Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-04-06
INVESTING IN MEXICO
Advice to Americans Who Are
Looking for Profits.
BLIND TRUST is DANGEROUS
No Concerns Making Big Dividends
Are Looking for Partners.
GREAT BLOCKS OF STOCK SOLD
The Ubero Swindle the Greatest Dis
grace the Country Has Known
Its Deterrent Effect.
BLIND TRUST is DANGEROUS
GREAT BLOCKS OF STOCK SOLD
BY WILLIAM E. CURTIS.

BY WILLIAM E CURTIS.
Special Correspondence of The Star and Chicago
Record Herald
TERRA BLANCA, Mexico. March 81 1905.
Several self-evldent propositions apply to
Mexico in common to all other zones, hot
or cold, wet or dry. Christian or Pagan, and
some OF them are as follows:
!. No man or corporation Is likely to make
large profits in a strange country in busi-
ness which they do not understand
.. II any man or company has business
paying 80, 10 or 80 per cent profits they are
not likely to dispose of it to strangers.
3. II a man or company is able to guar
antee certain profits in any business 1t Will
not be necessary for them to advertise for
partners.
T. II so per cent year or 500 per cent in
ten years could be made by cultivating rub
Der, or sugar, or coffee, or anything else In
southern Mexico, such opportunities would
not be left open for spectators from Chi
cago or Boston. There are hundreds OF
Mexican capitalists who are on the lookout
for that sort of investment.
g. When a man a company is making
from 30 to 80 per cent profits in planting
coffee rubber, sugor or anything else the
stock of the company deriving these pronts
should be worth 300 or 800 per cent pre-
at less than par. Human beings In their
right minds do not sell anything Tor less
than il is worth.
These observations are suggested by the
shameful stories that are told down here OF
the manner in which northern people or
small incomes have been Swindled by spec
ulators who have offered them stock In
Mexican plantations with guarantees ana
promises of enormous dividends. The United
States consul general at the City OF Mexico
and the consul at Vera Cruz tell me that II
takes about one-half their time TO answer
letters received from the victims OF these
swfndlers, and that many OF the writer's
represent that they have invested their last
dollar or the savings OF lifetime IN enter
prlses of which they have no knowledge,
managed by men who are entire strangers
to them The Investments were made upon
nswspap per advertisements without turther
inquiry The managers of the enterprises
usually promised % and 30 per cent prohts,
were willing to guarantee 10 or 10 per cent,
and gave positive assurances that the in
vestors would receive all their money back
in ten or fifteen years.
The consuls have only one reply to make,
and that ts not consoling. They advise the
inauirers as tenderly as possible that they
have undoubtedly been the victims or SWln-
dlers and that 1t would have been wiser for
them to have asked about the matter before
investing their money; that there are many
reliable American corporations and individ-
uals engaged in the planting business IN
southern Mexico and that some of them are
supposed to be making profits of 10. 10 and
20 per cent, but that sueh div1aendS can
only expected under the most favorable cir
cunstances, and cannot be made by mex
perienced men.
Warning to Americans
The late Consul General Parsons. writing
from the City of Mexico on this subject
shortly before his death, said:
Legitimate investments in Mexico may
be expected to pay reasonable returns-per-
haps larger percentage Of profit than the
same amount of money could earn in the
United States-but promises of 200 to 900
per cent profit in five or ten years can be
set down as fakes pure and simple Many
wealthy Americans and other foreigners, as
well as MeXiCans, live in Mexico and have
their money invested. being generally Wen
satisfied with 10 to 10 per cent proht. me
whole Isthmus of Tehuantepec. and possibly
the entire tropical section of Mexico, could
be bought by capitalists residing IN TINS
city; and II there were any sure 2U0 per cent
Investments to be made In that region they
would certainly be taken up by persons on
the ground who are thoroughly familiar
with the conditions there. The speculative
bubble will be pricked one of these days, and
the small investors in the United States VIII
have lot OF prettily engraved shares OF
stock and some more or less valuable ex-
perience to show for the money they have
invested
This does Mexico and Americans no
good l am in receipt of an average OF
ten or fifteen letters each week from per
sons Of small means in the United States
who desire to invest in tropical agricul-
tural companies operating, or cla' ming 10
operate. In Mexico. asking for Information
ana advice concerning such companies and
Investments. One reply covers the whole
ground-thet is, first that rubber culture
in Mexico IL yet purely In the expert
mental stage, and no reliable statistics or
information can be given concerning its
probability OF success. Promises Of d,vl-
dends by companies who propose 10 engage
IN the rubber growing business are purely
speculative and theoretical Other Ameri-
can agricultural companies which propose
10 raise various tropical products may or
may not be successful Some are success
ful. but they are comparatively few 1t IS
safe TO advise any person not to invest in
any enterprise in Mexico without first visit
ing the country personally and thoroughly
investigating the proposition and the local
conditions. Persons who have not suth-
cient capital TO do this had better not invest
here. A small investment may be made by
a school teacher or minister or laboring
man In the United States in a foreign en-
terprise bllndly, may be we'll made, but
I'm nine cases out of ten the money could
be Invested to better advantage in the
United States.
Another erroneous idea, which seems TO
be quite common among Americans resi-
dent in the United States IS that Mexico
IS Il good place for persons OF small means
10 come TO to engage in agricultural pur-
suits. In most cases u is nut AS III the
case OF Investments on a small scale in
enterprises IN Mexico, no person should de-
eide to come here to live and engage in
business without first personally visiting
the country and thoroughly investigating
local conditions.
While not much can be said in favor
OF the tropical agricultural companies,
there are a great many legitimate agri-
cultural enterprises IN Mexico operated by
American capital-some very successfully
aud there Is doubtless a large field here for
conservative investment OF American capt
tai in this line.
Immense Blocks of Stock Sold.
II a Mexican planter who has been rails
Ing coffee heneqUen or bananas should &c
to Michigan and buy big peach orchard
or II he should go to Iowa and buy q
creamery or a dairy farm. and advertise
stock FOR sale with a guarantee OF large
dividends. he would be promptly pro.
nounced unworthy of confidence. But
more than half OF the American com
panies that have been advertising stock fol
sale IN Mexican plantations have done pre-
II. 81. NvNr lxusre rrr.I<