# Mexico under Carranza/Appendix 1

Contents
APPENDIX I
* THE GENERAL LAW FOR THE CONSTRUCTION OF INTERNATIONAL AND INTEROCEANIC RAILWAYS
Ministry of Public Works, Colonization, Industry, and Commerce of the Mexican Republic.
Section III
The President of the Republic has directed to me the following Decree: —
Porfirio Diaz, Constitutional President of the United States of Mexico, to the inhabitants thereof: Know ye —
That the Congress of the Union has enacted the following: —
The Congress of the United States of Mexico enacts: Only Article. The Executive is authorized to reform the contracts which he has celebrated for the construction of international and interoceanic railways, and to celebrate new ones with another or other companies, which may present themselves, granting in each case a concession, without comprehending the arrangement of the English debt, upon the following bases:—
1st. The concession or concessions shall be in force not more than ninety-nine years, and shall contain clauses relative to the reversion of the road to the nation free of all incumbrance, at the end of the term stipulated. ​2d. The contracts shall be subject to the conditions already agreed, and the reforms already accepted by the soliciting companies, without modification, except to the advantage of the nation.
3d. In order to treat with the companies, the Executive shall require previously guarantees and securities suitable to compel the execution of the enterprise. The greatest advantages which relatively any company offers in favour of the country shall bind the others. Upon those points, the Executive shall hear the opinion of the Attorney-General, which functionary shall give it in writing, within ten days, which having passed the Executive shall decide upon what is proper.
4th. The international and interoceanic networks shall be divided into sections for the purpose of contracting for one or more (sections) with each company which has complied with the preceding requisites.
5th. The maximum of the tariffs shall not exceed in any case the following figures: —
For each ton of freight of 1,000 kilograms of merchandise, and for each kilometre of distance: —
| First Class | $0.06 |
| Second Class | 0.04 |
| Third Class | 0.021/2 |
| Passengers per kilometre: — ||
| First Class | $0.03 |
| Second Class | 0.02 |
| Third Class | 0.011/2 |
Warehouseage
For each 100 kilos or for each fraction of the same per day $0.001/2 ​The tariffs shall be revised every five years, the Minister of Public Works having power to reduce them in accord with the company; but in no case shall there be any right to advance the same beyond the maximum prefixed.
The application of the tariffs shall always be made on the basis of the most perfect equality, the company not being able to concede to any one any advantage which it does not give to all who are in the same circumstances. 6th. The mails shall be carried free, during the life of the concession.
7th. The companies shall be considered Mexican in all which concerns their relations with the government and the rights and obligations stipulated in the respective concessions.
8th. The Executive shall fix in the manner most convenient the terms of payment of the subsidies.
9th. The Executive, in making use of this authorization, shall not prejudice the rights acquired by the States in virtue of former concessions.
10th. The concessionary companies, in case they can acquire them, shall utilize the lines which have been constructed upon the route adopted by them. Otherwise they may construct parallel lines. In either event, they shall not receive more than the excess of their own subsidy above that of the line already constructed.
11th. The forfeiture of any concession having been decreed the nation shall acquire the ownership of the part of the way constructed free from all encumbrance and at a valuation fixed by experts named by the Executive and by the company.
From this valuation shall be deducted the amount of the subsidies paid to the company, and for the remainder the Executive shall emit obligations secured ​by a mortgage of the road, which he may transfer by means of a new concession.
The rate of interest which the obligations may bear, and the manner of retiring them, shall be fixed in each concession.
12th. These authorizations shall be in force during the time of the recess of Congress, at the end of which the Executive shall give an account of the use which he has made of them.
Given in the Palace of the Executive Power of the Union in Mexico, on the 1st of June, 1880.
Porfirio Diaz.
(Translation, from "Mexican Central Railway Co., Limited.")
Chapter I. Construction of the Railways.
Article 1. . . .
At the end of the ninety-nine years of the grant, the line will pass, in good condition and free of debt, to the ​control of the Republic; but the Government shall purchase all the stations, warehouses, work shops, rolling stock, tools, furniture, and fixtures which the Company may have for the use and operation of the road, and shall pay in cash the prices of said stations, storehouses, workshops, rolling stock, tools, furniture, and fixtures, fixed by two experts, one named by each party, and a third previously appointed by those two to act in case of discord.
If the Government thereafter wishes to rent or sell the line the Company will be entitled to preference. . . .
Article 5. . . .
An engineer will be appointed by the Executive to accompany each party of surveying engineers. The salary of said engineer will be fixed by the Executive and paid by the Company, said salary not to exceed $4,000 per annum.
CHAPTER II. Basis of the Company.
Article 13. . . . Within six months from the date of this contract, a part of the Board, consisting of five directors, shall reside in Mexico. Of these, two shall be appointed by the Government, and three by the Company.
The Directors named by the Government may reside in Mexico or abroad.
The salaries of the Directors named by the Government shall be fixed by the Executive and paid by the Company, and shall not exceed $3,000 per annum. ​CHAPTER III. Concessions and Prohibitions.
Article 21.
To aid the construction of the lines of railroad and telegraph to which this contract refers, the Government binds itself to give to the Company or Companies a subsidy of $9,500 for each kilometre of the road constructed and approved by the Department of Public Works, according to the terms of this law. This subsidy shall commence to be paid after the completion of the first one hundred and fifty kilometres on the line from Mexico to Leon, and successively for each section of twenty-five kilometres.
On the section from Mexico to Huehuetoca, and from Celaya to Irapuato, and generally on all the narrow gauge lines already built, and which, according to Article 52, may be acquired by the Company or Companies the Government shall only allow a subsidy of $1,500 per kilometre.
Article 27.
The Mexican Government will exact no taxes which are not expressed in the following article, for the simple traffic of passengers, correspondence, and merchandise, over the international and inter-oceanic lines during the period of twenty-five years, counting from the conclusion of each one of said lines; and all effects and merchandise destined solely to traverse the road, and not for consumption in the country, shall be free from every kind of customhouse and port duties as well as from taxes and imposts of every class.