load as far as the custom-house gate of departure, in which the guard in charge of it, after comparing the load with the document, shall take note in the proper book of the number of the document, name of the shipper, number of packages, their marks and countermarks, general class of the merchandise, value of the duties, name of the conductor and consignee, and point of destination, after which he shall place on said document “Complied with,” date, seal, and leaf of book, signing for attestation.
VI.
The packages which may be in excess or which may show some discrepancy, after the comparison has been concluded shall be officially sent by the guard to the custom-house for the proceedings which are respectively established by the tariff and the law of the zone of March 17, 1858, in cases of contraband and fraud.
VII.
If the examination made by the guard of the custom-house gate shall prove the agreement of the load with the document, he shall deliver to the conductor the document or documents which protect the load, which in no case shall leave without them, under the penalties of the law of March 17, 1858.
VIII.
If the load does not depart on the date of the document, the latter shall be returned to the custom-house by the guard which accompanied it, in order that the collector and auditor may place on it the following note, signed and sealed: Annulled because not used within its date.”
IX.
In order to issue a new document because the first was not used, five copies of the petition for interning will be required, which must pass all the proceedings, if they are found in perfect conformity with the one annulled, and shall be dispatched without issuing the new permit of entry which was required of the first; reference shall be made to the latter and the following notations shall be placed upon it, sealed and signed by the collector and auditor: “This second document issued because the first was not used within its date.” Both one of the copies of this second document as well as the one annulled shall be added to the vouchers of the respective permit of entry.
X.
Each custom-house shall keep a book authorized by the department of finance in order to take note of the second documents which are issued, stating in one leaf the number of the first document, its date, number of the item of entry stated in the daybook, value of the duties, names of the shipper, conductor, and consignee; number of packages, summary of the merchandise and points of destination; and in the other leaf the same facts concerning the second document. This book shall accompany the accounts, leaving in the archives of the custom-house a certified copy of it.

Art. 8. The custom-houses shall fix in the documents of interning a term within which the goods must reach their final destination, computing it according to the state of the roads, and having regard to the class of transportation which is employed, but which shall not be less than 5 leagues nor greater than 10 leagues per day.

Art. 9. When the point of destination is beyond the line of the counterguard, there shall be fixed in the document a point of transit where there is a section of said counter-guard, in order that the load may be examined, according to the provisions of articles 68 and 69 of the tariff and regulation of that corps.

Art. 10. Of the five copies of the document of interning which the shippers are to present, according to article 7, the one stamped, as already ordered, shall serve to protect the load which is interned; another shall serve as a voucher of entry of the [Page 1278] chief account; another shall verify the copy of the same which remains in the archives; another the custom-houses shall send to the chief of the respective section of the proper guard where the load is to pass, and the last to the department of finance for its revision in the department of liquidation; it being necessary to make this remission necessarily by the mail immediately after the date of the documents issued, respecting those corresponding to the counterguard, and every fifteen days those to the department of liquidation.

Art. 11. When any part of the goods protected by the custom-house document are consumed in any point of the transit, the due annotation of this shall be made by the corresponding section of the counterguard, and if there is none in the place, by the Federal office established in it, according to the provision of article 74 of the regulation of custom-houses.

Chapter IV.—Commerce in foreign goods between points situated in the zone.

Art. 12. The traffic in foreign goods and the circulation free of duties in the towns embraced in the Free Zone shall be subject to the following provisions:

I.
For the circulation of goods the shippers must present to the custom-houses five copies of the petition of circulation, in the same terms as prescribed for interning, in article 7 of this regulation, passing through the same proceedings except the payment of duties and modifying the notes by the collector and auditor, which shall be “free of duty according to the law of the 30th of July, 1861, for consumption in the zone,” signed by the auditor, and “permits circulation,” with the signature of the collector and seal of the custom-house, marking in the document the route which the load must follow without being permitted to leave the zone.
II.
The persons in whose favor the permits of circulation within the Free Zone are issued shall be obliged to present a document issued by the collector of the custom-house or the chief of the section of the point of consumption, which shall state that the goods have reached the place of their destination.
III.
The custom-houses mentioned shall require, in each case, a bond for the return document, within a brief term fixed to the satisfaction of the collector, in order that the goods which may pass beyond the bounds of the zone destined to the commerce of the same, and which may be consumed beyond them, in violation of the permit, shall pay the duties provided by the tariff.
IV.
The foregoing bond shall be made effective by the custom-house where it is given, if in the time fixed in the document the return document which is to be issued by the custom-house of consumption is not received, certifying that the goods for consumption there have all arrived at their destination.
V.
The documents of circulation shall in no case be given for more than one point and without stoppages, and in them their destination shall be stated.
VI.
The custom-houses which issue documents for circulation and free consumption shall send by the mail immediately after the departure of the goods the quadruplicate of the document to the commandant of the counter-guard, in order that the latter may give orders to watch the loads so that they may not depart from the route which is stated in the document, which shall always be within the limits of the zone. Another copy of the document shall be sent to the department of finance every fifteen days.
VII.
The custom-houses whence the goods depart for free circulation shall be careful, by the first mail, to give official notice to the custom-house of the point of consumption and to the section of the counter guard nearest to it, specifying in the notice the number of the document, the date, number of packages, estimated value of the duties, shippers, conductors, consignees, point of destination, and place fixed for their arrival, in order that they may exercise proper vigilance.
VIII.
The custom-houses and custom-house section of the point of consumption within the zone, after the examination and dispatch of the goods, observing the same requisites as at their importation, shall give notice of the result to the custom-house of origin, and the section of the counter-guard shall be careful to reply to said customhouse within the time fixed in the document in regard to the occurrences respecting the load and the result of their vigilance.
IX.
For the commerce of circulation between established custom-houses in the Free Zone which is carried on by the river, there shall be observed the requisites established in chapter 12 of the regulation of January 1, 1872, for the coast-wise trade.

Chapter V.—Consumption, in the places of the Free Zone where there are no customhouses nor custom-house sections.

Art. 13. The dispatch of documents for the consumption of foreign goods in the ranches situated in the Free Zone, shall be subject to the following provisions:

I.
In order that the inhabitants of the ranches may take from the towns of the Free Zone where there are custom-houses or custom-house sections the goods for their [Page 1279] consumption up to the value of $30, they shall present themselves in the proper custom-house or custom-house section, soliciting the respective permit.
II.
In each one of the custom-houses and custom-house sections embraced in the Free Zone, the collectors or chiefs of sections shall establish a desk in charge of an employé who shall prepare the petitions of consumption for the inhabitants who may have the right of free consumption and can not prepare them for themselves, making them in duplicate and without compensation, requiring a stamp of 5 cents, which shall be affixed to one of the copies.
III.
The collector or chief of the custom-house section shall designate an employé who shall make a note of the permits, in a book devoted to that purpose, authorized by the said collector, in which shall be stated the date, consecutive number which belongs to it, name of the interested party, value of the goods, and name of the ranch or destination. This employé shall cancel the stamps which are placed on said permit.

Art. 14. The custom-houses shall ask at once, and in the future every six months, of the Gity Council, a certified copy of the enrollment of the inhabitants of the ranches, in order that the employés who prepare the permits may be careful not to give them to other persons, nor to grant them successive times to the same person in a fixed period, in order to avoid the abuse which may be made of this privilege.

Art. 15. According to the provisions of the law, the goods shall incur the penalty of forfeiture, which, without the corresponding pass, are in default of the necessary requisites, may come to the custom-house gates or go beyond the towns of the Zone. Those goods will incur a similar penalty, which, although they have the respective pass, pass beyond the point of their destination.

Art. 16. The collectors and chiefs of custom-house sections shall grant to the owners of ranches situated in the Free Zone general permits for the free use of their carriages within the said zone, which permits shall be stamped with the revenue-stamp of the value of 25 cents, which the interested party must cancel in his respective petition, and which shall be delivered under a bond to the satisfaction of the collectors, on condition of paying the import duties in case the said carriages pass beyond the Zone.

Art. 17. Similar permissions shall be granted to the owners of cars and carriages who live in the towns of the Zone, in order to go to and return from the ranches, a bond being required for the payment of the proper import duties if the car or carriage shall pass beyond the Zone.

Chapter VI.—Exportation.

Art. 18. Frontier exportation of all products, goods, and national manufactures, excepting Mexican antiquities, gold and silver in bullion and coin, and precious woods for construction, are free of duty in conformity with the tariff and subsequent laws, and shall be made by means of special permits, the petitions for which shall be presented in triplicate by the interested parties, placing on one of them stamps of the value of 35 cents for each leaf of paper of common size. These permits shall be numbered in consecutive order, and a note of them shall be taken in a book authorized for the purpose, stating the date, name of shipper, that of the consignee, number of packages, kind of goods, their value, and point of destination.

Art. 19. The exportation of gold and silver in bullion and coins which circulate in the towns of the Free Zone and respecting which proof of the payment of duty has not been made in the points of extraction shall be permitted by paying the corresponding duties after the liquidation, which is made by the auditing office at the foot of the petition, with the “V. B.” of the collector and the note of “Paid” of the Treasury employé or cashier, citing the page and the item of the entry of the corresponding day-book.

Art. 20. When the exportation of gold and silver in bullion and coin is applied for whose duties have been paid in the point of extraction or in the custom-house, the proper liquidation shall be made on the petition, making the deduction which corresponds in the account of their origin, which the custom-houses shall keep in accordance with the provision of article 3 of the regulation of December 24, 1871. The auditing office shall fix the note of “duties paid on such a date and in such an office,” marking the number of the respective permit, and the collector shall find the note of “exportation permitted after examination of the inspector and commandant of the guard,” who, having found all correct, shall place, the first, the “Approved,” and the second, “Passed to its destination,” both signing for attestation. The official of the guard shall escort the treasures to the custom-house gate, where the official of that point shall take note in his book, placing “Approved,” and seal and signature.

Art. 21. For the exportation of precious woods for construction permits are granted with similar requisites, after the payment of the corresponding duties.

Art. 22. The exportation of foreign goods which have been imported through the [Page 1280] Zone will not be permitted according to article 95 of the regulation of custom-houses without the previous payment of the duties of exportation of the tariff and the observance of the provisions of this regulation referring to interning.

Art. 23. Maritime exportation abroad and coastwise, made through Matamoros, shall be subject to all the provisions of the tariff and the regulation of the customhouses and other relative provisions.

Art. 24. The passage by the American frontier of foreign or national goods whose value exceeds $10 shall take place with the formalities prescribed for exportation.

Chapter VII.—Travelers and their baggage.

Art. 25. The travelers who proceeding from abroad come into the towns of the Free Zone shall be permitted to import free of duties the goods and baggage mentioned in Chapter XVIII of the tariff of January 1, 1872, with the modification of the circulars of January 1, 1874, and December 18, 1876.

Art. 26. Travelers who may have arrived either by sea or by the fords of the Rio Bravo, in the towns of the Free Zone proceeding from abroad, when they go into the interior of the country, may intern free of duties their baggage and goods which they have brought with them in virtue of the privilege which the tariff and circulars cited grant them, obtaining from the custom-house or custom-house section the proper permit, which shall be granted to them in the term fixed in Chapter III of this regulation. On their petitions they shall place a stamp of 25 cents for each leaf of paper of common size.

Art. 27. The passage of baggage and persons which go from Mexican territory to the United States shall be free in accordance with Chapter XVII of the tariff.

Art. 28. Inhabitants or transient persons or the towns of the American frontier, who come only temporarily to the Mexican towns, shall not be permitted to bring with them goods which exceed the value of $10, without the formalities prescribed for importation.

Art. 29. The passage of a horse or carriage is permitted without any requisite or payment of duties, when the person who brings them only comes with the object of returning with the horse or the carriage on the same day or the following.

Art. 30. The inhabitants of the Free Zone who pass to the territory of the United States on a gelding or in a carriage, when they pass temporarily, shall not be required to comply with the requisites of exportation, nor shall any duties be collected from them for the said horses or carriages on their return to the Zone.

Art. 31. The collectors will permit, upon bond being given to their satisfaction, for the payment of duties of importation in petitions stamped to the value of 25 cents, that carriages and trains of cars may pass for a given time, in order to return to the left bank of the Bravo, or vice versa, making effective the bond from the expiration of the time, but without it being understood that they can be interned beyond the Zone. In case of abuse the bond shall be forfeited.

Chapter VIII.—Contraband and its penalties.

Art. 32. The cases of contraband in importation and exportation are as follows:

I.
When they pass or seek to pass the river by other fords than those which are designated by the custom-houses.
II.
When they pass or seek to pass the river by the designated fords without the proper permits, without the intervention of the employés of the custom-house gate and of the custom-house, or by night, or in unusual hours when the passage should be closed.

Art. 33. The contraband to which the preceding article refers shall be punished with the confiscation of the merchandise and of the vessels of all kinds, cars, carriages, and animals on which they are carried, provided they are found in the Mexican jurisdiction of the Rio Bravo, whether they be in the act of embarking, embarked, or disembarked.

Art. 34. Foreign goods destined for interning and free circulation shall incur the penalty of forfeiture, with the cars, carriages, and animals on which they are carried—

I.
If they reach the custom-house gate without the proper documents.
II.
If on departing from the town when the custom-house gates are outside of it, they change the route which directly corresponds to the departure according to the point to which the goods are destined.
III.
If they are iound beyond the custom-house gate without the required documents or seek to pass through it with documents of a date anterior to the date of departure.
IV.
If the said iocuments are wanting in all or any of the requisites prescribed in this regulation.
V.
If outside of the custom-house gates the conductors change the route pointed out in the document.
VI.
If the goods are not presented at the section of the countergaard designated in the documents.

Art. 35. If from comparison which is made of the documents of importation, interning, and circulation of goods, it appears that there are packages in excess, the goods in this condition shall incur the penalty of forfeiture. A similar penalty is incurred for goods which bear duties of exportation and which are found in the same circumstances.

Art. 36. The substitution in quality or quantity discovered in the examination and dispatch of foreign goods, whether in their importation, interning, circulation, or exportation, shall be punished with a fine of double the full duties according to the provision of paragraph II of article 87 of the tariff, and not simply the municipal and package duty.

Art. 37. According to article 2 of the decree of March 17, 1868, the goods which are in the act of being embarked, or which have already been disembarked for other points than those which are designated, shall incur the penalty of forfeiture, imposing upon the conductors fines of from twenty to one hundred dollars and compelling the owners of the cargo, besides the loss of their goods and publication of their names in the newspapers, with an account of the fact, to close the establishments of commerce which they may have in the Republic.

Art. 38. The cases of fraud which occur in the importation, circulation, and exportation of goods shall be punished by analogy with the penalties indicated in article 90 of the existing tariff.

Chapter IX.—General provisions.

Art. 39. The original permit of importation to which fraction III of article 3 of this regulation refers must be accompanied by the principal copies of the registry of frontier importation, which must be sent to the Treasury with the monthly account as proof of the items of entry of the package and municipal duties.

Art. 40. Of the two other copies of the registry, which should be made in conformity to articles 49 and 50 of the regulation of the custom houses of January 1, 1872, as also of the maritime importations, one shall be sent to the department of finance for its revision in the department of liquidation, and the other shall remain to prove the account in the archives of the custom-house.

Art. 41. Of the petitions for frontier exportation, three copies shall be made each month; one of which shall be sent as proof of the account to the Treasury, another to the department of finance for its revision, and a third copy shall remain to prove the account in the archives of the custom-house.

Art. 42. The collectors shall not make the distribution to the persons entitled to participate in the confiscated goods or the products of the fine without the approbation of the department of finance of the project of distribution which shall be sent to it in each case, bearing in mind that the duties which the goods seized within the zone have to pay are only the municipal and package dues, it being necessary to deduct from the amount of the fine the 25 per cent, of the Federal tax, and the 2 per cent, hospital tax. When the goods are seized beyond the zone they shall pay all the respective duties, except in the case where the persons who seize them are the custom-house guards, or of the section, and they return the goods to the towns of the zone without being interned; in that case only paying the municipal and package tax, the Federal tax, and the 2 per cent, hospital tax.

Art. 43. The traffic of goods shall be permitted by the designated fords of the Rio Bravo and the custom-house gates from sunrise till 6 o’clock in the evening.

Art. 44. The military chiefs shall be under the obligation to furnish daily the guards which the collectors may request for the service of the custom-house gates, and the escorts of cavalry for the rounds or expeditions of the guards.

Art. 45. The custom-houses of the Free Zone shall regulate their proceedings in all that is not expressly determined by this regulation to the tariff and regulations of the maritime and frontier custom-houses of January 1, 1872, and later existing provisions.

Romero.