# Mexico under Carranza/Chapter 4

Contents
CHAPTER IV
* How the Carrancistas Have Treated the Interests of Foreign Investors
HAVING learned in the preceding chapter that the Carrancistas denounce foreign investments as a great wrong against their country, and having examined in detail the nature and extent of these alleged injuries, it may be of interest to ascertain just how these self-constituted guardians of the National honour have avenged the offenses, and what steps they have taken to put the Mexican people in possession of their own. It would be logical, if anything relating to such an extraordinary point of view may be so characterized, for the Carrancistas to begin their task of redressing grievances by first calling to account the alien investments most vitally important to the economic welfare of Mexico; and that is precisely what they did.
Cheap fuel is a prime requisite of industry. Until a score of years ago Mexico was almost entirely dependent upon coal imported from the United States at heavy expense for fuel for railroad and industrial needs. Then coal of good quality ​was discovered in the State of Coahuila. American, French, English, and Mexican capitalists combined to form the Compañía Carbonifera Agujita e Annexas which developed large mines at Agujita and Lampacitos which furnished the railroads with an abundant supply of much cheaper fuel than they had ever had before, and also rendered possible the building of large smelters, the development of iron mines, the establishment of iron and steel production, and other important industries.
These alien coal barons were not long permitted to continue their crime of enabling many thousands of Mexicans to earn a far better livelihood than they had ever enjoyed before cheap fuel became known. One of the first acts of Carranza after his revolution was anounced in the "Plan of Guadalupe," on March 26, 1913, was to send his brother, Jesús Carranza, on May 26 to call these coal producers to account. Perhaps the story of what followed cannot be better told than in the words of an American who was interested in the works. Here is what he wrote:
"Shortly after the assassination of President Madero, the mines at Lampacitos were visited by General Jesús Carranza, a brother of the present First Chief of Mexico, who, in command of a revolutionary body, demanded of the manager of the mines that he be paid 100,000 pesos, in default of ​which, he threatened to burn and destroy the plant. As the manager had not such a sum in his possession, and telegraphic communication with the headquarters of the Company in the City of Mexico was interrupted, he was unable to comply with the demand and General Carranza thereupon proceeded to destroy the plant, and in prosecution of such intent, dynamited several hundred coke ovens, burned most of the houses and buildings, and destroyed the extensive structures of the company, such as the tipple and washer.
"After completing such work of destruction, General Jesús Carranza announced that he intended to march immediately to Agujita, the other plant of the company, situated some fifty miles from Lampacitos and that if, by the time he arrived there, the money previously demanded by him was not paid, he would destroy the plant in Agujita.
"Upon arriving at the latter named place, the corporation representative being without money and being unable to comply with the demand of general Carranza, the latter proceeded to destroy the plant at Agujita and would have succeeded, as in the case of Lampacitos but for the fact that his troops were frightened away before the destruction was completed by the rumoured approach of Huerta's forces.
"General Carranza did not destroy a large body of coke which was on hand at the time of the depredations committed by him and his forces and this has been regarded by the shareholders of the company as one of the sources from which it would be able to derive large sums of cash to be immediately used in the work of rehabilitating the mines.
​"I am just in receipt of a Declaration of Forfeiture of various mining properties in Coahuila, including among others the plant at Agujita above described. The R. Muzquiz, whose name is signed to the Declaration of Forfeiture, I am informed, is the Chief at Coahuila of the civil partisans of First Chief Carranza.
"It is believed that the first object of the Declaration of Forfeiture is to provide means whereby some 30,000 tons of coke on hand, and worth at the present time about 2,000,000 pesos in Carranza currency, may be disposed of."
Observe the thoroughness with which this particular alien wrong was set right. First, Carranza, through his brother, imposes a penalty of 100,000 pesos upon the coal company for producing the fuel which made it possible for many thousands of Mexicans to earn a livelihood. Failing to collect promptly enough, he wrecks the property as a warning to other aliens to be quick with the cash. The fact that several thousand Mexicans employed in and around the mines were left to starve was a minor incident. Finally, he declares the title to these important mining enterprises forfeited because the owners had ceased to operate them after Jesús Carranza did such a good job of wrecking them.
What happened to these coal mines is typical of the fate of most industrial enterprises owned by Americans in Mexico. To make the story ​complete the fact may be added that after the mines had stood idle for some time, because the owners, having no assurance of protection, dared not restore them to operation, the properties were purchased for a very small part of their value by a corporation representing a group of German capitalists whose headquarters are in Frankfort-on-the-Main. The new owners, under the protection which everything German receives from Carranza, have reopened these mines, and are now producing coal and coke with which to operate smelters which they have also acquired in Mexico, and which are conducted in competition with American-owned smelters whose operations have been hampered in every way, and some of which have been closed altogether by the exactions of the government.
The foregoing is only one of numerous instances in which Germans have been able to secure, at a small fraction of their true worth, properties belonging to citizens of our own country and of our allies, France and Great Britain, the value of which had been largely destroyed by the exactions of the government now in power in Mexico.
The most humiliating result of the Germanophile character of the Carranza element has been that it has forced American citizens to seek for their properties the protection of the German flag. An incident of this sort some time ago came to my ​attention because it happened to concern residents of Los Angeles with whom I am very well acquainted. These men were developing a large rubber and coffee plantation in Mexico. They purchased the land, which was unimproved jungle, from private owners at a good price. Had the plans of the investors been carried out, a great property worth millions of dollars, subject to taxation, would have been created. They happened to have as a manager a German whose nationality was attested by a distinctly Teutonic name. This man had shown himself to be trustworthy, and, when it became evident that the powers in Mexico had great respect for German rights and none whatever for those of citizens of the United States, the owners of this great property placed it in the name of their German manager. Some time ago they showed me a letter from this manager, in which, after telling that all the goods in the store maintained on the property had been taken by a company of soldiers from military headquarters near by, he continued:
"I am glad to inform you that we were able to recover most of the goods taken away from us by the government to the capital. The governor, hearing they belonged to us, gave order for their release and what was left was immediately returned to us. When we think of the fact that other people have lost their entire stock and shipments, we may ​consider ourselves belonging to the more favourably and considerately treated people."
The other people referred to in the quotation were foreigners, not Germans, who had not been provident enough to place their properties under the aegis of a German name. The existence in a neighbouring country of a condition which makes it necessary for American citizens to seek protection from looting and destruction of their property by placing it under the protection of the bloody flag of Germany is something which no one who endeavours to confine himself to moderate language can comment upon.
Some years ago, the Richardson Construction Company, including some of the wealthiest men in New York City, was organized for the purpose of impounding the waters of the Yaqui River to irrigate a body of 800,000 acres of arid land in the Yaqui Valley. The company purchased from private owners about 400,000 acres in the state of Sonora. The remainder of the land to be irrigated belonged to numerous private holders, mostly Mexican citizens. A contract was made between the company and the national government, by the terms of which the company, in consideration of certain payments made and certain obligations assumed, was authorized to use the waters of the river up to a designated maximum ​which was estimated as being the amount required to irrigate all the land under the project. The rates at which this water was to be furnished by the company to the owners of land were named in the agreement, and were very low — much lower, in fact, than the rates for irrigation which prevail in Southern California. The land, while unproductive in its arid state, is, when irrigated, among the most fertile in the world. A date for the completion of the work was named, with the provision that the term should be extended to cover any delays in the work for which the company was not responsible. The company by the terms of its contract gave security for the carrying out of its agreement, the estimated total cost of which was about $14,000,000. The land, under irrigation, would have been worth $100 per acre or more. The project fully carried out would have created an economic asset, subject to taxation, of a value, of nearly or quite $100,000,000. The company in 1909, entered into an agreement with the state government of Sonora, by the terms of which the state, appreciating that the land was of little value until canals could be built, agreed not to assess its holdings higher than 4 pesos a hectare for the term of ten years.
From 1912 until the present time, conditions in the Yaqui Valley have been so uncertain and the raids of the Yaqui Indians have been so ​unrestrained that the company has been unable to begin the construction of its large dams. Pending this work, however, the company has constructed a wing dam and has built about 400 miles of canals which provide irrigation for 30,000 acres of land, about one half of which belongs to Mexican citizens. The company also established an experimental station for testing the value of various agricultural products, and published, in Spanish and English, bulletins giving the result of these experiments, which were distributed gratuitously to all applicants. In other words, it established a fully equipped agricultural experiment station, giving to the Mexican people a service which their own government had never adequately performed.
In 1915 the Carranza government installed General Calles as military governor of the state of Sonora. Among the first acts of this governor was the issuance of a decree, No. 17, dated December 23, 1915, the apparent object of which was the confiscation of property by levying high taxes impossible of payment, especially so that the land could not be used because of Yaqui Indian depredations and generally abnormal conditions. When the company objected to this taxation and referred to its contract with the state government of Sonora, dated 1909, it was told that Governor Calles had cancelled this contract and that it must pay the taxes provided in the decree.
​Under the political organization of Mexico, the territory of the state is divided into a number of smaller areas called municipalities; these municipalities have no relation to the density of population in the country, but are extensive areas of country land, frequently including 500 square miles or more. In addition to the assessment made by the state government for purposes of taxation, the municipality assessed the land an amount varying from 50 per cent, to 75 per cent, of the state assessment. Under the national law of taxation as established by Carranza's government, national revenue stamps to the amount of 60 per cent, of the amount of the state and municipal taxes must be placed upon the receipts for these taxes before they are valid. Thus the projectors of this great enterprise were met with a demand to pay a state tax upon their arid lands assessed at the value of productive lands; to pay a municipal tax ranging from 50 per cent, to 75 per cent, of the state's valuation and, in addition, to pay a national tax which was 60 per cent, of the sum of the state and municipal taxes.
It may be interesting to note in this connection that during the Diaz period the maximum of the national stamp tax required to be paid upon state taxes was only 20 per cent, while the Carranza government has tripled the national tax. This assessment was resisted by the company. The ​government of Sonora then proceeded to sell some of the company's improved property, including company buildings, to satisfy the state tax, and demanded that the company should pay on account of this tax one half of all its receipts from irrigation, and proceeded to enforce the demand by taking money from the safe in the company's office by force. Later on, these assessments were modified. But recently the company has been faced by an exaction in another form which shows the utter lack of conscience, as well as of all care for the economic future of their country, which characterizes the Carranza officials.
The last exaction came in the form of a federal decree demanding that the company pay an annual tax on the maximum amount of water that its contract with the federal government gives it the right to divert from the Yaqui River for the irrigation of the entire valley, approximately 800,000 acres of land, payment of this annual tax to begin at once, although the contract provides a period of approximately twenty years in which to complete the irrigation system and subdivide the lands that will then, and not until then, be using the maximum amount of water provided. Upon the representative of the company explaining to the Secretary of Fomento that the company could not exist under such a burden, especially as it was being prevented from completing its work by the failure ​of the government to protect its workmen from raids by the Yaqui Indians and that it stood ready at all times to carry out its agreement as soon as conditions permitted, it was met with a threat that its right to the waters of the Yaqui River would be forfeited and that innumerable smaller rights to these waters would be issued so that each man or small group of men could provide their own system of irrigation.
Of course, it would be utterly impossible to irrigate adequately and economically so great an area of land except by one system under single management, requiring many millions of dollars. With this investment made, as originally planned, water would be delivered for irrigating this wonderfully rich territory at a very low cost. The Mexican Government has no money to carry out the plan and no prospects of ever securing any. Yet, because the company will not submit to a robbery which would bankrupt it in a short time, this official of the national government proposes to destroy an enterprise that would produce hundreds of millions of value where nothing exists to-day. It would also furnish employment to thousands of Mexican labourers and would result in building up a great property subject to taxation.
This is one example of the way many enterprises of like character are being destroyed by the Carranza government as a result of a short-sighted ​and unpatriotic greed which prefers a few dollars of loot in the present to a great national benefit in the future.
In all the stories that have been written of the robbery and oft-times murder by revolutionists during the last seven years, and especially by the revolutionists headed by Carranza, nothing is more pitiful than the destruction of a number of agricultural colonies established by Americans. These colonists represented foreign invasion of the most beneficent character. The members of these communities were industrious, frugal Americans whose efforts were devoted to making land, which before had been unproductive, yield the things most needed in their adopted country.
The first result of the success of these colonies consisted in increasing the national wealth to a large extent by producing property subject to taxation. They also gave employment to great numbers of the agricultural labouring class of Mexicans at wages higher than they had ever before known. In addition, they furnished examples to the Mexican people of improved methods of cultivation which should have made them of great economic value to the country.
There were a number of these American colonies, at Garcia, Pacheco, Juarez, Dublan, Diaz, and other places in the states of Sonora and Chihuahua. An incomplete list of these colonists, ​prepared by U. S. Senator Fall of New Mexico for the use of our Secretary of State, enumerates 284 men, 301 women, and 1,266 children, 1,100 of whom had been born in Mexico. All the persons on this list not born in Mexico had lived there from ten to twenty-eight years.
A typical example of what these colonists were subjected to is shown by the following statement of one of them:
"There must have been 125 houses destroyed at Colonia Diaz, which I believe suffered more than the others. We had just three hours to get out, leaving all the accumulations of years of hard work. Oh, it was hard! I don't want to think of it. We left June 2, 1913, as the bandits destroyed my two story granary and threshing machine. I laid out that place twenty-eight years ago and, so to speak, grew up with it, so you can imagine how I feel in the matter. Several times the Mexicans thrashed through the colony, playing havoc with it each time until now it is in absolute ruin. Beautiful homes all destroyed, farm equipment burned. Everything those wretches could lay their hands on they burned or wrecked. I had 300 head of Polled Angus cattle; I saved only 29 head. Of 80 horses we had on the ranch, only 8 escaped the hands of the bandits. In that section, there were ten stallions worth $50,000. We did manage to save 3 or 4 from the bandits. I had 6,000 bushels of wheat on my ranch a year ago. It went quickly when the revolutionists showed up. In the colony ​altogether there must have been 40,000 bushels, all of which went. There were about 4,000 people in the colonies. There are now only a few families left and they are in danger."
It will be noted that the outrages recited by this American citizen, who had devoted twenty-eight years of his life to building up a valuable property, occurred after the beginning of the Carranza revolution, March 26, 1913. While the outrages were not all perpetrated by followers of Carranza, most of them were, because his followers were more numerous than those of all other revolutionist leaders combined.
The American farmers who composed these little centres of agricultural industry and prosperity were in no sense exploiters of Mexico under concessions granted by the Diaz government, for they had purchased the land upon which they built their homes and depended upon their own industry, economy, and enterprise for the prosperity which they had achieved, and not upon any advantage secured by concessions, or privileges of any kind granted by the Mexican Government. The destructive effects of the Carranza government on the financial life of the country are shown in the treatment of the greatest two banking institutions in its capital city; the Banco Nacional, representing French capital, and the Bank of ​London and Mexico, representing French and English capital. The following description of the way the Carranza government dealt with the Banco Nacional was secured from a man who was at one time connected with that institution. He says:
"For having tried timidly to prevent the afflux of this depreciated paper in its vaults, the directors of the bank were imprisoned and the employees were molested.
"The paper of the other governments (Villa and Zapata), which the bank was obliged to receive in payment, was declared to be invalid and it had to be remitted to the authorities and destroyed.
"It is thus that more than 30,000,000 pesos in current account alone, representing active funds of the bank amounting to $15,000,000 were reimbursed by paper which, on an average, was not worth more than three or four million dollars.
"On September 15, 1916, Carranza issued a decree annulling the concessions of circulation of the banks, fixing a period of sixty days in which to increase their specie holdings up to an amount equal to the amount of their circulation, establishing Sequestration Councils composed of three ​members nominated by the government and forbidding the banks to transact any business without the sanction of the Secretary of Hacienda.
"On September 26, the Council of Sequestration named by the government went to the Banco Nacional to take possession. As the Directors' Council of the bank protested against these violent measures, on September 28, the manager and the assistant manager of the bank were arrested at their homes by order of the military authorities, while an armed force presented itself at the bank, making all employees and domestics leave and then closing the doors.
"The bank was forced to grant to the government a first loan of 5,000,000 gold pesos. This forced loan was followed by others until all specie holdings of the bank were successively remitted to the government and the bank was thus despoiled of thirty to thirty-five million pesos in gold and silver which had guaranteed the circulation before the Carranza government came into power. Since then and until the present time the bank, besides having been thus deprived of its specie holdings, was forbidden to transact any financial business, exchange or other; so that it is obliged to maintain a staff of employees and to meet general expenses which are very high, while it is impossible for it to earn a cent. Practically, the Banco Nacional has seen its credit balance reduced to almost nothing, as a result of the obligation to-accept paper money; its concession which was granted in 1 884 has been annulled; it has been forbidden to transact any financial business, even the most, legitimate; in principle, its management is in the hands of the ​Council of Sequestration although in fact, thanks to the loans which have been granted, the old administration has been tolerated; almost all of its branches have been closed; finally, it has been obliged to loan to the government its entire specie holdings, "gold" and silver."
The experience of the London and Mexico Bank was equally disastrous. On July 3, 1917, the Board of Directors of that Bank published its annual report in El Universal, the leading daily paper of the City of Mexico, in which it said:
"It was then reported that of the amount of more than nineteen million pesos in gold and silver in bars and coin which has been in the bank's vaults, there had been slowly taken away from January 18, 1917, until the present time, the sum of more than seventeen million pesos; there remaining in the vaults, according to information received by the Board of Directors, only about two million pesos. In the report it was stated that the Board of Receivers (a board appointed by and representing the Carranza government), ordered that the cash department and the safes should always remain open, which measure obliged the Board of Directors to put a corps of employees on guard in this department, day and night, to avoid responsibility for abstraction of funds from the vaults falling on those not responsible. "The Board stated categorically that of the $19,611,141 in specie which were in the vaults of the bank, hardly $2,000,000 remain, as the Board ​of Receivers, had disposed of the difference, and that the said Board of Receivers has sold at the lowest prices securities considered first class by the bank.
"That on February 15, 1917, the Department of Finance refused to recognize the bank's Board of Directors, refusing to take up any matter connected with the institution with them and ordered that the Board of Receivers liquidate the bank.
"Mention was made of a communication from the Department of Finance in October last year, asking for delivery to the mint of the bars of metal which the bank had in vault and a message from the Sub-Secretary of Finance was annexed, sent from Queretaro to the manager of the bank, categorically stating that the money coined therefrom would be returned to the bank; and it was reported that, notwithstanding this assurance given by the Sub-Secretary of Finance, compliance with this written offer has never been made.
"Finally, it was stated that of 820 silver bars, taken by the government, worth more than a million pesos, national gold, and eighty gold bars worth. 1,840,1 19 pesos, to be coined by the mint, they have returned to the bank, in the breach of the offer made from Queretero by the Sub-Secretary of Finance, only 299,675 pesos for the silver bars and 200,000 pesos for the gold bars, causing the bank a deficit of 2,697,387 pesos."
The foregoing instances of the robbery of foreigners by the government now in power might ​be multiplied until they would fill all the pages of this book without exhausting the list. They are given as being merely illustrative of the character of the Carrancistas. The list of what they have wrecked and ruined might be extended to include mines, smelters, public-service corporations, railroads, and in fact every kind of financial and industrial enterprise which contributes to the well-being of a country.
The spirit of looting and dishonesty which rules the present government appears to have been very frankly indicated in a series of articles published last year by Luis Cabrera, at one time Secretary of Finance in the Carranza cabinet and one of the most prominent leaders in the Carranza revolutionary party. It appears that Mr. Cabrera had been accused by some of his enemies of profiting by his control of the national finances. In response to this accusation, he published three articles in El Universal, in the City of Mexico, in which, while admitting that large amounts of property and sums of money had come into possession of the military officials as a result of robbery and confiscation, he denies that this money had found its way into the national or state treasuries. In his explanation Secretary Cabrera shows how this was done, as follows (we quote verbatim from El Universal; the italics are ours):
"During the constitutionalists' revolution, the case has been repeated, with unfortunate frequency, under the pretext of confiscating 'intervened' properties, and great quantities of private property have been seized in the beginning for the nation, but the confiscators have used them for personal profit or sold them for money. It is unnecessary to bring proofs of this, for unfortunately, almost all of the confiscation of the enemies' properties, with honourable exceptions, have been made with the deliberate intention of converting the goods for private use. This goes from the mere 'loan' of a horse or saddle, from the requisition of grain and fodder which are not used for the troops, to the occupation of houses, property, and ranches which have been confiscated and were cultivated and exploited directly for the benefit of the confiscator."
Following is a list of some of the important properties belonging to foreigners of which the Carranza government has taken possession and is using without compensation to the owners:
* National Railways of Mexico: representing British, American and French capital;
* Mexican Railway, Vera Cruz-Mexico City; British capital;
* Wells-Fargo Express Co.; American capital;
* Vera Cruz to the Isthmus Railway; American and British capital; ​
* Inter-Oceanic Railway; British capital;
* Mexico Telephone and Telegraph Co.; American capital;
* Street Railway of Mexico City; Canadian and American capital;
* Railways of Yucatan; British capital;
* Mexican Navigation Co.; American capital; Ships under Mexican flag;
* The London and Mexico Bank; French and British capital;
* The Banco Nacional; French capital.
The railways have been almost entirely wrecked; the capital of the banks has been used for the purposes of the Carranza government and not one cent has been paid, or any effort made to pay one cent, to the owners of these properties although they have, for years, had neither use of the properties nor income therefrom.
Thus, we see that Mexico is in the grasp of men who have sacrificed, and are continuing to sacrifice, the welfare of the country for the opportunity to secure by looting the immediate dollar. It is nothing to these men that a great coal company, producing a vital necessity of the industrial and economic life of Mexico should have been wrecked because they were disappointed in not having been able to rob the management of that company of 100,000 pesos. It is nothing to them that a great irrigation enterprise, that would have created ​$100,000,000 of value, given employment to thousands of people, produced a great taxable asset to the country, and yielded immense annual production of foodstuffs and cotton worth millions of dollars, should be wrecked and ruined. All this they are willing to sacrifice in order to secure a few dollars of present loot. It is nothing that the great financial institutions of the country, which furnished the capital that is the life blood of business, should be wrecked and ruined provided they can secure some present money which almost all goes to the army for the purpose of maintaining the heads of that organization in a life of vicious indulgence in the capital city.
It is this spirit now controlling the government which has destroyed the industry of Mexico and deprived hundreds of thousands of its people of the chance to make a living; has caused thousands of them to starve to death; has reduced the compensation of its labourers and school teachers until their incomes will barely sustain life, or has deprived them of employment altogether and has made the country the social and economic wreck that it stands to-day.
No account of the treatment of foreigners by the Carrancistas would be complete without a reference to the number of American citizens who have lost their lives at the hands of the revolutionists.
​A list of 285 American citizens, with their names and addresses, who were killed by Mexican revolutionists between December, 1910, and September, 1916, was carefully compiled by private parties for the information of our Government. This list, which is given in full in Appendix III, did not pretend to be complete, for it did not include the two officers and thirteen men killed by the followers of Carranza at Carrizal, nor many other Americans known to have been killed but whom it has not been possible to identify.
The most disquieting feature of this shameful series of crimes is that it has continued uninterrupted and unrebuked to the present moment. The New York Times of October 20, 1918, contained a list of sixty-one outrages including ten murders and two kidnappings, the victims of which were held for ransom, not for all of Mexico, be it remembered, but for the oil regions alone, in a period of six months and eight days ending July 31, 1918, an average of an outrage every three days. This list is reproduced in Appendix IV. It will be noted that not all the crimes were committed by banditti but that some were perpetrated by Carranza soldiers in uniform. In one instance Carranza soldiers overtook banditti who had just robbed a launch of a considerable sum and robbed the robbers. In still another instance the banditti compelled their victim to sign a certificate to ​satisfy their commander that they had stolen everything there was to take. The oil fields offer a happy hunting ground for robbers in uniform or out of it, because money is more plentiful there than elsewhere, as the petroleum industry is about the only one left in anything approximating full operation.
Probably no better statement of outrages upon the persons of Americans could be made than that contained in the letter of our Secretary of State of June 20, 1916, addressed to the "Secretary of Foreign Relations of the de facto government of Mexico." This letter was provoked by a most impudent communication addressed by C. Aguilar, Secretary of Foreign Relations of the Carranza régime, which the United States had recognized as the de facto government of Mexico, to Secretary of State Lansing, in which the writer accused our Government of bad faith in sending troops into Mexico to apprehend bandits who had invaded our country and murdered our citizens. The letter of Secretary Lansing in reply is probably one of the most remarkable documents ever framed by an officer of a responsible government in the showing that it made of tame submission to outrages upon its citizens. The only consolation for an American citizen in the whole dismal recital is found in the evident burning indignation of the Secretary of State at the existence of ​conditions which made such a letter possible. In his letter the Secretary says (Italics are the author's):
"For three years the Mexican Republic has been torn with civil strife; the lives of Americans and other aliens have been sacrificed; vast properties developed by American capital and enterprise have been destroyed or rendered unproductive; bandits have been permitted to roam at will through the territory contiguous to the United States and to seize, without punishment or without effective attempt at punishment, the property of Americans, while the lives of citizens of the United States, who ventured to remain in Mexican territory, or to return to protect their interests, have been taken, in some cases barbarously taken, and the murderers have neither been apprehended nor brought to justice.
"It would be difficult to find in the annals of the history of Mexico conditions more deplorable than those that have existed there during these recent years of civil war.
"It would be tedious to recount instance after instance, outrage after outrage, atrocity after atrocity, to illustrate the true nature and extent of the widespread conditions of lawlessness and violence which have prevailed. During the past nine months in particular, the frontier of the United States along lower Rio Grande has been thrown into a state of constant apprehension and turmoil because of frequent and sudden incursions into American territory and depredations and murders on American soil by Mexican bandits, who have ​taken the lives and destroyed the property of American citizens, sometimes carrying American citizens across the international boundary with the booty seized.
"American garrisons have been attacked at night, American soldiers killed and their equipment and horses stolen. American ranches have been raided, property stolen and destroyed, and American trains wrecked and plundered. The attacks on Brownsville, Red House Ferry, Progreso Post Office, and Las Peladas, all occurring during September last, are typical. In these attacks on American territory, Carrancista adherents, and even Carrancista soldiers, took part in the looting, burning, and killing. Not only were these murders characterized by ruthless brutality, but uncivilized acts of mutilation were perpetrated. Representations were made to General Carranza, and he was emphatically requested to stop reprehensive acts in a section which he has long claimed to be under the complete dominion of his authority. Notwithstanding these representations and the promise of General Nafaratte to prevent attacks along the international boundary, in the following month of October a passenger train was wrecked by bandits, and several persons killed, seven miles north of Brownsville, and an attack was made upon United States troops at the same place several days later.
"Since these attacks, leaders of the bandits, well known both to Mexican civil and military authorities, as well as to American officers, have ​been enjoying with impunity the liberty of the towns of northern Mexico.
"So far has the indifference of the de facto government to these atrocities gone that some of these leaders, as I am advised, have received not only the protection of that government, but encouragement and aid as well. Depredations upon American persons and property within Mexican jurisdiction have been still more numerous.
"This Government has repeatedly requested, in the strongest terms, that the de facto government safeguard the lives and homes of American citizens and furnish the protection, which international obligations impose, to American interests in the northern states of Tamaulipas, Nuevo Leon, Coahuila, Chihuahua, and Sonora, and also in the states to the south.
"For example, on January 3d, troops were requested to punish the band of outlaws which looted the Cusi mining property, eighty miles west of Chihuahua, but no effective results came of this request.
"During the following week the bandit, Villa, with his band of about 200 men, was operating without opposition between Rubio and Santa Ysabel, a fact well known to Carrancista authorities. Meanwhile a party of unfortunate Americans started by train from Chihuahua to visit the Cusi mines, after having received assurances from the Carrancista authorities in the state of Chihuahua that the country was safe and that a guard on the train was not necessary. The Americans held passports of safe conduct issued by the authorities of the de facto government. On January 10th, the train was ​stopped by Villa bandits and eighteen of the American party were stripped of their clothing and shot in cold blood in what is now known as the Santa Ysabel Massacre.
Within a month after this barbarous slaughter of inoffensive Americans, it was notorious that Villa was operating within twenty miles of Cusihuiriachic and publicly stated that his purpose was to destroy American lives and property. Despite repeated and insistent demands that military protection should be furnished to Americans, Villa openly carried on his operations, constantly approaching closer and closer to the border. He was not intercepted nor were his movements impeded by troops of the de facto government and no effectual attempt was made to frustrate his hostile designs against Americans. In fact, as I am informed, while Villa and his band were slowly moving toward the American frontier in the neighbourhood of Columbus, N. M., not a single Mexican soldier was seen in this vicinity, yet tie Mexican authorities were fully cognisant of his movements and on March 6, as General Gavira publicly announced, he advised the military authorities of the outlaws' approach to the border so that they might be prepared to prevent him from crossing the boundary.
"Villa's unhindered activities culminated in the unprovoked and cold-blooded attack upon American soldiers and citizens in the town of Columbus on the night of March 9, the details of which do not need repetition here in order to refresh your memory with the heinousness of the crime. After murdering, burning, and plundering, Villa and his bandits, fleeing south, passed within sight of the ​Carrancista military post at Casas Grandes, and no effort was made to stop ~him by the officers and garrison of the de facto government stationed there.
American forces pursued the lawless bandits as far as Parral where the pursuit was halted by the hostility of Mexicans presumed to be loyal to the de facto government, who arrayed themselves on the side of outlawry and became in effect the protectors of Villa and his band.
I am reluctant to be forced to the conclusion which might be drawn from these circumstances that the de facto government, in spite of the crimes committed and the sinister designs of Villa and his followers, did not and do not now intend or desire that these outlaws should be captured, destroyed, or dispersed by American troops, or at the request of this Government, by Mexican troops.
Candour compels me to add that the unconcealed hostility of the subordinate military commanders of the de facto government toward the American troops engaged in pursuing the Villa bandits and the efforts of the de facto government to compel their withdrawal from Mexican territory by threats and show of military force, instead of by aiding in the capture of the outlaws, constitute a menace to the safety of American troops and to the peace of the border.
In view of this increased menace, of the inactivity of the Carranza forces, of the lack of co-operation in the apprehension of the Villa bandits and of the known encouragement and aid given to bandit leaders, it is unreasonable to expect the United States to withdraw its forces from Mexican territory or to prevent their entry again when their presence is the only check upon further bandit ​outrages and the only efficient means of protecting American lives and homes, — safeguards which General Carranza, though internationally obligated to supply, is manifestly unable or unwilling to give."
Surely no further proof should be needed of the fact that Carranza and his followers have, from the very beginning, been inspired by a spirit of lawless aggression in their dealings with Americans and the citizens of our allies, England and France, which has led them to violate every principle of international law which is supposed to govern the conduct of a country toward the nationals of other countries.
That the Carranza party has been permitted to carry on without restraint its lawless dealings with the persons and properties of all foreigners in Mexico, except the citizens of Germany, must be accepted as one of the results of the great war; but, in view of the failure of our own Government, during eight years' revolutionary activity in Mexico, to furnish any protection worthy of the name to the persons and property rights of Americans in that country, we probably cannot claim that the war has had any effect upon the treatment of American citizens there. During the first two years of revolution begun by Madero and continued by several leaders who challenged his power after he had succeeded Diaz, many offences against ​the persons and property of Americans in Mexico and along the border were committed by various revolutionary bands. During this period our country was under a republican administration, and the officers of that administration adopted the course of refusing protection to American citizens against offences from armed Mexicans, which appears to have been followed by our Government continuously since that time. In a speech made in the United States Senate on March 9, 1914, the Honorable Albert B. Fall, United States Senator from New Mexico, in criticizing the failure of President Taft's administration to afford protection to Americans against lawless invasion of their rights by Mexicans, said in reference to the killing of our citizens in El Paso by bullets from the guns of Mexican revolutionists:
"Mr. President, when their friends asked of the Government of the United States that it might investigate the killing of American citizens on ​American soil and obtain for their families some little measure of relief in the payment of damages to those who needed it for their daily subsistence, this great Nation in writing refused to consider their cases and relegated them to the Mexican courts in the Republic of Mexico.
"Finally this matter was brought to the attention of the Congress of the United States by the Senator from Arizona (Mr. Smith) and myself, and when the Congress of the United States finally understood the matter they took it out of the hands of the State Department, which had proven itself incapable and unworthy in dealing with affairs of this kind, and placed it in the hands of the War Department, who found damages to American citizens in El Paso for killing and wounding Americans, to the amount of $71,000 which should be paid by this Government, which might thereafter undertake to enforce its claims upon the government of Mexico.
"The Senate, Mr. President, I am proud to say, made an appropriation a year ago for the payment of these claims. Now the people are back here begging again at the hands of this Government that some little measure of justice to the children and widows of American citizens shot down on American soil may be provided as for two or three years they have been compelled to depend upon their own efforts."
It may not be amiss at this point to recall the fact that when the United States recognized the Carranza administration as the de jure ​government of Mexico it became legally bound under international law to collect all just claims of American citizens for damages to property or injuries to person from the Mexican Government. Failing so to collect, this Nation is morally, though not legally, bound to pay the claims itself. We recognized this principle of international law some forty years ago when twenty-one Chinamen were hanged in Los Angeles during an anti-Chinese outburst. Although China had no navy and was wholly incapable of enforcing any claim we voluntarily paid the bill for damages. We again recognized this principle a few years later, when a number of Italians were lynched at New Orleans, by paying promptly and without protest a bill for damages from the Italian Government. Finally we have recognized the duty of Government to protect its citizens wherever they may be, in more than a hundred instances in various places from the Chinese coast to Armenia; from Patagonia to Japan and on the Barbary coast. When armed force was necessary to insure protection or exact reparation for injury to its citizens the American Government has not hesitated to use such force in the past. Indeed, the protection of its citizens abroad as well as at home is one of the fundamental functions for which governments are created.
So bitterly did the citizens of the border states ​resent the failure of President Taft's administration to protect the rights of American citizens that the National Democratic Convention of 1912 included in its platform the following plank drafted by a delegate from El Paso:
"The constitutional rights of American citizens should protect them on our borders and go with them throughout the world, and every American citizen residing or having property in any foreign country is entitled to and must be given the full protection of the United States Government, both for himself and his property."
Now note how the pledge was fulfilled. In a speech on the floor of the Senate, March 9, 1914, Hon. Albert B. Fall, Senator from New Mexico, related his experience, in seeking protection for Americans in Mexico, at the hands of Secretary of State Bryan, who figured conspicuously in the convention that adopted this pledge, and who was appointed to the highest seat in the cabinet by the president elected upon the platform containing the pledge. Said the Senator:
"I went to the Secretary of State (Mr. Bryan) myself for the purpose of presenting to him a concrete case which occurred in the town of Cananea, where an American citizen was threatened with deportation by the so-called authorities of that ​Mexican state. During that conversation the same subject (character of American citizens in Mexico), was brought up to me, and it was stated that the Americans who were in Mexico were not Americans who were seeking to make homes there and help the country, but they were solely representatives of corporations, there for the purpose of exploiting the people, obtaining possessions, getting hold of dollars, and coming back to this country, and that they had no right to demand protection for their property".
Other responsible officials of this Government have since sought to justify their failure to protect the persons and property of Americans against lawless aggression in Mexico by the astounding allegation that our citizens had so conducted themselves there that they were unworthy of protection by this Government! Under such circumstances it is hardly surprising that crimes against the persons and property of Americans in Mexico, not alone by revolutionists, but also by the present recognized government, have been continued and enormously increased.
It is beyond belief that England and France would have submitted tamely to the outrages perpetrated upon their citizens if they had not been so fully occupied in fighting the German friends of the Carrancistas for the freedom of the world. The fact that in this emergency America failed ​to do anything for the protection of the nationals of these two countries furnishes no very striking evidence of our inclination and capacity to discharge the duty of maintaining orderly government in the Americas, which we have sometimes accepted as a corollary of the Monroe Doctrine.
Citizens are urged by the Government to help extend our foreign commerce. No argument should be needed to prove that in order to develop commerce with a foreign country our citizens must acquire business enterprises there. Every successful commercial nation has followed that policy. The two peoples that have been most successful in developing foreign commerce in the last half century are the English and the Germans. In the case of both the most prominent factor in their success has been the acquisition or creation of business enterprises abroad. Germany's activity in this direction is shown by the fact that the alien property custodian has taken possession of German investments in the United States valued at more than eight hundred million dollars.
The attitude of the American Government, as exemplified in its dealing with Mexican affairs, is that its citizens perpetrate a great wrong against any country with which they try to develop commerce unless they expatriate ​themselves and make their permanent homes there.
There was an especially good reason why Americans who went into Mexico should not give up their citizenship. While they were willing to risk their persons and the money they invested they could not be expected to forget that until Diaz established law and order Mexico had witnessed the rise and fall of seventy odd heads of government, in almost every instance as the result of a violent revolution of which the prominent feature was the looting of private property. Doubtless, Americans who cast their business fortunes in Mexico remembered the uncertainty of government during more than fifty years, and for that reason determined to maintain their American citizenship to which they might appeal for protection in the event that the Latin-Mexican element, which had exhibited its lawless greed so often, should attempt to violate their rights. That, when the day of need came for them to claim the shelter of the Stars and Stripes, its protection was denied them, is the saddest, most tragic chapter in all the history of our dealings with Mexico.
The Americans who went into Mexico upon the invitation of the government and played a great part in promoting the country's economic welfare are exactly the same sort of Americans who by the ​tens of thousands have within the past two decades emigrated to the wheat lands of Western Canada. These men, confident of the sort of government that they would be given by the Anglo-Saxon race became citizens of Canada and for more than four years fought the battles of their adopted country on the western front as a part of the Canadian troops who have made such glorious history.
Before leaving the subject of the destruction by the Carranza government of the property of citizens of our allies who for more than four years fought Germany, a reference to its effect upon the war would not be inappropriate. That such effect was achieved and that it was and is seriously burdensome to the Allies is easily shown.
The demands of the war have been particularly heavy upon copper, lead, rubber, and food, and the actions of the Carranza party have had a marked influence upon the production of all of those articles. It is, of course, impossible to secure at the present time any definite comparative figures by which the destruction of the industries producing those staples in Mexico can be accurately indicated. In the latter part of 1916, certain American mining interests operating in Mexico, supposed to represent in mass about two thirds of the American mining interests in that country, ​compiled for the use of our officials some figures showing the difference between the production of certain metals in the year 1912, the year before the Carranza revolution started, and in the first half of the year 1916. Following is a tabulation of these figures:
| | 1912 | 1912 | FIRST HALF OF 1916 | FIRST HALF OF 1916 |
| Ore | 5,180,059 | tons | 904,131 | tons |
| Gold | 252,843 | ounces | 39,895 | ounces |
| Silver | 31,892,735 | ounces | 6,200,339 | ounces |
| Copper | 74,984 | tons | 23,156 | tons |
| Lead | 70,939 | tons | 2,928 | tons |
| Zinc | 46,765 | tons | 11,183 | tons |
It will be noted that the foregoing table shows a reduction in the production of two metals of prime necessity in war, copper and lead, of about 38 per cent, in the former and more than 91 per cent, in the lead production. If to the foregoing figures should be added the reduced production of the American mining interests not represented, the loss would, of course, be increased by 50 per cent.
With the present development of the auto-vehicle, rubber is an article of prime necessity, especially in war. The following table prepared by the American companies engaged in producing rubber from the Guayule shrub in Mexico compares the production of the years 1910, which ​witnessed the beginning of revolutionary activities, and 1916:
Production of Guayule Rubber
From January, 1910, to December, 1916
| YEAR | POUNDS PRODUCED |
| 1910 | 28,488,320 |
| 1911 | 24,144,960 |
| 1912 | 20,172,000 |
| 1913 | 6,177,840 |
| 1914 | 1,904,000 |
| 1915 | 5,976,007 |
| 1916 | 1,070,924 |
It will be seen that the production of this necessity for the military establishments of our country and its allies during the war was reduced by more than 96 per cent. This, however, does not tell the full story of the loss. All rubber imported into the United States from Mexico can be brought by railroad. All other rubber imported required the use of ocean tonnage which was so precious after our entrance into the war. As the result of the destruction of rubber production in Mexico, many millions of pounds, to offset the loss, had to be brought in by the use of much maritime tonnage which might, of course, have been used for other most necessary purposes.
​The condition of the Mexican population, as indicated in the matter quoted from various sources, has resulted in a great reduction of food production in that country. This reduction has been so great that it was estimated about the beginning of 1918 that the United States would have to permit at least a hundred million bushels of corn to be shipped into Mexico to avert threatened starvation. In addition to this the burden of the allies who were fighting Germany was increased by the fact that at least a billion and a half dollars of the money of the United States and her allies invested in Mexico has had its earning power destroyed by confiscations and other lawless exactions of the Carranza government. Under normal conditions these Mexican investments had a very high earning power which could have borne a not inconsiderable share of the burdens of war. It must have been a matter of distinct gratification to Carranza and his pro-German associates that they were able to contribute so much to the aid of Germany and the burdens of her opponents.
But at last some, at least, of the Mexicans have awakened to an uncomfortable realization that a day of reckoning is at hand. One significant indication of this is to be found in an article published in A.B.C., of Mexico City, December 14, 1918. To make the matter more interesting the article has been brought to the attention of the State ​Department at Washington and of members of Congress. A.B.C. is the first independent newspaper of the Carranza regime. It came into notoriety at a time when one of its most prominent contributors, Licentiate Eduardo Pallares, was assaulted in a cowardly manner by a noted Mexican military chief, now at large in that city. Its editor was also brutally assaulted a few days later; and as a result of the action of the military and Germanophile Minister of the Interior the paper suspended publication. It has recently resumed publication, showing the same virility and independence as before. The leading article in the first issue after resumption began: "As we said yesterday," etc., which was the editorial way of refusing to recognize its suspension or to recant anything it had said. The article referred to of December 14, 1918 said:
"By a strange coincidence, the triumph of the Constitutionalist Revolution in August, 1914, coincided with the beginning of a war in Europe, whose consequences and duration none could foresee, but which would certainly contribute toward a definitive change in methods of government. But peace once more has come to the world, and governments are beginning to balance their books after the outpouring of men and material that the war required. But not alone those nations that took part in the struggle are checking up their accounts after these past four years, but also those ​that held aloof either through egoism or through necessity are making up their books, for they fully realize that the fruits of victory will be shared by all, in the measure of their deserts, and of certain special circumstances, and that the keen eye of the investigator will know how to weigh the attitude adopted by each in the war and to give to each what he deserves.
"As members, then, of a community which must shortly be the subject of inquiry of the chanceries of the world, our duty is to help our government in its tasks and to speak frankly, for the day of reckoning is upon us and we must avoid malicious deceptions and futile excuses which can only place our country in a humiliating position. It is preferable to fall face forward than to drop on our knees in suppliant tone.
"For four years and four months, the Constitutionalists in Mexico have conducted things in total disregard for the interests of all who did not belong to the political group in power. Not the most rudimentary principles of practical politics, nor the most elementary rules of diplomacy and courtesy stopped their action. Like the tables of proscription which gave such ill-fame to Scylla, there were expelled from the country nationals and foreigners alike, without regard even for the diplomatic status of some of the expelled. When Belgium was receiving the kindly consideration of all civilized nations for the heroic resistance she offered against the violators of her sovereignty, she received a sample of the characteristic courtesy which the Constitutionalists were beginning to show: her Minister was forced to leave at the express bidding of the ​revolutionary authorities. Later, the representatives of other nations, among them England, Guatemala and Spain, also left the country because they were held to be enemies of the revolution, while the representative of Brazil was accused of reactionary tendencies just at the moment when he was leaving to report to the Government of the United States as to his conduct of affairs while representing this latter nation. Diplomatic amenities were dispensed with; all were treated as if Dr. Francia had held the portfolio of Foreign Affairs. And if this was the fate of representatives accredited to Mexico, what was not the lot of the ordinary citizens of these countries, whose governments, on account of the state of war, could not give the necessary protection to their nationals? We do not deny that in certain cases the conduct of the above-mentioned diplomatic representatives may, at times, have been irregular, but, be this as it may, the action of the Constitutionalist government was, because of its display of brute force, both unwise and impolitic. On the other hand, it is our opinion that the majority of cases of the expulsion of foreigners was justified; which was not the case, however, with that of the nationals, some of whom were driven out under most infamous conditions.
"It is proper to recall that by virtue of, 'might is right' theory, the properties of many foreigners were seized, many of them being still administered by the government, now ruled by a political constitution which the Constitutionalists saw fit to impose upon the nation. The protests, covering each and every one of these acts, on file in our Department, will have to be drawn out of the pigeon-holes into which they have ​been relegated, in order to be considered anew; but excuses and pleas will no longer avail, for the hour has struck and the decision must be made. What answer can be given as to the cancellation of bank concessions and the forced loans from the banks, as to the seizure of the tramways and of the Mexican railroads, as to the indefinite suspension of the public debt services, as to failure to meet the railroad coupons, etc., etc.? We frankly do not know; but we foresee the full weight of responsibilities, and as Mexicans earnestly desire a solution satisfactory to our dignity and decorum. This doubt, however, assails us: Are those who direct our destinies in these days able to settle such momentous problems? If the group at present all-powerful in administration circles continues as it has heretofore, without new blood, without expelling from its midst the corrupt elements, we can readily give a categorical 'NO.'
"We must set down here — for this is the gravest of all our responsibilities — our attitude during the war, our much vaunted nationalism which served as a ready pretext for several authorities to support the Germanophile press, which favoured the election of the standard-bearer of the Teutons in Mexico as Senator for the Federal District. We must think, too, of the whole series of irritating acts of unjustified arrogance, of idiotic conduct which only the folly of several of our compatriots made possible. We must recall the withdrawal of our representative in Cuba as the first step toward carrying out a new international doctrine. We think of so many and so varied proofs of leaning toward Germany which if we were to relate them would make this article too long. Our purpose is merely to point ​out to our authorities the error of their ways, so that in the days about to dawn they should not fall into the same errors, since it is unfair that the Mexican nation and people should suffer the consequences of the mistakes, whims and inefficiency of certain, short-visioned authorities.
"Peace has surprised some of the leaders of the Administration who believed that their star would not set so soon, that the struggle would be indefinitely prolonged, and that, at last, the might of Germany would impose itself upon the world. All these illusions have disappeared in thin air, and they are suddenly brought face to face with the present situation. Let them take up new positions, because the problems with which they are beset are about to be settled, the hour of reckoning has struck, and we must be collected in order to appear in a proper rôle. We earnestly hope for this on behalf of Mexico, so that there may not befall her, as on other occasions guilt which is solely imputable to a group of Mexicans blinded by pride and ambition."