The Washington herald., 1918-12-02
MEXICAN LINES
IN BAD SHAPE
Unpaid Interest on Rail
ways Notes Total
$4,000, 900.

For the first time since the United
States entered the war, the admins
tration frankly discussed the financial
strength Of Mexico. the condition of
her transport systems and the radical
measures apparently contemplated in
her plans for reconstruction.
The discussion is in the form of a
report by the Bureau of Foreign and
Domestic Commerce of the Depart
ment of Commerce designed to inform
American business pen Of the founda-
ton of economic Security as 1t now
exists in Mexico.
After pointing out that the past five
years have witnessed the doubling or
American imports from Mexico and
exports to her merchants, the report
takes up President CarranZa's annual
message and his statement that the
Government has been able to meet eX-
penditures from federal revenues. II
is pointed that the Mexican govern
ment has paid no interest on her huge
external debt since 1913; nor on the
stocks, bonds and notes OF the Ma
tional Railways seized in 1914, this un-
paid interest totaling about S5'po'Wl'
The report says, President Carranza
message appears to offer no relief In
this direction"
Deferred In Payment.
The report shows that the govern
ment is obscure in it's statement of
railway earnings and in this connec-
tion that the governments appro-
priation of some SIS, 900, 900 from the
old French-owned banks, while re-
garded as a loan with preferred OBJ
legations, is deferred in payment.
AS the report is drawn for the
purpose of guiding American mer-
chants in planning what part they
may desire to take in trade to or
from Mexico. considerable space is
devoted to a discussion of the rail-
way systems. The report states that
the majority of the Americans who
served as railway officials previous
to 1914 have been removed from
their positions and as a result of
this and the frequent fighting tracks
and roadbeds of the railways are in
a serious condition.
The railroad has lost much of its
rolling stock. although there are
some privately owned cars. The re-
port says: In order to avoid the
excessive delay and inadequacy Of
the official service private concerns
undertake to guarantee prompt de-
liveries, by charging IS per cent in
addition to the regular tariff. The
rs per cent represents the private
cOmpany's charge. while the tariff
rate is paid to the government foR
the privilege of the trains"
Awaits Better Time.
The report then says: THE Mex
lean Congress has authorized the
placing of three loans amounting
to about $50, 100000 for the purpose
of reorganizing the finances Of the
railroads, but the September mes
sage states that it has been con-
sidered advisable to await a more
fayora BILE time than the present for
the negotiating of the loan
A factor which of late has been
held I'D as a menace to the future
friendly relations of the United
States and Mexico is the contempla-
ton of the Mexican government to
mineral and all prop
critics from private to national
ownership. Much of this property
represents huge investments OF
American capital which has played
a major part in development OF
much of Mexico's resources.
In discussing the outlook FOR the
immediate future the report states:
"Mexicos plans for reconstruction
thus appear to include confined
determination:
l. To nationalize petroleum ana
other mineral propeTttes;
2. To utilize for government pur-
poses the net earnings of the Ma
tional Railways and other organiza-
tions.
3. To defer payment of the forced
loan of 54,0OO,OOO pesos from the
collapsing banks of issue.
Against these factors must pc
noted a prospective increase of con-
troll over the revolutionary elements
the splitting up of large holdings
into smaller tracts bringing about
cultivation by agriculturists and a
better condition of private credit"
In conclusion, the report states
that Trade Commissioner Edward F.
Feely is about to make a tour of
Mexico and furnish detailed reports
on the commercial situation in the
country