The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1911-03-21
CovERNMENT-OWNED RAlLFtOAD
nv Frederic j. Haskfn.

] he Il ub'1A
he came into office Vera Cruz was the
only city that could b reached psa
railroad; while now the WHORE ~
try is opened up by them. but 'ns
GROWING feature OF Mexican ~ l
history. to his mind, is the acquls,-
lion by the government of a cohtfoi-
ling interest in the merged lines no"
ioDerated under a system hio"h
the National Railways or MeNleo' -
decade ago the roads Wnlcn no" y
stitute his thoroughly Que
tam we're a lot of Independent lines
We harelv meeting ike charges,
some dangerously near recelsership
ond ALI in that condition OF nnahcAai
d~ecreptitude which makes them d
prey to Wall street interests. -
became fearful lest ,ne
late r Fl. Hartman, then in the nes-
aay IF his rule of the railroad en-
nire might descend upon Mexico, an
nex these lines to his holdings, ana
make Mexico tributary to MS empire.
II was felt that this would SO
hamper the government that steps
must be taken to prevent Il.
In taking these. steps the govern
ment played practically the sanle
cards that Hartman might nave pay
cd. and acquired the same comma
tion over the railroads that Hartman
would have acquired. The relation OF
the government to the National RaI-
WAYS Of Mexico is comparable 10 no
other railroad situation In the Worio.
It might be likened to the old sys-
tenn Of Joint public and private owner
hin Of canals and turnpikes in the
earlier days of the American states.
Tn those days a company would be
formed for the building or q canaI
or q turnpike. and the state Wouio
acquire three-fifths Of the stock, per-
hitting the highway to be operated
&C q purely commercial enterprise,
with a majority of the board Of di-
rectors acting in behalf OF the State.
The difference lies in the fact that
the controlling interest in the stock
of the railway system was acquired IN
the process Of reorganization, and
long after the roads were built.
ri, sorry Of Mexico's launching in
to railway finances begins with 1902.
Tn hat year the Mexican National
Railroad Company was re-organized
as the National Railroad Company Of
| Mexico, under the auspices OF the
the reorganization nas to convert the
line from narrow to standard guage,
although another aim was TO offset
the advantage Of the Mexican Central
by reason Of it's deepWater outlets at
lTampico. In carrying out this our
nose the Speyer interests began Quiet
ly to acquire control Of the Inter-
oceanic Railway Company. controlled
by English capital up to that time.
and operating a through line between
| Mexico City and Vera Cruz.
At this time President Diaz and his
minister of Finance We're persuaded
that heroic measures must be taken
or American interests would dominate
the Mexican railroad situation. So
they decided to play the financial
| game against the Speyers by buying a
controlling interest in the Inter
81 -I;.l, -fIn,- IA 1,,r;xr - g.
London market five million dollars
worth of four and a haif second de-
benture stock.
| At this juncture Minister Lirnantour
went to Europe. stopping in New.
York. Speyer, during an interview in
that city, offered to sell the Mexican
government forty-seVen and a half per
cent of the stock Of the National Rail
road Of Mexico for $4,000, O00, ac-
tcepting the debentures of the Inter
oceanic as half payment. In this+way,
owing to peculiar stock conditions, the
interest in the National, although
parting with its direct control of the
1nteroceanic. By his transaction the
lnteroceanic came under the control
Of the National, and as the National
vas controlled by the government. II
practically controlled both lines.
In 1906 the Mexican Central large
ly in the same territory as the Ma
tional. became 50 poverty-stricken
through competition that it seemed
as II a receivership offered the only
way out Of its difficulties, with ac-
QUESTION by American interests as
practically inevitable. Diaz and Linn
antour together Worked out 4 scheme
whereby the government could effect
a consolidation of the National and
the Central. with itself in possession
Of a controlling interest in the merged
lines, and the new company a Mexi-
can corporation in the fullest sense
| Of the word. They decided that they
could effect the consolidation and gain
the control without paying a single
copper of government money in tha
transaction. The one consideration
was the transferring Of the govern
ment holdings OF National stock To tho
new organization and the other that