the road primarily to be constructed, 50 miles of the Vera Cruz and 120 of the Mexico end are completed. The intermediate distance of 130 miles is incomplete. Five miles have been completed in the past year of very unfavorable surface for railroad. I give these particulars because the remark has been made to me by officers now engaged in the construction of this road, that the company now owning it would dispose of it to an American company on advantageous terms. I am creditably informed that the finished portions are jointly clearing to the company over $700 per day, and have been doing so for the past year. This country holds no diplomatic intercourse or relations whatever with England, and hence the insecurity which the company feel surrounds them, induces them to dispose of what, under other and better circumstances, would be considered a capital investment. It is therefore presumed that an American company would be more profitable both to themselves and the Mexican nation than as the contract now stands. These facts advertised in the United States may induce capitalists to investigate and consult their own interests in this enterprise; and should the road be transferred to American capital, and some abuses of our mahogany merchants be corrected, doubtless the commercial and shipping interests, by said acts, will become much improved in the United States. There are other railroad enterprises in and through Mexico which should receive the commendatory indorsement at least of the American Government, and probably of American capital, pointing in the same direction and to the same end as that to which allusion has just been made.

No company or parties, however, would be wise in any investments of Mexican enterprise or speculations without thorough and competent legal investigations, as the under-current of financial deceptions in Mexico is so strong and popular that few foreigners managing the schemes of public improvements are sharp-sighted enough to steer clear of destructive breakers. I believe a war vessel stationed close upon our southwestern coast, with occasional cruisings to the Gulf ports of Mexico, would contribute to our commerce by diverting a very suspicious trade into legitimate channels, and into heavier-tonnaged vessels not now owned by the shipping interests of this country, and by those larger vessels landed in the chief ports of the United States. Whereas now, Zona Libra, or free-belt district of country, whose headquarters are at Matamoras, now receives large consignments of what I think is intended to be consumed in the United States markets, and should go to New Orleans. There was at one shipment from this port $20,637 37 worth of coffee, cocoa, and Campeachy thread sent to Matamoras, nearly five times as much as was shipped to any port from Vera Cruz, of which I am aware, at one time, for the past year. This shipment occurred August 20th last, on board the schooner Zona Libra, which was but a month before purchased from American owners, and then called Annawan. The invoice was 527 sacks coffee, 10 sacks cocoa, and 3 bales Campeachy thread. The shipment was made from this port by J. Galainena & Co., very respectable merchants of Vera Cruz, and consigned or sold in Matamoras. My office was simply to authenticate a signature, which I did without further inquiry. I do not know that illegitimate traffic was exercised by any parties interested in said cargo, nor can I fully aver that a war vessel would be able to correct the transactions, even though it were a certainty that smuggling did prevail, for that transaction referred to was one between two Mexican ports, over which a vessel of war belong ing to the United States could exercise no legitimate control.

The shipping docket of this port presents one very serious obstacle

to the encouragement of maritime intercourse with Mexico, and that is the number of sailing crafts which leave it in ballast. The enterprise of this country should, with its natural productiveness in a multiplied diversity of ways, furnish ample freight to all out-going vessels; whereas the true condition is the reverse. Here, too, we fail to have control, although American example is a precept much preached about in Mexico. I can see no promising prospect of things being much better, because the laws, admitting them to be good enough, (which I am loth to do,) are so often viciously and treacherously administered, that enterprise is thoroughly intimidated and stultified. The rapacity of revolutionists levying contributions and extortions upon crops, farms, trades, capital, and stocks, confiscates all ambition and honesty of purpose in the acquisition of anything which may be subjected to their mendacity. It has nearly completed an exodus of all the foreign element of Mexican society, who could, even by heavy losses, leave the country.

We have, however, four lines of steamships, which, by the aid they receive from either their own governments or the Mexican, are doing a better business, so far as creating trade is concerned, than the sailing vessels. They succeed in obtaining more or less freight each way. But these could not make whole their yearly losses, if left without subsidized assistance. The American line is patronized by a subvention from Mexico, and receives no assistance from the home government whatever. There is no doubt in my mind but that Mexico has practically tested her own interests in thus patronizing foreign-built steamers, inasmuch as she had comparatively none of her own upon which to bestow her munificence. The governments of England and France have manifested wisdom in the support they render their maritime powers. Their industrial pursuits and manufactories go hand in hand with their marine; one branch being protected by such partial legislation that it consumes another. Our country produces most of the raw material which feed our manufactories. Hence their independence of the shipping interests as importing agents of foreign produce for their support. Yet the productions of the tropics, if consumed or manufactured in the United States, must of course be transported thence in ships, and hence to reduce import duties on such as cannot be produced within the limits of our Government, and to encourage vessels in doubtful lines of traffic, will evidently draw to our shores much that now, under other flags and in other bottoms than those of our own nationality, go to other and more distant ports. If we draw the trade from them we will, sooner or later, draw their tradesmen, their capital, and flags back to ships never owned but by American capitalists, who but for a better profit sailed under foreign colors. The family partiality should never be so exercised as to drive any of its well-meaning or even erring members from home. I hold that our Government should show its liberality largely to those branches of enterprises which redound so benignantly to its aggrandizement and prosperity; and thereby believe that the national obligations will the more easily and rapidly be met. Our high protection has already built up colossal capitals of wealth and influence. Some large fortunes, in the estimation of poor laborers who work them, are realized in even a single day by some of our highly protected and highly patronized manufacturing establishments. I am glad to see their success, as it is glory to American genius; but I do not like to see it at the expense of our crippled and enfeebled commerce, now dwindling into an almost fatal marasmus, and which has paid and is paying, both directly and more largely indirectly, so large a proportion of our national indebtedness. Then why not return the compliment?

If commerce contribute so bountifully to the delinquent wants of the Government, why should our noble and just Government be so tardy and coy in response recompense? Doubtless, if Congress will seek the profundity of this casket for a solution of the hidden mystery, touching the source and fountain of commercial success in the United States, it will be found. But evidently these crude views from Vera Cruz is but "carrying very inferior coals to Newcastle," where larger and finer ones are mined. It is said, however, in adage, that we should go from home to learn domestic secrets. Hence, perchance, I hear that the lobby for high protection in Washington during the last revision of the tariff was of prodigious proportions, a fact (if it is one) within itself sufficient to have made the bill too low rather than too high by all just and considerate legislators. The histories of lobbies are immensely uniform in their expressions; that a weak and languishing cause cannot afford a heavy and expensive lobby. Also, that a just and palpable series of facts intrusted to the integrity of what should be the best men in the nation require no lobby. And further, if a lobby advocate a just cause it is because a neglect has been perpetrated and popular feelings fear a further continuance.

These problems, justly solved, will do more for the acquisition of Spanish-American commerce than all else of which I can comprehend. Feeling that you want but an index, as it were, of facts as they impress me in this port, I submit them with renewed assurances of my most faithful consideration and esteem.

S. T. TROWBRIDGE.

No. 8.]

No. 204.

Mr. Stevens to Mr. Fish.

UNITED STATES LEGATION,

Montevideo, October 5, 1870. (Received November 3, 1870.) SIR: I have the honor to acknowledge the receipt, September 27, of the report from the Department of State in relation to the condition of the commercial relations between the United States and the Spanish American States, accompanied by an official circular giving me instruction, without "unnecessary delay," to communicate to the Department of State any suggestions which I may deem useful in aiding the President more "fully to comply with the request contained in the Senate resolution" for information on the subject specially considered in said report. Presuming that you desire the response to your request may reach your Department prior to the opening of the approaching session of Congress, in view of the uncertainty of the mails between this country and the United States, I improve the earliest opportunity, somewhat hastily, to prepare my communication in season to go in the next steamer which leaves Rio de Janeiro for New York.

I regard the resolution of the Senate, and your able and suggestive report, highly opportune. The exigencies of the commercial and maritime interests of the United States demand that a prompt exercise should be made of all the legitimate agencies of the Government, with the view to bring South America into closer relations with our country. The causes which have deprived the United States of their due propor tion of the trade of the Spanish American states are lucidly presented by you and need not be repeated in this connection. What I have to

state in respect to the commercial interests of the countries of the Rio de la Plata can be considered, with sufficient definiteness for all practical purposes, under two heads. What is there here to attract the commercial and maritime efforts of the citizens of the United States? What important step is immediately necessary in order that the United States may secure a larger proportion of the commerce of the Rio de la Plata countries?

In respect to the first inquiry, it would be just to say that the natural resources of these countries and the present aggregate of their productions and trade are too imperfectly understood in the United States. True, the unsettled civil and political condition of these countries for many years has greatly lessened the bulk of their productions and commerce, and these unfavorable influences are still operative. But in these regards there has been an obvious improvement, comparing decade with decade. It is fair to presume that a much better future is not distant for the increase of South American population, products, and commerce. The Rio de la Plata countries are beginning to feel the impulse of the railroad and the organized capital and industries which this powerful agency of modern civilization always creates in its path. Already in the Argentine Republic more than a thousand miles are in operation, or will soon be completed. Already Buenos Ayres has a population of 200,000, and is a city of rapidly growing importance as the commercial center of a vast and fertile territory. Uruguay has a soil and climate unsurpassed. Montevideo, so often the theater of political revolution, has made rapid progress within the past few years, and is to-day a city of large wealth and nearly 100,000 people. Its location, so near the mouth of this vast system of rivers, which drains a country capacious and productive enough to feed two hundred millions of people, is one of the best for commerce on the South American continent. Though still in the midst of a political convulsion, Uruguay has caught the railroad impulse from her Argentine neighbors. An important concession has just been made to a wealthy English company for the building of a railroad through nearly the entire length of the republic, striking the Uruguay River at the best point, which, when completed, cannot fail largely to increase the trade, wealth, and population of Montevideo. Unmistakable railroad logic, by its shorter lines, tends to bring the products and exchanges of the entire country of Uruguay, Southern Brazil, Paraguay, and the Argentine States of Entre Rios and Corrientes to Montevideo. The entire amount of the commerce of the Rio de la Plata and its tributaries is far from being inconsiderable at present. In 1869 the aggregate exports and imports were nearly $100,000,000 by the gold standard of the United States. The railroads already in operation and those building, the steamboat lines now engaged in the interior navigation, and others soon to be organized, necessarily must largely increase the business of Buenos Ayres, and make the commercial points of augmented importance to the maritime and commercial interests of foreign nations. England, France, Belgium, and Italy have evinced their watchful foresight by establishing their lines of steamships, placing the Rio de la Plata countries comparatively near Europe. These steamships arrive weekly at Montevideo and Buenos Ayres, laden with the fabrics of European industry, and depart as often, freighted with the products of these countries. These steamers afford the European merchants admirable mail accommodations, and prompt and regular delivery of freight. Thus the nations which operate these lines of steamers have secured the principal part of the trade of this portion of South America. These English, French, Belgian, and Italian

1

companies have now running to Montevideo about forty iron steamers, ranging in size from nine hundred to three thousand tons each. Thus European merchants and manufacturers reach these countries ten or fifteen days ahead of the manufacturers and merchants of the United States. Trade in these days will not wait. Ten days behind-hand is fatal. There has been made as decisive a revolution in trade by steam and iron, as in the methods of war. A few hours and days are everything. Celerity, promptness, and regularity are absolute masters of commercial opportunities and enterprises. Who better capable of appreciating these truths than the business men of the United States? But to win what legitimately belongs to us, Government must help.

Not a single American steamer plying to the Rio de la Plata. No mail accommodations worthy of the name. All persons here dealing, or attempting to deal with the United States, say the most reliable way they have of sending and receiving their letters is via Europe. The American monthly steamer from New York to Rio stops 1,030 miles short of Montevideo, and 1,160 miles short of Buenos Ayres. The Brazilian post office at Rio de Janeiro is a "dead box." Why should not the commercial center of Brazil be the southern limit to American trade in the opinion of the Rio officials? Yet why should Rio de Janeiro be made an exchange depot of the Rio de la Plata trade at the expense of the commercial interests of the United States? England, France, Belgium, and Italy have provided against this "obstruction" at Rio. The European steamers make through transit to Montevideo and Buenos Ayres; their pursers all mail agents and carriers of samples of European fabrics and machinery, and the European consuls serve as postmasters. My suggestion, then, is for Congress to immediately grant aid to estab lish direct steamship and mail connection with Montevideo and Buenos Ayres. Until the present contract with the New York and Rio company shall have expired, it may be expedient to subsidize a line to run from Buenos Ayres to Rio de Janeiro in connection with the New York line. As soon as the United States contract with the New York and Rio de Janeiro company shall have terminated, there should be a continuous line from the United States to Montevideo and Buenos Ayres. Experience and financial figures conclusively prove that with the latest improved steamboat machinery, swift steamers can be run the 6,200 miles from New York to Montevideo at less expense than a line of the same tonnage, driven by the machinery and with the models of 1860, can be run the 5,200 miles from New York to Rio de Janeiro. The extreme unwisdom of the Rio de Janeiro obstruction is therefore obvious. Shall the manufacturers, merchants, mechanics, and ship-owners of the United States be excluded from the markets of the Rio de la Plata? Or shall they at once be put in possession of the latest improved methods of transit?

JOHN L. STEVENS.

No. 21.]

No. 205.

Mr. A. T. A. Torbert to Mr Fish.

UNITED STATES LEGATION,

San Salvador, October 6, 1870. (Received November 14.) SIR: I have the honor to acknowledge the receipt of State Depart ment circular dated August 19, also copies of a report of the Depart ment to the President in answer to a resolution of the United States