Mr. Whitehouse to Mr. Bayard.

Sir: President Diaz has recently caused to be published in the official journal of the Government a lengthy and detailed resume of the policy and acts of the Executive during the four years of his late term of office (December 1, 1884, to November 30, 1888).

The reasons which called such and such a measure into force are briefly touched upon by the writer, together with a general sketch of the policy, political, commercial, and progressive, which the President considered as best adapted to the peculiar needs of his countrymen, or for the advancement of national interests.

Much of the information contained therein will, I am confident, be of considerable interest, not only to those of our citizens whose commercial or financial affairs cause them to follow closely the practical advance of Mexico, but also to those who, although having no direct pecuniary ventures to watch over, can not, nevertheless, but be deeply concerned in the progress, intellectual and material, of so close a neighbor, and of a country with whose aims and interests our own are certain to become more and more closely allied.

General Diaz rightly considers the peace which the country has enjoyed for the last years as the principal cause from which springs the progress which Mexico is making.

To this peace must be attributed the extinction of political insurrections, the security which the citizen enjoys both as to his person and his property, the extension of business, the spread of education in all classes, and the awakening of the public spirit which is opening up the many channels of human activity.

Contrasting the improvements already existing with the lofty aspirations of the people, it will be said that hardly the first step has been taken towards social regeneration; but when it is remembered what long periods of armed struggles the Republic has been through, what immense obstacles it has been necessary to destroy in order to set up the principles of civilization, it will be granted there is reason to be proud of the political and social evolution of the country.

The feelings of national dignity as well as the healthy aims of justice are the levels on which the Government has constantly based its actions. Without taking into consideration the degree of strength or weakness of the nations with which it has been necessary to treat, merely the intrinsic value of each case has been relied on.

With such principles in mind (it is stated) the Government refused to alter certain conditions of the penal code, or to consent to consequent indemnities, as happened in the case of an American journalist at Paso del Norte, because it considered that it was not under obligations to yield to such petitions, the reasons for refusal being so justifiable that the Government at Washington did not insist, closing its ears to the exalted passions which endeavored to influence this affair.

The same reasons governed the conduct of the Executive in the proceedings against the authors of the offenses committed on the American side of Nogales and at Paso del Aguila (Eagle Pass).

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The United States Government, appreciating the motives of this conduct, withdrew their demand and when the penalty of death was pronounced against the criminals in accordance with our laws, the President of the United States exercised his good offices in behalf of those sentenced, and the Executive by right of its constitutional powers commuted the penalty.

Duly appreciating the importance of rapid and easy intercommunication for the purpose Of stimulating industrial and mercantile activity the Government has seized every opportunity to push forward these aims, recognizing railways as an indispensable necessity for the distribution of public wealth; hence the lines between Mexico and the United States.

Foreseeing, nevertheless, that this facility of communication between nations must of necessity carry with it an increase of diplomatic complaints on account of private interests which may be considered injured, it has been sought to find a remedy by framing conventions which have been dictated according to the principles of strict justice, and the lessons of experience.

Among such conventions those most worthy of mention are the treaty for the extradition of criminals with the United States, and the joint action for punishing hostile Indians who commit depredations on the frontier.

The respect of the sovereignty of nations has formed the basis of Mexico’s foreign policy.

This explains the conduct of the Government concerning the acts of General Barrios, President of Guatemala, when he attempted to unite by force the five Republics of Central America, declaring himself supreme chief; and also in the case of the coup d’état of General Barillas, President of the same nation, who last year suspended the constitution. The disapprobation of the Executive in the first case was frank and decisive, as it was not possible to lend countenance to so unjustifiable an attack against the rights of nations; in the second case, it was considered advisable to await the expression of opinion of the Guatemalan people, it not being incumbent to prejudge a question which affected solely the private interests of the neighboring country.

Several treaties of friendship, commerce, and navigation have been arranged, some of which have been duly ratified, namely, those with the United Kingdom of Norway and Sweden, with France, with Great Britain, with Ecuador, and with Japan. Postal conventions have been agreed to with the United States and with England. The invitation of the French Government to take part in the exposition about to be opened has been accepted, as well as that of Spain, to celebrate in 1892 the fourth centennial of the discovery of America.

The postal service is one of the institutions which has made most rapid strides among modern nations. The revolutionary movements which opposed the great reforms of 1856 to 1861, did not permit of the introduction of improvements in this branch, and, with the exception of prepayment, the old Spanish colonial system remained in force. In 1879, however, the Universal Postal Convention, signed the previous year in Paris, and of which Mexico was an adherent, modified considerably our system of exterior correspondence. In 1882 a commission for the study of the organization of the postal service was appointed, and made radical reforms. In 1883 these reforms became law. During 1885 considerable confusion existed in the postal service, and it was found necessary to re-arrange the department according to the model of more advanced nations. At present there are 356 offices and 719 agencies, as against 53 offices and 269 couriers in the old service.

The transport of mails, which formerly cost large sums, is effected now without a subvention in most cases, and with a considerable reduction in others, on account of treaties with steamship lines.

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In view of the importance of the capital a district service has become necessary. For this special service there are 5 suboffices in the city, 100 boxes in the streets, and 80 bureaus at which stamps can be bought. About 5,000 postal packages circulate daily, with the 5 collections and an equal number of deliveries. Great advantages have accrued, especially to commerce, from the postal convention with the United States, which allows of the interchange of correspondence, printed matter, samples, and parcels. At the same time, thanks to the exact directions contained in the rules of the departments of the interior and public works, the fiscal interests have suffered no evil consequences.

The results of the new system adopted can be appreciated when it is stated that in 1878 a postal circulation of 5,169,894 pieces was considered quite extraordinary, while last year the number exceeded 27,000,000.

After considerable difficulty, owing to the extreme conservatism of the lower classes and their ignorant opposition to any reform, a sanitary board has been established. Besides an inspection of drinks and food, and a general sanitary supervision, a special sanitary code has been prepared, which imposes certain obligations (in conformity with individual liberty) on each citizen.

A microbiological laboratory has been opened. Very shortly there will also be completed a laboratory for the inoculation of hydrophobia, together with an office for disinfection.

The drainage of the Valley of Mexico is closely allied to the sanitary question.

This gigantic work was undertaken during the Spanish reign in order to do away with the continual danger of inundation of the capital; but notwithstanding its immense importance the problem was never solved, and greater or less inundations (depending on the quantity of rain) constantly occur, rendering impossible a satisfactory sanitary condition.

General Diaz has taken a most lively interest in this most serious affair, and has done his best to have the problem solved by competent engineers. With this object Congress, on the 11th of December, 1885, issued a decree which raised to 40 per cent, the former 28, resulting from “octroi,” and by which, by the law of the 20th of June, 1885, the municipality was obliged to set aside annually $400,000 for the drainage of the valley.

Having adopted the plan for the work prepared by the department of Fomento, the work was started with the available means, and later on, in order to push forward the works, contracts were given for the completion of the most urgent parts, especially of the tunnel. Funds for the completion of this gigantic undertaking were, however, wanting. Fortunately, owing to the general state of the country, and the credit which it has been possible to establish abroad, the municipality was able to contract a loan with capitalists in London for £2,000,000 sterling, a sum sufficient in a few years to convert the ancient city of Montezuma into one of the most healthy places in the world.

The Mexican Government realizing the importance not only of punishing crime, but also of endeavoring to regenerate the criminal, and, if possible, to convert him into a useful member of society, has undertaken the construction of model penitentiaries.

Great and undoubted progress has been made in the organization of an efficient police, both metropolitan and rural; the latter being distributed not only in the federal district but throughout the various states of the Republic. This most efficient force has caused opinion abroad to undergo a change and has altered the prejudice against emigration, and bettered all relations abroad.

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Great attention has been given to the fostering and establishment of asylums, charitable schools, and various institutions of this class, Schools for the blind, the deaf and dumb have been created or provided for out of the public funds. The adoption of the most recent treatments in therapeutics has caused great benefit to the inmates of the various hospitals. The preparation and free distribution of medicines in the central stores have also given most excellent results. A notable advance has also become apparent, owing to the introduction of modern methods in the municipal schools as well as in those included in some asylums. The improvements most worthy of special mention are those of the Foundling Hospital, the Maternity Hospital, and the House of Correction.

The “Lottery for Public Benefit” is especially counted on by the administration for giving greater impulsion to this branch, and the drawings have been regulated with this object. Amongst other projects based thereon is the construction of a general hospital and of a lunatic asylum on the most approved scientific principles of hygiene.

The crisis through which the National Monte de Piedad (pawn shop) is passing is nearly over, as will be seen by the following: On suspending banking operations in April, 1884, the establishment reported obligations to the sum of $3,924,039.40, of which the emission of notes in circulation represented the Sum of $2,827,360. On the 30th November, 1884, the debt had been reduced to $974,815; on the 31st of August, 1886, to $337,806.20, and on the 31st of October, 1888, to $306,889.48; from which it results that during the administration of President Diaz an amortization of $667,925.52 has been accomplished. The amortization of notes during the same period was $480,000, the circulation being reduced to $12,500. The failure to cash these tickets (notes) makes it seem probable that by some accident or other they have been destroyed. In any case the loss is insignificant relative to the total emission of $4,327,360, as it is calculated as a general rule that the amortization of of notes not presented for redemption amounts to 5 per cent, of the emission.

Amongst active credits of the establishment which have gone on realizing, and which in many cases during the first months of the crisis were exchanged at par at the rates of the “Monte de Piedad,” has been the debt of the Federal Government. This debt which pays regularly, amounted on the 1st of December, 1884, to $554,847, and to-day is reduced to $177,375.25.

The establishment had, on account of necessary liquidation, considerably to curtail its operations. Nevertheless, during the last four years it has lent $4,470,779, or an average monthly loan of $93,141.

With the object of meeting the wants of the needy classes, a new rule has been put in force, which took effect on the 1st of January, 1887.

By virtue of this the national pawn shop is obliged to hand over to those interested any surplus which may remain after the sale of the objects belonging to them, which sums must be carried on special registers. Since the introduction of this rule up to October, 1888, surpluses have been collected in seventy eight offices, amounting to $5,110.67, of which $783.39 has been handed over to those interested. The remainder, not having been claimed after one year, has, according to the rule prescribed in such cases, been transferred to the fund for public charities.

Various reforms and preparatory studies for modifications, amplifications, or amendments in the several branches of jurisprudence, mercantile, criminal, and federal law, have been under consideration, the results of which appear at no distant date.

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Public instruction is recognized by President Diaz’s administration as the essentially civilizing element, on which firm base reposes the prosperity of nations. But it is also stated that the work of regeneration in Mexico will not be really cemented until what up to the present time has been done from noble sentiment is done from rational conviction. “The principle of democratic equality,” says the President, “which is at the heart of our society, is a positive truth, which only awaits, in order to spread itself fully, the vivifying breath of knowledge.”

The Government has fixed its attention on three heads, which it considers all important: To propagate without limit elementary instruction; to give wider scope to secondary and professional instruction, either by the endowment of new chairs or by the creation of new schools, and to improve the existing establishments by introducing into them the reforms made advisable by experience.

The law making primary instruction compulsory in the district and federal territories was an urgent necessity. The Executive has worked hard at the details of this law, believing that on the arrangement of it depended to a great extent the efficient working of so important a measure, and from time to time has dictated various improvements for primary instruction in the territories.

Important reforms have been realized on various points, among others the establishment of infant schools in which the Frœbel method has been introduced, giving the teaching an essentially educational character. The subjects of study have been increased in primary education, procuring easy and rapid acquirement of knowledge of useful matters with the greatest economy in time and labor. School furniture has been changed for the newest designs, and the school buildings, which are Government property, have been re-arranged, gardens and gymnasiums being added as beneficial to the health and physical training of the pupils.

A training-school for those gifted with the requirements for teaching became a necessity as soon as the Government had undertaken this important branch. In consequence the law of December 17, 1885, was passed by Congress providing for the establishment of a normal school of professors. On the 24th of February, 1887, this school was formally opened, the building being amply provided with the requisite furniture and a schedule of studies and regulations having been carefully prepared by competent authorities. The Government being desirous that the benefits of the new training-school should be spread throughout the country, invited the governors of all states to send pupils for this professional training. On the other hand, the education of women claiming no less attention than that of men, the Executive desired to complete the work by converting the secondary girls’ school into a normal college of female professors. Being duly authorized by Congress to make this change, the decree is now being carried out.

Due encouragement has been given to scientific and technical education. The conservatory of music, the academy of painting, and the schools of sculpture and architecture offer many examples of the very notable progress in the culture of the arts, for which the nation has special aptitudes, as has been satisfactorily proved.

Owing to the civil wars, which for so many years have placed the whole country in a state of almost incessant confusion, the study and the preservation of the ancient monuments and historical remains has been almost impossible. Of late years, however, the attention of the Government has been drawn in this direction, and much has been accomplished. An inspector has been appointed, the building of the [Page 556] national museum improved, its various collections added to both those of natural history and archaeology. An archæological map of the Republic has been made, and plans and photographs of the palaces of Mitla obtained. Explorations of the ruins of Xochicalco and the pyramids of Teotihuacan have been undertaken, many interesting discoveries rewarding the explorers of the latter. A wall 360 meters long, 3 meters high, and 1 meter broad has been constructed around the palaces of Mitla for the protection of these gigantic monuments.

To-day the Republic possesses a fine national library, where ancient documents and a large collection of scientific and historical works are at the disposal of the student.

Owing to the almost entire lack of navigable streams, the wretched condition or total absence of roads, and, in parts, the scant population of many districts of the country, railroads were of more than usual importance for the development of the immense natural riches of the Republic.

Unsatisfactory financial conditions, as well in the country as amongst foreign markets, caused a delay in the building of railways in 1885. Nevertheless the works went on, although, on account of the above-stated reasons, somewhat slowly, and in the first months of 1886 the lines, which one year before measured 5,915 kilometers, reached to 6,018 of road in running order.

In April, 1887, the Central and National Companies succeeded in raising the capital necessary for the fulfilment of the obligations of their concessions, and at present both companies have completed their trunk lines to the frontier of the United States.

The 1st of March, 1888, the Mexican International Railroad was opened, which unites the frontier town of Piedras Negras with the Central Railroad at Torréon, thus completing three roads to the north. On the 21st of May of the same year the Central opened to traffic the important branch from Trapuato to Guadalajara, pushing forward also that which from Tampico and Aguas Calientes goes to San Luis Potosi. Meanwhile the railways in the State of Hidalgo and those in Yucatan, as well as the Interoceanic, are rapidly progressing, especially the latter, owing to financial combinations in London.

The total extension of railways at present finished and in running order now reaches 7,940 kilometers.

The wild enthusiasm with which the inhabitants of Guadalajara and San Luis Potosi greeted the arrival of the first trains which placed them in communication with the capital and the outside world testifies to the keen appreciation of this inestimable benefit to commerce and civilization.

In March, 1886, there were more than 5,000 kilometers of telegraph lines completed, with a service of 93 offices. On the 5th of February, 1887, the systems of Mexico and Guatemala were united, and a telegraphic convention between the two Republics was entered into. The Government has reserved the right of using many telegraphic lines in its contracts with the railroads. Lines have been constructed between Ticalango and Ciudad del Carmen, between Puerto Real and Isla Aguada, as well as between the rivers Grijalva and Coatzacoalcos, by means of which instant communication is obtained with the States of Yucatan and Campeche, and the Gulf coast.

Taken altogether, the telegraphic system of the Republic now covers over 31,103 kilometers.

Fully appreciating the importance of colonizing the immense districts to-day almost uninhabited, the Government has entered into contracts [Page 557] with several companies for this purpose. At the end of 1885 20,000,000 acres had been disposed of, which total was increased in 1886 by 7,000,000 hectares in Chihuahua and Lower California, without counting the various amounts taken up by private individuals in accordance with the law of July, 1863. Commissions of engineers were appointed for the purpose of rectifying demarcations in the States of Chihuahua, Durango, Sonora, Sinaloa, and Puebla.

The following figures will give an idea of the result of these operations. The lands taken up by these companies cover some 33,811,524 hectares, of which 11,036,407 revert to them in compensation for expenses incurred. The ground sold or promised by the Government amounts to 12,642,446 hectares. To this must be added 3,635,388 hectares, representing 1,504 titles issued in accordance with the law of 1863.

Amongst the flourishing colonies thus formed may be noted the Ascension and Piedras Verdes, in Chihuahua, and Rio Colorado, in Sonora. Moreover, both in the above named States, as well as in Sinaloa and Lower California, private companies have organized colonies by means of contracts with the Government. Boleo and Todos Santos have advanced to the extent of opening the ports of that name and of Santa Rosalia. The old colony of Ticaltepec, in Vera Cruz, has also made great progress.

The Geographic Exploration Commission sent to Sonora to rectify and demarcate the districts of the Yaqui and Mayo Rivers concluded their labors and registered tracts of lands for the Indians, to whom titles legalizing their holdings will be issued.

In spite of the almost continual exportation during more than three centuries of precious metals, the mineral riches of the country can hardly be said to be adequately developed. In virtue of constitutional reforms it has been possible to apply efficient legislation to this important industry. A mining code has been carefully prepared, and owing to increasing confidence in the general situation of the Republic companies have been formed abroad and a large amount of capital devoted to this object.

Some idea can be formed of the extraordinary advance of mining interests when it is stated that in the seventeen months from April, 1887, to September, 1888, 2,077 new claims were taken up and 33 stamp mills. Furthermore, by virtue of the law of June 6, 1887, the Executive has entered into more than one hundred contracts for the exploration and development of the mineral zones in the States of Mexico, Puebla, Guerrero, Michoacan, Queretaro, San Luis Potosi, Jalisco, Durango, Coahuila, Sinaloa, Chihuahua, and Lower California. It is calculated that capital to the extent of over $30,000,000 is at present engaged in the development of mining interests. Vast quantities of ore are exported which the methods adopted in the country do not make it profitable to reduce.

The variety of climate, which allows of the growing of almost all crops, and the fertility of the soil are exceptional advantages which Mexico enjoys. Owing to this, and to the extension of the railways, which facilitate the export of agricultural produce, this branch of industry demands attention. A monthly journal, distributed gratis, is issued by the Government, which contains much useful information and data. Seeds and plants brought from abroad are liberally distributed, and Government agents supply information as to their proper culture. The silk industry has been started by the introduction of the silk worm, and promises to become of great importance. Efficient means for the propagation and preservation of fish have also been undertaken by this [Page 558] department. The cultivation of the vine has proved successful, and has spread rapidly, especially in the States of Aguas Calientes, Zacatecas, Durango, Chihuahua, and Coahuila. Wines of a sufficiently good quality are now made in these districts.

The construction and preservation of break-waters, docks, and lighthouses, as well as all improvements demanded in the ports, has been carefully considered.

Many reforms have been introduced into the mints; amongst others the unification of the type of national money. A central office of engraving, which began turning out notes in January, 1887, was established.

The engagements entered into on the part of the Government in favor of the national bank, the Bank of London, the Hypothecate, and the Monte de Piedad, on the 1st of December, 1884, reached $10,751,015.95. In order to amortize this sum, according to the respective contracts, as well as the obligations of subventions to railroad companies, and for $4,533,862.68, the amount clue private parties, it was found necessary to engage the customs receipts to such extent that only a 12/63 per cent, remained—a remainder insufficient to cover the salaries and the expenses of the custom-house. In consequence of these and other obligations the Government found itself almost in the impossibility to meet an estimate of nearly $26,000,000, without counting the authorizations contained in the same estimate and the expenses voted subsequently, which reached a total of many millions. Thus it was that on the 30th of November, 1884, a part of the civil list and several days’ salary to the army was unpaid. This exhausted condition drove the Government to issue paper in order to find the sums necessary to meet the most pressing expenses, sums which were only granted at short exchange and heavy obligations. This necessitated a slight reduction in the salaries of all official employés. In addition a decree was issued on June 22, 1885, to consolidate the floating debt, or that contracted since July 1, 1882, up to 30th June, 1886, and another to convert and consolidate the public debt contracted before that period.

After this period the financial situation began to be slightly alleviated. The decree relative to the liquidation and conversion of the public debt up to the 30th June, 1882, has given excellent results. The direction of said debt, appointed by the decree of January, 1886, has acknowledged up to the 12th of last September $17,101,837.37, of which sum the treasury has made the respective conversion, delivering to those interested corresponding bonds.

In June, 1886, the financial agency of Mexico in London came to an agreement with the president of the council of foreign bonds and with the president of the committee of Mexican bonds for fixing the mode of payment of the interest of the bonds issued in accordance with the law of 1851, and on other points relative to the conversion of the various credits considered as included in the London debt. This agreement was approved the 15th July, 1886.

In accordance with the policy proclaimed by Mexico twenty years ago, the Executive decided in the law framed for the arrangement of the public credit that titles proceeding from old diplomatic conventions should enter into the common fund of the Mexican debt with the same rate of interest as the bonds of other holders. In December, 1886, an agreement was signed with the representatives of the holders of bonds of extinct English convention, settling that these credits without any diplomatic character belonged to the common fund, realizing on 3 per [Page 559] cent, instead of the 5 or 6 per cent., which, according to the extinct international conventions, they were quoted at. In pursuance of these several conventions the financial agency up to the 31st May, 1888, acknowledged $73,507,090.68.

In 1887 certain important European bankers, notably Bleichroeder, of Berlin, proposed financial operations by means of which the redemption of the floating debt was deemed possible, and the proposals, having been duly examined by the council of ministers, were found acceptable. A contract for the issue of a loan of £10,500,000 was agreed upon, and signed by the Government and Bleichroeder on the 24th of last March.

The great opening of traffic in consequence of the various lines of railway now open to the United States has caused a very perceptible increase in the customs. During the last fiscal year the export of national products reached $49,000,000. The increase of business has also made necessary many modifications and improvements in the administration of customs, which are still being carried out.

The army at present consists of 16 generals of division, 84 brigadier-generals, 1,205 captains, 2,566 officers, and 29,367 privates; very nearly the same figures of December, 1884.

In 1885 the national artillery school and the arsenal were started. In the latter, armament after the latest designs and ammunition for the various arms are made. The military college is one of the most remarkable institutions of the Republic, comparing favorably with the best organizations of its kind. With a view to the formation of a navy, nautical instruction is also included at the military college. The nautical school of Mazatlan is established on board the Mexico; that of Campeché is on land. Eighty per cent, of the pupils here taught have entered the merchant service or gone out as pilots.

Surveys, maps, geographical, historical, and botanical explorations have been undertaken by special commissions appointed by and composed of military authorities, and to these, in great part, is due the formation of valuable and extensive collections pertaining to natural history and geology, astronomy and geography.

As stated in the beginning of this report, I have merely sought to glean subjects of general interest, passing over the mass of minute detail both in figures and explanation of certain purely local measures, which the President’s document contains.

Trusting the above may prove of some interest to the Department,

I am, etc.,

H. Remsen Whitehouse.