Foster to Hamilton Fish, June 10, 1875

No. 441. Mr. Foster to Mr. Fish.

Sir: In my dispatch No. 226, of the 23d of December, 1874, I gave you information of the celebration of a contract between the executive of the republic of Mexico and Hon. E. L. Plumb, as the representative of the International Railroad Company of Texas, for the construction of a railroad from the city of Leon, in the State of Guanajuato, to Laredo or other point on the Rio Grande, to connect with the said International Railroad, and of the submission of said contract to the national Congress for its ratification.

I now have the honor to inform you that this contract was ratified by Congress, with unimportant modifications, by an almost unanimous vote on the 29th instant, and that it has been officially promulgated as a law. I inclose herewith a translation of the law, as also an editorial from the Two Republics, a newspaper published in this city, which editorial contains an abstract of the main features of the concession, and some well-considered remarks upon the enterprise and the effect which its realization is likely to have upon the interest of the two republics.

Communications between the two republics by an improved commercial land-route, which would afford free intercourse and trade, has always been a favorite measure with the Government of the United States. In the instructions which accompanied the appointment of our first minister to Mexico, Mr. Poinsett, which were written by the then Secretary of State, Henry Clay, our representative was particularly instructed to exert himself to secure the co-operation of the Mexican government in the construction of a projected road to connect the two nations, from Saint Louis through the Indian country, via Santa Fé and New Mexico, (see Mr. Clay to Mr. Poinsett, dispatch No. 1, March 25, 1825;) similar instructions were given by the succeeding Secretary of State, Martin Van Buren, (see Mr. Van Buren to Mr. Butler, dispatch No. 1, October 16, 1829.) The measure, in various forms, has been the subject, at different periods, both of diplomatic negotiation and of individual solicitation for concessions from the Mexican government, but the present contract is the first definitive and complete authority granted by this government for the construction of a railroad from the interior of the republic to connect with the railroad system of the United States.

The realization of the enterprise cannot fail to have a highly desirable influence upon both countries in their commercial, political, and social relations.

I am, &c.,

The international railroad.

After negotiations which have extended over a period of nearly four years, a final and satisfactory result has been reached in the important preliminary work of the necessary legislation in Mexico for the International Railroad.

The contract, which was concluded on the 12th of December last, between the minister of public works, in representation of the executive of the union, and Mr. Edward Lee Plumb, in representation of the International Railroad Company of Texas, was ratified by the Mexican Congress on the 29th ultimo, by an almost unanimous vote—116 to 13. The corresponding decree has since then been officially published, and the concession is now a law.

In an extra of our paper of this week we publish a translation in full of this important document, taken from the Diario Oficial of the 7th instant.

The ratification by the Mexican Congress of the concession authorizing the construction and granting government aid for the railroad which is to be the great international highway of communication between Mexico and the United States, is an event of no ordinary public interest.

The immediate and powerful influence which the realization of this work will have upon the industrial development of Mexico, and the building up of an enormous commerce between the two countries, is, in the very nature of the case, almost self-evident. Establishing, as it will, direct and speedy means of communication between the central regions of population and production of Mexico and the principal centers of population and consumption in the United States, it will afford to Mexico an immense market for the tropical and other products which her peculiar climate and favorable soil is capable of yielding to an almost unlimited extent.

And not alone will the realization of this enterprise tend to develop commerce between Mexico and the United States; but, powerfully stimulating production in Mexico as it will, by the cheap and ready access that will be afforded to the markets of the United States, it will also, in an almost similar degree, tend to increase commercial relations between Mexico and Europe. The importation into Mexico of foreign effects is as yet limited because the ability of the country to buy is restricted. As the financial capacity of Mexico is increased by a profitable commerce with the United States, in tropical and other products, so her ability to buy from Europe, and to meet her financial obligations there, will be correspondingly increased.

It would be a very narrow view, and one not justified by experience, to imagine that the opening of direct communication by railroad between Mexico and the United States will diminish the business transacted by steamship with the Gulf ports, or will unfavorably affect commerce between Mexico and Europe. On the contrary, just as the general development and prosperity of the country is promoted so will its commerce with all parts of the world be augmented, and will flow freely by all the different means of communication which modern commerce stimulates and demands.

The concession which has now become a law provides for the construction of a railroad of the standard gauge, (4 feet 8½ inches,) from the city of Leon, in the State of Guanajuato, to the Rio Bravo del Norte, there to connect with the International Railroad of Texas. The precise line to be followed, whether by San Luis Potosi, or by Aguascalientes, Zacatecas, and Durango, is left to be determined as shall be found to be most practicable and desirable by the surveys.

The distance to be constructed is between six and seven hundred miles.

The obligations of the company to be formed are to deposit a bond for two hundred thousand dollars within six months from the date of .the law; to complete the survey of 200 kilometers (124 miles) within eighteen months; to complete the survey of the entire line within two years and a half; to commence work at the terminus on the Rio Grande within three years from the date of the law; to complete 100 kilometers (62 miles) of the road within fifteen months from the time fixed for the commencement of the work, and 120 kilometers each year, or 240 every two years thereafter; and to finish the entire line within nine years from the date of the law.

If the road is completed in one year less than the stipulated term of nine years, the company is to receive a premium of one hundred thousand dollars; if in two years less, a premium of two hundred thousand dollars for each of the two years; if in three years less, a premium of three hundred thousand dollars for each of the three years; and if in four years less than the prescribed term, the premium is four hundred thousand dollars for each of the four years.

In aid of the construction of the road, the Mexican government gives to the company, in the character of donation, a subvention of $9,500 per kilometer, ($15,288 per mile,) payable with 25 per cent. of all the import duties caused in the frontier customhouses of the Rio Grande and that of Matamoras. For this purpose a special paper is to be issued to the company on the completion of the first 100 kilometers and each 20 kilometers thereafter, with which alone the said percentage can be paid.

The road and property of the company is also exempted from all taxation for the period of fifty years, and everything required for the construction and operation of the road is admitted free of duty during the term of fifteen years.

As is evident, the terms of this concession manifest great liberality and breadth of view on the part of the government of Mexico, and are such as will secure the prompt and unhesitating realization of the work.

At the previous session of the Mexican Congress a concession was ratified for the construction of a railroad of the same gauge, (4 feet 8½ inches, which is also that of the Vera Cruz road,) from the city of Mexico to Leon, 280 miles, passing by the important cities of Queretaro, Celaya, Salamanca, and Guanajuato. This central road, which will be finished by the time the International Road is completed from the frontier to Leon, will afford, in connection with the International, an unbroken line of communication from the United States to this capital, and the important, interesting, and populous surrounding region. From Leon and the Central road, branches will also penetrate into the rich and important States of Michoacan and Jalisco, to Morelia and to Guadalajara, the capital of the latter State, a city of 75,000 inhabitants.

Leon is a city of 100,000 inhabitants, situated in the State of Guanajuato, which has a population of 900,000 in an area of but 11,411 square miles, or an average of 78.87 to the square mile, which is greater than that of the State of Ohio (68.69) or Pennsylvania, (76.56,) in the United States.

Accompanying the translation of the concession, published in our extra, are some statistics of population and of the probable future commerce between Mexico and the United States, which will prove of general interest.

The distance yet to be completed in Texas to carry the international railroad of that State to the Rio Grande is but 235 miles from Rockdale, the present terminus, to Laredo.

Of this the distance between Rockdale and Austin, the capital of the State, 62 miles, will probably be completed by the end of the present year. From Austin to San Antonio, 78 miles, the road will probably be constructed during the year 1876. From San Antonio to the Rio Grande is about 150 miles, over a very easy line. The completion of this link within the next three years will enable the construction of the Mexican international road to be commenced.

But it is not necessary to wait for the completion of the portion of the Texas International between Austin and San Antonio, to obtain access to the frontier. The Galveston, Harrisburg and San Antonio Railroad is now completed from Galveston to Luling, 201 miles, leaving but 60 miles, which will be built this year, to be completed to reach San Antonio, and thus afford transportation as far as that point from Galveston for rails and other materials for the Mexican international road. There are also other lines, partially constructed and projected, leading from the Gulf toward San Antonio and the border, by which transportation can be furnished in due time.

From all the information which reaches us, it appears probable that there will be an immense mineral development in the Mexican border States of Coahuila and Nuevo Leon, so soon as means of communication shall be provided for the introduction of machinery and supplies and the transportation of ores, either to Galveston for their shipment to Europe for reduction, or to Saint Louis, Mo., for their reduction at the extensive smelting-works which have been established at that place.

In the trade in cattle and wool there will also be an immediate and profitable commerce.

Penetrating farther into the State of Coahuila, a region of wonderful fertility for the production of cotton will he reached. The trade in tropical fruits will require a special train every day; and there remain the great staples of sugar and coffee, the products of the maguey, and a thousand other articles which will enter into the valuable commerce which is to be created by means of the international railroad between Mexico and the United States.

The government of Mexico, through its executive and legislative branches, has now freely opened the door for this great work, and the immense and profitable commerce between the two countries that will follow. It is for the connecting roads in the United States, which are to receive the vast traffic that will flow out from Mexico, to do their part to aid toward the prompt realization of this grand enterprise—the most important, useful, and desirable that now remains to be undertaken upon this continent.