The Year in Mexico

THE annals of Mexico in this modern era of progressive and prudent administration resemble, more than anything else, the record of a great hacienda, or landed estate, under the management of an alert and achieving superintendent. A quarter of a century ago, Mexico was a congeries of jealous and isolated provinces, each clinging tenaciously to its traditions of home-rule. That was the era of the local leaders, the caudillos, men of power and leadership in their respective states; often men of primitive force, frequently of large wealth in lands or mines, always accustomed to command and to be obeyed, and hard to bring under any real control by the national government.

In some of the more distant states, the governors and their associates formed cliques who, on slight provocation, defied the central authority in the city of Mexico. The feudal lords of the soil in Mexico constituted a real power. Revolutions were easily fomented in provincial capitals, and successive federal executives had to placate, as far as they could, the great local chieftains.

To-day, under the rule of President Porfirio Diaz, all this is changed. Railways and telegraphs have penetrated every section of the republic, and what was, a quarter of a century ago, a looselylinked federation has become one of the strongest and most highly centralized governments in the world. Power has been placed in the hands of this remarkable ruler, and he has used it wisely, and in a paternal spirit, for the good of all classes of Mexican citizens. Rapid transit, popular education, and a strict vigilance exercised over the states, have transformed Mexico. One brain and one will have swayed the destinies of the country, and the effects of a well understood and steady purpose are manifest in the marvelous and substantial progress of the nation.

The elimination of the professional politician and the demagogue has been accomplished, and the services of every man of energy and intelligence have been enlisted for coöperation with the President in his work of modernizing Mexico. No man of genuine ability escapes being drafted into that great army of Mexicans who are guided by the modernizer of his country. Lawyers of eminence, bankers, educators, engineers, all men of creative or executive force, have been sought out and utilized. The work of Porfirio Diaz has been the creation of a strong, solvent, and efficient nation within the space of life remaining to a man who attained supreme power at the age of forty-seven years. He has had no time to waste in useless debate. This much should be known, if the record of even one year of Mexican accomplishment is to be understood .

The first event of interest during the year 1905 was the visit of President Diaz to the Isthmus of Tehuantepec, for the purpose of inspecting the railway which spans that region of southern Mexico from ocean to ocean, and which, in the expectation of Mexican statesmen, is destined, when the improvements at its terminal ports of Coatzacoalcos and Salina Cruz are completed, to be an important factor in facilitating the world’s carrying trade, even when the Panama canal shall have been dug. Already it is planned to utilize this Mexican railway for sending supplies to Panama from the United States.

The President made the trip to Tehuantepec at the invitation of Sir Weetman D. Pearson, head of the English contracting firm of S. Pearson and Son, Limited, which has reconstructed the railway, is executing the improvements at the terminal ports, and is the Mexican government’s partner for the operation of the road and the ports for a term of fiftyone years, counting from July, 1902.

The presidential party made stops at Rincon Antonio, the most salubrious and agreeable spot on the Isthmus, where the general offices and shops of the railway are situated; at Salina Cruz, the terminal on the Pacific, the scene of some of General Diaz’s earlier military exploits; at the city of Tehuantepec, where he was military commandant in 1858; and at Coatzacoalcos, the Gulf terminal. Incidentally, the President made a brief trip over a portion of the Pan-American railway, which, starting from San Gerónimo on the Tehuantepec railway, is to reach the frontier of Guatemala, and is to be the last link in Mexico’s contribution to the larger Pan-American or Intercontinental road; for, when it is completed, Mexico will have a continuous system of railways from its northern to its southern border.

At all points touched by the President he was received with enthusiasm, and he himself enjoyed the opportunity of revisiting, after the lapse of many years, a region where he won his first military laurels and became known as an uncompromising champion of liberal principles and republican institutions.

About two years will be needed for the completion of the works now under way at Salina Cruz and Coatzacoalcos, for the affording of ample accommodations for shipping. When the improvements in question are completed, the Tehuantepec Route is expected to compete, under advantageous conditions, for all traffic at present moving between the Orient and United States Atlantic ports, between the Orient and European ports, between San Francisco and New York, and so forth.

Aside from the traffic mentioned, which is largely competitive, and is subject always to competitive conditions, the opening of the Tehuantepec Route, with its ports in full operation, must bring about a large increase in the exchange of products between Mexican and Central American Pacific ports and all Atlantic ports. The cost of transportation will be greatly reduced via the Tehuantepec Route, as compared with the long hauls via railway lines at present. This great trans-isthmian railway is Mexico’s addition to inter-ocean routes.

Like all Latin countries, Mexico has a church question. The vast majority of Mexicans are Catholics, the Protestant missionary campaign having, in thirtyfour years, made but small impression on the masses, although undoubtedly doing not a little in the way of arousing the historic and dominant Church of the country to greater activity.¹ There is, at the present time, what may be fairly termed a Catholic revival going on in the country. Churches are undergoing restoration, missions are frequently held in remote regions, and the number of religious communities is increasing, although the existence of these communities, bound by vow and living under monastic rule, is illegal in the republic. The number of religious congregated together in one house is rarely very considerable. And such congregations are liable to domiciliary visits and dispersal by the authorities, in addition to fines and other penalties. The passage of time has softened the old antagonisms of Liberals and Conservatives; the Liberal group, which carries on the government, has no longer any dread of the clerical power, and it has come about that a modus vivendi has been reached whereby the Church, while pursuing spiritual ends, and not actively taking part in politics, is not subject to attack. Some of the female orders now in Mexico devote themselves to educating young girls and women; others nurse the sick, or care for the aged and helpless.

It is quite true that the Catholic Church is subject to a number of restrictions which are consequences of the laws of reform championed by President Juarez. That feature of the reform laws which most frequently leads to collisions between the adherents of the Church and the authorities is the prohibition of external or public acts of worship. Religious processions were so common in Mexico during the old days of the ascendency of the Church that the devout cannot easily reconcile themselves to their total prohibition.

Infractions of the law are most frequent in the small towns of the interior, where the people are particularly stanch in their devotion to the ancient faith and its practices. As a rule, these contraventions are not serious; but in the month of February last there occurred at Lagos, in the state of Jalisco, a case which attracted considerable attention, owing to the circumstances surrounding it.

Some of the humbler class of people marched through the streets in procession, holding aloft an image of the Virgin. The matter did not reach the ear of the authorities until the procession had entered the parish church. The parish priest, Rev. Gregorio Retolaza, was requested by the chief local authority, or Jefe Politico, as he is called, to call and explain the occurrence. The priest repaired to the office of this functionary and informed him that the procession had been held without his knowledge or consent.

In the meantime, a report spread abroad to the effect that the clergyman had been arrested, which caused a large crowd to assemble outside the office of the Jefe Politico, demanding the release of their pastor. The populace were ordered by the authorities to disperse, but instead of obeying, the peasants proceeded to stone the police and the office of the Jefe. To restore order, the police made use of their firearms, and a small riot ensued, in which sticks, stones, and pistols were used on both sides, with the result that one member of the mob was killed, and some, both of the rioters and the guards, were injured. The priest Retolaza was prosecuted and held for some months in prison at Guadalajara, the capital of the state of Jalisco.

In general, public opinion in Mexico sustains the authorities in the strict enforcement of the law prohibiting open-air worship. This law is interpreted with absolute impartiality. Protestants are not allowed, any more than Catholics, to organize or hold out-of-door religious demonstrations, and it is for this reason that Mexico is one of the few countries in the world which the Salvation Army has not entered.

It is very seldom that serious trouble attends the enforcement of the law in this respect, and that is the reason why the Lagos affair strongly arrested public attention, and was made the theme of many newspaper articles in which the firmness of the authorities in vindicating the law was commended.

Internally the Church in Mexico is not without its personal divisions and factions. Early in the year, Monsignor Domenico Serafini, the apostolic delegate in Mexico, departed for Rome to report to the Pope on the result of his ecclesiastical mission in this country. Hardly had he turned his back, when a bitter attack upon his predecessor, Monsignor Averardi, appeared in the columns of the Catholic daily, El Tiempo. The most remarkable feature of this article was that the severest strictures in it were quoted as having been already made in print by Monsignor Montes de Oca, Bishop of San Luis Potosi.

Bishop Montes de Oca was then absent from the country, leading a Mexican pilgrimage to Rome and the Holy Land, and it was reported that the publicity given to his attacks on a former representative of the Holy See in Mexico would lead to his being called to account by Pope Pius in person, and perhaps forced to resign his diocese, as, for different, but hardly less grave causes, the Bishops of Dijon and Laval in France had been compelled to do. Certain it is that Montes de Oca’s offense against discipline created considerable scandal in ecclesiastical circles in Mexico.

In the meantime, a new apostolical delegate, in the person of Monsignor Giuseppe Ridolfi, Bishop of Todi, has arrived in Mexico, and it is believed that Rome intends to have such an official permanently located in the country in order to exercise a direct and vigorous control over church affairs.

There have been rumors from time to time of the creation of a Mexican cardinal, but the improbability of these reports is evident. In distributing distinctions of this kind, the Vatican naturally gives the preference to those Catholic countries which maintain official relations with it, and Mexico not only declines to hold those relations, but also studiously abstains from according any diplomatic status to the representative of the Pope in Mexico, whose mission in consequence is purely ecclesiastical.

For many years past the relations between the United States and Mexico have been excellent, in contrast to the acrimonious disputes which strained international harmony some twenty years ago, during the first presidency of Mr. Cleveland.

During the period when Mr. Thomas F. Bayard was Secretary of State and General Henry R. Jackson was American Minister at the city of Mexico, — though it would not be fair to fasten the blame on them, — questions arose between the two neighboring nations which, as those know who were on the inside of the diplomatic exchanges of that day, might easily have become extremely serious, and even have resulted in war.

All this has been changed, and while the better state of international relations may in part be due to accident, it is unquestionably to be ascribed chiefly to the better spirit and temper in which such questions as arise from time to time are approached by the two governments.

Mexico was one of the countries with which the United States government negotiated an arbitration treaty early in the year, a treaty which was dropped, like its fellows, by the Washington administration, because of the Senate amendments. President Diaz, in his semi-annual message to Congress, delivered on the first of April, 1905, while not referring specifically to this tentative compact, remarked that the treaty of Guadalupe Hidalgo of 1848 contains provisions for the settlement of all future controversies, so far as possible and practicable, by arbitration. The President alluded in a gratified tone to “the remoteness of the fear of any possible difficulty with the neighboring republic on our north, with which, moreover, we cultivate, as is well known, relations which every day become closer and more friendly.”

Though the tentative arbitration treaty between the United States and Mexico, one of the bunch of treaties broached by the Washington administration at that time, fell through, another very practical and useful arbitration convention was concluded between the two nations during the year. This was the convention agreed to in principle during the Pan-American Conference in the city of Mexico in the winter of 1901—02, which provides for the settlement by arbitration of all international questions growing out of pecuniary claims. The representatives of several of the nations taking part in that conference affixed their signatures to this preliminary compact, and it has since become operative among a number of them. It was ratified by the Mexican Senate during its spring sessions.

As pecuniary claims have in point of fact been one of the most fruitful sources of difficulty between the United States and the other nations of the western hemisphere, the conclusion of an agreement, in a binding form, to dispose by arbitration of any such cases as may arise in the future, is a distinct gain for the cause of the rational adjustment of international controversies, and is a guarantee, not indeed absolute, but most substantial, of lasting peace among the nations of this continent.

Though this treaty was not operative according to international law at the time when Mexico and the United States submitted to the Hague Tribunal their controversy in regard to the Pious Fund Claim, nevertheless they no doubt considered themselves morally and constructively bound by its terms, seeing that they had subscribed to the project of a convention during the Pan-American Conference; and, anticipating ratification, they settled the difference in question in the manner provided by the project alluded to.

Then, of course, they could appeal to the treaty of Guadalupe Hidalgo, if further sanction were needed over and above the fact that two nations do not need to have any general prior arrangement in order to submit a specific question to arbitration.

The cordial character of the relations between the United States and Mexico was emphasized by the courtesies shown by the United States to Mexico on the occasion of the return to this country of the remains of the late Mexican ambassador at Washington, Señor Manuel de Azpiroz. who died at his post, at the American capital, on March 24.

It is well known that the position of Señor Azpiroz at Washington had not been a pleasant or easy one. Azpiroz had been the “fiscal,” or prosecuting attorney, of the court martial which sentenced Maximilian to death in 1867, and in this capacity he had pleaded for the application of the capital penalty to the unfortunate archduke and his two chief generals, Miramon and Mejia. This fact was remembered to his disadvantage at Washington by the European diplomats, and for a time they contrived to make things socially disagreeable for him. But in the end he to a large extent lived down this petty persecution, and from the first had enjoyed the respect and esteem of administration circles at Washington by reason of the rectitude and sincerity of his character.

Azpiroz caught cold at the inauguration of President Roosevelt on March 4, and the relapse occasioned by exposure on that day, aggravating previous maladies, proved fatal. About a month later, the United States sent the remains of Azpiroz home in the cruiser Columbia, which arrived at Veracruz on April 22, and was received with due honors. In the same vessel came the widow, the two daughters, and the son of the deceased ambassador.

Captain J. M. Miller, commander of the Columbia, with some of his officers, marines, and blue-jackets, accompanied the remains to the capital, at the invitation of the Mexican government, and were present on April 24 at the interment, which was attended by President Diaz, his cabinet, the foreign diplomatic corps, and many prominent citizens.

In the funeral procession the casket was carried by eight seamen of the Columbia under the command of the masterat-arms. The band of the Columbia played Chopin’s Funeral March. Next came the marines of the same vessel, and last of all the American blue-jackets with the stars and stripes unfurled.

The procession was watched by an immense throng. Under any circumstances a large concourse of spectators might have been expected, but the participation of the naval officers, marines, and seamen of the United States, in the last tribute to a lamented servant of the Mexican nation, gave a deep historical significance to the occasion, and, appealing to the best sentiments of the population, fully justified the manifestation of unusual interest in the ceremony on the part of the thousands of onlookers.

The oration at the grave-side was delivered by Ignacio Mariscal, Minister of Foreign Relations. He thus alluded to the crucial passage in the life of Mr. Azpiroz: —

“When that struggle [against the empire] ended, with the triumph of the national cause, it fell to his lot to take an important rôle in the great tragedy of Queretaro, and he then conducted himself, as he ever did, with absolute loyalty to his principles, heeding, not the promptings of anger or prejudice, but only the voice of duty and the dictates of conscience.”

After the obsequies, the officers and men of the Columbia remained in the city of Mexico for some days, and were handsomely entertained both by the Mexican government and by the American colony.

The incident served very materially to improve the state of feeling here toward the United States and the American people; and even the conservative organ, El Tiempo, usually so censorious when anything connected with Mexico’s northern neighbor is concerned, referred appreciatively to the courtesy of the Washington authorities.

The death of Señor Azpiroz necessitated the appointment of a new ambassador of Mexico to the United States. The choice of President Diaz for this important post fell on Lic. Joaquin D. Casasús, a successful corporation lawyer and economist, a classical scholar, a littérateur, a patron of art and science, and a gentleman of marked social accomplishments. The appointment was made public on June 3, and created a very favorable impression. Señor Casasús, accompanied by his wife and family, departed for his new post on November 3.

Through the resignation of General Powell Clayton, synchronizing with the beginning of President Roosevelt’s term, the post of American ambassador to Mexico became vacant almost simultaneously with that of Mexican ambassador to the United States. After an incumbency of eight years, first as minister and afterwards as ambassador, General Clayton left Mexico on May 26.

There were no striking developments in the political situation in Mexico.

On December 1 of the previous year (1904) President Diaz had entered on his sixth consecutive term and his seventh term in all.

By a constitutional amendment, a regular vice-president of the republic, for the first time since the early days of Mexico’s history, took the oath of office at the same time as the president, on December 1, 1904. The gentleman previously elected, and now occupying the position of vicepresident, is the Honorable Ramon Corral, formerly governor of the state of Sonora. By virtue of another constitutional amendment, the present and future presidential terms will be six years, instead of four as formerly.

General Diaz once defined the object of his domestic policy to be, “ Little politics and much administration.” His present term is being fully characterized by the application of that wholesome rule. It is a system which urgently needs to be reduced to practice in other SpanishAmerican countries, most of which are cursed with too much politics.

The Mexican President continues to enjoy excellent health, and at seventyfive is in the full possession of his mental and physical faculties. When one meets him, or he appears in public, he does not impress one as an old man. His compatriots may rationally hope that he will be spared to them for years to come.

On the other hand, the firmness yet conciliatoriness, the magnetic personality, the capacity to win both affection and respect, and the proven administrative aptitude, of Vice-President Corral, afford a guarantee of the continuance of orderly political conditions in Mexico, in the event of his being called on, in any contingency, to assume the direction of its affairs.

Much anxiety was occasioned late in November by the fact that Señor Corral was stricken with typhus. The public solicitude in his behalf was proof of his wide popularity. Fortunately, after a fortnight, it was announced that he had passed the crisis, and, a week later, that he had entered the period of convalescence.

Some changes occurred in the cabinet of President Diaz through the resignation of General Mena, Minister of War, which took place on March 10. General Manuel Gonzalez Cosio, who had been Minister of “Fomento,” succeeded Mena, and the portfolio of “Fomento” was given to Blas Escontria, former governor of the state of San Luis Potosi.

The official family of the President of Mexico had an addition as from July 1. The new cabinet office is the Ministry of Public Instruction and the Fine Arts. As a consequence of the creation of this office the Mexican Cabinet now contains eight members. The choice of President Diaz for the new portfolio was the Hon. Justo Sierra, one of the most enlightened citizens of Mexico, a distinguished littérateur and an enthusiast in the cause of popular education.

The new minister has not yet had time to develop all his plans, which aim not only at the extension and remodeling of educational facilities, but at the encouragement of all forms of art and literature.

Owing to the prolonged turbulence of Mexico subsequent to its emancipation from Spanish rule, its successive governments were able to give but scant attention to national culture in art and literature, and in this respect did not do so much as had been done under the colonial régime; and though it may be argued that the artist is born and not made, it is a simple fact that Mexico, since the era of independence, has produced no Cabrera and no Tresguerras. It is true that the latter survived the attainment of Mexican autonomy, dying in 1833, but both his genius and his work belong to the colonial epoch.

In a Latin country the direct intervention of the government in the artistic culture of its people is regarded as a perfectly proper and natural function, the more so in that the public’s patronage to the artist and author is not so liberal as in the wealthier Anglo-Saxon countries. The administration of General Diaz, which has done so much for the material advancement of the people, and which has made popular education one of its central features, has now, while the country is on the full tide of prosperity, undertaken to give a wider scope to plans of intellectual and æsthetic culture. In this spirit, and for this object, the new ministry was created.

Señor Sierra is very broad-minded, and, holding that art and science have no country, he some time ago, while still sub-Secretary of Instruction, appointed a foreign artist as Director of the Academy of Fine Arts, and has maintained him in that post in spite of the criticism of the chauvinistic press.

The new minister has signalized his intention of encouraging the drama by initiating competitions, with money prizes, among national authors in that form of literature.

Young Mexicans who show any capacity in art are pensioned by the government so as to enable them to continue their studies in Europe.

Since Señor Sierra took office there have been renewed rumors of the federalization of education and the unification of methods and courses all over the republic. At the present time, the Federal Government controls education only in the Federal District and territories, each state of the Mexican union having its own educational department.

A measure of vital importance to the economic well-being of the nation was promulgated on March 25, 1905. This was the decree for the reform of the currency, issued by the Executive under an enabling Act of Congress, approved on December 9, 1904.

The new monetary system, due to the initiative of the very able finance minister Señor José Yves Limantour, went into effect on the first of May, but the free coinage of silver ceased on April 16.

Broadly speaking, the new system gives Mexico a fifty-cent dollar. It declares that the theoretical unit of the monetary system of the United Mexican States is represented by seventy-five centigrams of pure gold, and is denominated a peso.

The silver peso, or dollar, which has hitherto been coined with the weight of 24.4388 grams of pure silver, will have a legal value equivalent to seventy-five centigrams of pure gold.

The coins to be struck are as follows : —

Gold: ten pesos, five pesos.

Silver: one peso, fifty cents, twenty cents, ten cents.

Nickel: five cents.

Bronze: two cents, one cent.

The design of the silver peso will not be substantially altered, at any rate for the present.

The basic feature of the measure is its affirmation that the power of coining money appertains exclusively to the executive, and that, in consequence, the right of private persons to introduce gold and silver bullion into the mints, for coinage, is abolished. This is the clause that does away with the free, or, to speak more accurately, the unrestricted coinage of silver.

Henceforth new silver coins will be struck and issued only in exchange for gold coin or bullion at the rate of seventyfive centigrams of pure gold per peso.

At the time when the enabling act was passed, the creation of a reserve or exchange fund was left to the discretion of the executive, and the opinion seemed to prevail that it would not be established at once. This view, however, proved erroneous, as the creation of the fund synchronized with the promulgation of the new currency measure. Ten million pesos from the treasury reserves constitute the foundation of the fund, which will gradually be increased from other sources, chiefly the seigniorage and other profits of coinage.

Bankers and financial authorities in general were glad that the exchange fund was made an initial feature of the plan of currency reform, for it gave it an immediate character of stability and permanence, and obviated the drawbacks incidental to the enhancement of the monetary circulation through the single influence of scarcity-value, — drawbacks that were for a time severely felt in India as the result of the currency measures of 1893.

The exchange fund is to be handled by a special commission, of which the exofficio head is the Minister of Finance, and which, in addition, has a membership of nine persons. Two of these nine are ex-officio members, namely, the Treasurer-General of the Nation and the Director of the Mints. Three members are appointed by the three chief banks of the capital, and the remaining four are appointed by the executive. It is an illustration of the broad spirit in which public affairs are now conducted in Mexico that five of the nine members, including two of the four appointed by the government, are foreigners. The commission performs the functions of a general board of currency control.

Such are the main features of Mexico’s currency reform. Simultaneously, however, with it, much cognate legislation was enacted. The chief of these allied enactments is the plan of relief afforded to the mining industry, which was also included within the scope of the enabling act of December 9, 1904.

The net result of currency reform is that it gives Mexico a money of stable value as measured by the world’s monetary standard. It makes Mexico’s currency independent of the fluctuations in the value of silver. Merchants and investors now have a fixed basis for all their undertakings and all their calculations; an aleatory factor, absolutely beyond control and baffling all human foresight, has been eliminated from financial and commercial transactions.

All these are obvious advantages; but it was apprehended that a somewhat heavy price, in the shape of the perturbation of some industrial and commercial conditions, would have to be paid. Even the most optimistic anticipated this. But in point of fact, the transition from a silver to a gold basis has been effected without jolt or jar. Even the silver mining industry, which, it was expected, would be most seriously affected by the change, continues to prosper and expand. Though this characteristic and historical industry of Mexico has no doubt been temporarily inconvenienced, it is evident, on the one hand, that the loss which it has suffered has not been sufficient to curtail its operations, and that the rebates in taxation and special franchises granted to it by the government have afforded a substantial compensation for those losses. Not only has no mining concern of importance shut down as a consequence of the suspension of the free coinage of silver, but new claims are constantly being located, and both native and foreign capital is being invested in ever-increasing quantities in the development of silver-mining properties.

In fact, in every way the success of the reform has exceeded expectations. The parity of exchange — two Mexican dollars equal to one American dollar, or ten Mexican dollars to one pound sterling — has been attained and has prevailed with substantial fixity for months past, in gratifying contrast to the former disturbing oscillations.

It was expected that some years would have to elapse before gold would actually circulate under the new system, whereas already the yellow metal has entered, of course on a small scale at present, into actual daily use, thus affixing the seal of absolute success, in the shape of the interchangeability and concurrent use of the two metals at the legal ratio, to this important measure.

On July 1 that time-honored institution known as the Free Zone ceased to exist.

The Free Zone has had different meanings, both territorially and fiscally, at different periods of Mexico’s history. For several years, however, prior to its suppression, it was a strip of territory, twenty kilometers wide, on the Mexican side of the northern border, and the duties payable on foreign goods imported for consumption in that strip were ten per cent of the regular tariff rates.

The object of the creation of the Free Zone was to afford to Mexican cities on the southern side of the border the stimulus and encouragement which it was felt they would need to enable them to exist and to prosper side by side with cities which, situated in the territory of the United States, would be characterized by the phenomenal activity, progressiveness, and growth manifested by the economic life of the northern republic.

It was believed that the franchise would attract population to the Mexican border cities by assuring low prices for the chief necessaries of life, and would lead to the building up of manufacturing industries in the zone by giving them cheap raw material.

Owing to a variety of circumstances, these expectations were not realized. For one thing, no important manufacturing interests became located in the Zone, despite the theoretical advantage of cheap raw material. And the reason is obvious. If such interests were to prosper, of course they would have to count not only on the markets of the Zone, but on those of the republic in general. They could do so, legally speaking, but in practice the matter worked out otherwise; for, inasmuch as extraordinary vigilance had to be exercised to prevent foreign goods, imported ostensibly for consumption in the Zone, from being fraudulently interned for interior markets, and as that vigilance had to embrace all goods moving inland from said Zone, including even the output of local factories, in order to guard against substitutions, it follows that these necessary restrictions were an obstacle to the marketing, in the interior, of articles manufactured in the privileged strip.

If to this fact be added the no less important one that the prices of imported goods were not in general lower in the cities of the Zone than in other cities of the republic, it will be seen that the main objects for which the Zone was created were not attained, and no solid argument could be adduced for maintaining a condition of fiscal inequality which had proved inefficacious to produce the advantages expected from it.

When the government had once made up its mind to do away with the abnormal fiscal conditions prevailing along the northern border, it acted with great decision and celerity.

For some years the executive has had delegated powers from Congress to modify tariff legislation, but it resolved to surrender those powers at the close of the last fiscal year, — that is, on June 30 last. It made use of the powers on the last day of their existence to abolish the Free Zone, and the decree of suppression took effect on the very next day. This quick action was necessary to prevent the heavy importations that would have been effected in the interval had a longer period been allowed before the going into effect of the new measure.

The suppression of the Free Zone has been welcomed on the American side of the frontier, as the United States customs authorities always maintained that the Mexican franchise was an incentive to the smuggling of European goods across the border.

Undoubtedly the enhancement of the currency, which is the chief feature of the plan of monetary reform, entailing as it does a lower exchange rate, and therefore facilitating the importation of products manufactured in gold standard countries, would have affected several local industries, had not a slightly additional margin of protection been afforded to them by virtue of a comprehensive revision of the tariff.

The new tariff came into operation on September 1.

It was to be expected that the currency reform would stimulate the investment of foreign capital in Mexico. A currency of fluctuating value was a great obstacle to foreign investments in this country, because the foreign investor could not calculate even with approximate accuracy the profits which he might expect from the venture. He could estimate them, of course, in silver, the currency of the country, but he could form no forecast as to what those profits would amount to when converted into gold. Furthermore, as gold capital once invested here was ipso facto converted into silver, the risk of its serious curtailment had to be faced in the event of the necessity, arising for any reason, of winding up the business and withdrawing from the Mexican field.

All these drawbacks are obviated by a stable currency. The foreign investor now knows within a very narrow margin what his profits in Mexico will net him in the currency of his own country. And for the same reason he knows that he can withdraw his capital at the same rate at which he invested it, at least so far as that operation depends on the existence in Mexico of a currency of stable value.

This fact will naturally encourage foreign capital to come to Mexico for investment.

During the few months that have elapsed since currency reform became operative, there has been a marked influx of foreign capital into Mexico. Two forms of investment seem at present to be specially favored, namely, Mexican banks, and plants for the conversion of water power into electrical energy for lighting and power purposes.

It is an interesting fact that most of the money recently invested in the increase of the capital of Mexican banks has come from France.

No event during the year in the business world of Mexico more strongly arrested public attention than the contest for control of the Bank of London and Mexico, between the French and British elements in that institution, ending with a complete victory for the former.

The Bank of London and Mexico, founded in 1864, was the first bank of issue, and is the oldest institution of credit, in the republic. It was regarded as a typically British institution, the last remnant of the former preponderance of British interests in the economic life of the republic. Some years ago, however, the first increase of its capital took place, and local French and Spanish merchants were allowed to subscribe for some of the shares, though the controlling interest was still held in the British metropolis. This intrusion of the Latin element was, however, the penetration of the thin end of the wedge. By degrees the new influences, particularly the French influence, expanded, and at the last increase of capital gained a complete mastery. The Bank of London and Mexico, in spite of its name, is now a French, and not a British, institution.

One of the great campaigns of peace carried on by the government has been that against the yellow fever, long the scourge of the Gulf ports, and occasionally raging with marked virulence on the Pacific coast. During the year, the Superior Board of Health, whose president is the noted physician and sanitarian, Dr. Eduardo Licéaga, has received most generous aid from the national treasury, enabling it to establish a system of rigorous sanitary inspection in the port cities, as well as to continue the work on the Isthmus of Tehuantepec, where, owing to the large number of white foreigners present as planters, railway officials, contractors, and the like, the dreaded fever has in past years found many victims. Much has been gained in that region by Mexico’s sanitarians, and the results in the port cities have been gratifying, for not at any time during the year was yellow fever present in an epidemic form in any one of them. Patients were isolated and screened so that the mosquito, known to carry the germ, could not reach them. Meantime the Superior Board of Health has initiated measures against malaria, and experiments have been made, with excellent results, at various points on the coast of Lower California and Sinaloa. The sanitary work of the government has been commendably efficient, and the labors of the official bacteriologists have aroused interest among farmers and hot country planters who have been benefited by their researches. Along the lines of applied science the Mexican government has done good work. The younger medical men of the country are often found to be most enthusiastic contributors to the researches officially conducted.

In the line of military preparation the government has been, as always, efficiently active. Though the policy of President Diaz is eminently peaceful, he has recognized that the national honor demands that due attention be given the army. Foreign military experts, who have visited Mexico of late, have cordially praised the efficiency of the artillery, the excellence of the cavalry, and the endurance and hardiness of the infantry. Taking the army as a basis, Mexico could place in the field against invading forces a great body of regulars, state troops, and volunteers. The younger men of the country have shown a decided bent toward military life, and thousands of them have voluntarily subjected themselves to drill and discipline. Steadily, and without making any parade of its purpose, the government has devoted much attention and money to the perfecting of its army. Military men have been stationed in Europe to watch the evolution of their art among Continental armies and to gather technical information as to new weapons. To-day, the Mexican army is largely officered by young and devoted men who have received a scientific training, and the military strength of the nation has increased appreciably. Mexico has learned much from the Boer war and from the RussoJapanese conflict. She desires, above all things, peace and progress, but she is armed and prepared for any warlike contingency. This is simply a policy dictated by self-respect.

It may be noted here that during the Russo-Japanese war the sympathies of those young men of the middle class who have Indian blood in their veins were strongly with the brown warriors of Nippon. Mexican Indians of cultivation, of whom there are thousands, regard themselves as descendants of the men of the Orient; their race-memory preserves, unobliterated, the record of the wrongs done them by the white conquerors from Spain. Even men with but a slight admixture of Indian blood speak with bitterness of the deeds of Hernan Cortés and his fellow conquistadores. The rise of Japan is far from displeasing to the thoughtful and reading Indians of Mexico. There exists a race patriotism which will make itself felt in the national policies of the near future.

The mining city of Guanajuato was on July 1 visited by a disastrous flood. This city, one of the earliest mining camps opened up by the Spaniards, is situated in a deep and narrow ravine, of which the further extremity, ending against the mountain side, has no outlet, so that when a heavy rain occurs all the water that gathers in the hollows of the hills at the upper end of the pass necessarily sweeps down in an impetuous torrent through the town. Thus Guanajuato has always been subject to heavy floods, of which the most disastrous, prior to the recent one, were those of 1760 and 1885.

At first, exaggerated reports were current of the loss of life and damage to property through the visitation of July 1. Later, it turned out that the dead numbered less than two hundred, and that the property losses amounted to not much more than half a million pesos.

A national subscription was raised for the relief of the needy sufferers.

An interesting figure passed away on February 14, in the person of Mrs. Francisca Guadalupe Vallejo de Frisbie. She was of the good old California family of the Vallejos, her father having been General Mariano Guadalupe Vallejo, who was head of the Mexican Military Department of California, with headquarters at Sonoma, at the time of Frémont’s invasion. General, then Captain, Frisbie, had sailed to California as member of a New York regiment enlisted to do service in the war between Mexico and the United States. He was commissioned as a captain, and as such landed with his regiment at San Francisco in March, 1847, six months after they had sailed from New York. When peace was reestablished, young Frisbie was admitted into the home of the Vallejos, and was married to one of the Mexican general’s daughters.

General Frisbie, who still lives, and is an active octogenarian, is one of the wealthiest members of the American colony in Mexico, where he has resided since 1878.

The American community in Mexico suffered a severe loss in the tragic death of its efficient consul-general, Mr. James Russell Parsons, Jr., of New York, who, on the evening of December 5, while driving in a carriage with his wife and young son, was killed by the collision of that vehicle with an electric street car. Mrs. Parsons suffered slight injuries and the boy escaped unhurt.