Mexico under Carranza

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COPYRIGHT, 1919, BY DOUBLEDAY, PAGE & COMPANY ALL RIGHTS RESERVED, INCLUDING THAT OF TRANSLATION INTO FOREIGN LANGUAGES, INCLUDING THE SCANDINAVIAN

DEDICATION

To the submerged eighty per cent, of the Mexican people—the peons—who, for four hundred years, have been the victims of an industrial slavery almost without parallel in history, and to those who have been their greatest friends and benefactors in that dark period, the heroic American pioneers who, at the risk, and oft-times at the cost, of their lives, have invaded the mountains, deserts, and jungles of Mexico to discover and develop the hitherto unknown natural resources of that country for the benefit of its workers and of civilized mankind.

Preface

PREFACE

How are the people of Mexico faring under Carranza? What is the character of the Carranza administration?

Are our relations with the present Mexican Government satisfactory or otherwise? How have Americans resident in Mexico been treated?

What are the facts about investments of Americans and other aliens and what relation have these investments borne to the country's economic welfare?

How have the Carrancistas treated these investments?

What is the underlying cause of the woes that have beset the Mexican people since they began experimenting with self-government nearly a century ago?

Is there a remedy for these evils—any hope for the future? In the following pages an attempt has been made, after earnest and prolonged investigation, to answer these questions fully, frankly, without passion and without prejudice.

Thomas Edward Gibbon.

Los Angeles, Cal.,

January, 1919.

Contents

CONTENTS

page

Preface | vii

Chapter 1

MEXICO UNDER CARRANZA

CHAPTER I

How the People of Mexico Have Fared Under the Carranza Régime

CARRANZA'S régime was recognized by the United States October 19, 1915, as the de facto, and nearly three years later as the de jure, government of Mexico. That is to say, this nation on the former date gave notice to all the world that, waiving consideration of its legal status, the administration set up by Carranza was in fact the government of Mexico, having the power and the inclination to perform all the functions of a government in relation to its own people and to fulfil all international obligations. Recognition as the de jure government was nothing less than an official notification to the family of nations that Carranza's administration was legally constituted and that it possessed both the lawful power and the inclination to discharge its obligations toward its own people and all the rest of the world.

Having been the recognized authority for about four years the Carranza Administration may be deemed to have had time to demonstrate its fitness to govern. While Mexico has never been free from revolutionary disturbances during this period, and not all the national territory has acknowledged Carranza's authority, a survey of present conditions should give a fair idea of the character and capacity of the Carrancistas and of what may be expected of them in the future.

The Mexican people being more vitally concerned than any one else their case should be considered first. To characterize their condition in a sentence, their existence for the last four years has been an unbroken crescendo of accumulating woes. Carranza and his adherents have destroyed the material prosperity of the country; have robbed the people to whom that prosperity was due of hundreds of millions of dollars; have reduced hundreds of thousands of their countrymen, once happy and contented workers in great industrial enterprises, to starvation; have dragged Mexico down to a depth of degradation and misery without a parallel even in the gloomy history of that unhappy country.

The Carrancistas' superlative power for evil is easily explained. Previous to the Diaz era the Mexican people were chiefly engaged in farming and stock raising, only to a limited extent in mining, and hardly at all in manufacturing industries. The looting and confiscation, always a conspicuous feature of revolutionary activities, therefore, affected but little the daily life of the common people because they produced all the food they needed; and the population being very much less than it now is, starvation, or even hunger, did not often result from these frequent disturbances.

The outstanding achievement of Diaz in the thirty-four years that he guided the destinies of the nation was a tremendous development of public service works, such as railroads, street railways, telephone and telegraph systems, gas works and manufacturing industries of various kinds, mining and smelting. The result was a marked change in the economic life of the country. Under the stimulus of ample employment and wages very much higher than ever before known, the population quite doubled during the Diaz period, much of the increase being concentrated in the cities which had become the centres of industry. Instead of the great majority of the population raising its own food, therefore, hundreds of thousands of laborers were engaged in activities that produced no food at all for themselves and their families. When the Carrancistas destroyed the nation's public service and industrial enterprises this great working population was reduced to idleness; and being without resources was forced to submit to starvation or seek a precarious livelihood by joining the predatory bands that scour the country.

No one ever will know how many thousands of helpless women and children, to say nothing of able-bodied men, actually starved to death as a result of this almost complete stoppage of industrial activity. A prominent Mexican has estimated that not fewer than ten thousand persons have starved to death in Mexico City alone in the last four years. This is merely an informed opinion, to be sure; but beyond any question many thousands of these poor people have died of hunger while yet other thousands of lives have been lost as the result of privations and unsanitary conditions directly attributable to the lawless conduct of the dominant party. The epidemic of Spanish influenza swept through the country last fall, taking frightful toll because after enduring penury and want for so long the people lacked the stamina to resist disease.

Not satisfied with merely taking the bread out of the mouths of so many of their countrymen, the Carrancistas with a refinement of cruelty next deprived them even of the meagre dole of charity. No doubt many readers will recall the fact that in the latter part of 1915 the American Red Cross, which has earned the admiration of the world by its noble work in stricken Europe, which had been ministering to the needs of thousands of destitute and starving Mexicans, was expelled from the country by Carranza. This astounding deed and its consequences are described in the Red Cross Magazine, the official journal of the organization, for November 15, 1915, from which the following extracts have been taken

"At the request of General Carranza, and with the advice of the American Department of State, which was consistent with the request, the American Red Cross discontinued its relief activities in both southern and northern Mexico October 8, and Special Agents Charles J. O'Connor and J. C. Weller, whose enterprise, hardihood, and efficiency in relieving the starving populace had brought them much praise, have been withdrawn. As it developed, the State Department advice in advocacy of the withdrawal of the Red Cross representatives presaged the formal recognition of the Carranza organization. Announcement of the decision to recognize General Carranza and his forces was made October 9th. [The recognition as the de facto government of Mexico is referred to.]

"At this time, just as was the case the month previous, many deaths were occurring daily from starvation and the country as a whole was in a pitiable plight, economically and industrially. It has been devastated from end to end and so impoverished and demoralized that under the most favourable conditions it would be possible only slightly to alleviate the widely extended suffering which will be forced upon the Mexican people dur the ensuing winter. General Carranza's assurance that the situation would be cared for, therefore, has not wholly dispelled the feeling of sincere regret on the part of the American Red Cross over relinquishing its part of the relief work.

"It is hard, for instance, to leave a locality where many thousands of families, mothers and babes predominating, have been absolutely dependent for sustenance upon small portions of nourishing vegetable soup which we had daily distributed. Half-famished mothers with skeleton babies at their breasts have besought the Red Cross agents, in the name of all that is holy, to do something for their little ones — to save them if they could not save the mothers — and there have been many formerly well-to-do persons, not of the peon class, who have been among the pitiful petitioners for Red Cross aid.

"In Mexico City alone, under the very competent direction of Mr. O'Connor, a chain of free soup stations was operated for over a month and 26,000 families were supplied daily at the height of the distribution. Whole families were rescued from the necessity of trying to stomach the putrefied flesh of domestic animals found in the streets of Mexico City. Peon families could desist for a short time from picking up morsels of waste food from the rubbish heaps. They could leave off the réle of human carrion crows amid the offal of the slaughter-houses.

"Thousands of families in Monterey, Monclova and Saltillo were given a little respite from a diet of prickly or cactus pears, mesquite beans and other wild products of northern Mexico prairies, where Special Agent Weller, like Mr. O'Connor, endeared himself to the civilians and took many personal risks in their behalf."

In a report from a Red Cross Agent on file in the State Department at Washington appears the following:

"In conclusion, I only regret that some of our higher-up government officials could not have been with me to see the brand of individuals that are now in control of the situation in Mexico. They do not represent any of the good element in Mexico. They are lawless and have no more idea of patriotism than a yellow dog. They are mentally incapable of handling the situation. General Elisondo, in command at Monclova and also in command of a district larger than Massachusetts, is a boy of twenty-four years, uneducated and absolutely irresponsible. General Zuazua, formerly classed as a saloon bum around Eagle Pass, a Lieutenant-Colonel in command of a territory as big as Rhode Island, was sent to the Mexican army some fifteen years ago, having been arrested for stealing horses and cattle. These are not the exceptions but the rule of the character of the men who now dominate one of the largest states in northern Mexico. "This fact is largely due to Carranza, who has allowed them to do as they please and they have no respect whatever for him, each man ruling his district as he sees fit. "I do not find any difference between the Carranza faction and the Villa faction, with the exception that Pancho Villa seems to have a better control of his men.

"Having been in personal contact with both factions, I believe that it would be a crime to turn loose this some 200,000 bandits, thieves, and scapegoats on the country. They are rotten with disease and have been divorced from all ideas of ever working again."

It is well to bear in mind that tie authors of tie foregoing statements lave no financial interest in Mexico. They were made by tie representatives of tie Red Cross, whom Carranza banished because he did not wish the world to know through them the desperate condition to which he had brought his country.

In a speech made in the Senate of the United States June 2, 1916, Senator Fall, of New Mexico, stated that records on file in the Department of State showed that, at the very time when our Red Cross was feeding 26,000 families a day in Mexico City, the capital of the nation,

"Venustiano Carranza himself, or through adherents, shipped 37,000 tons of food stuffs through the port of Vera Cruz alone and got the golden dollars for it and put them in his pocket.

"I myself saw three carloads of potatoes, the last shipped out from the Guerrero District by Mexican officials and sold at El Paso, Texas, to put gold into their own pockets, while the people who raised these potatoes were living on roots or dying of starvation. If our Government does not know these conditions, it is because its officials will shut their eyes and their ears."

This statement has never been challenged and it is so much of a part with other things that have been done by the Carranza party as to be entirely worthy of belief. That the terrible condition of the masses of Mexicans depicted in the reports of Red Cross officials, quoted, still continues is shown by an article published in the New York Sun January 29, 1918. The article is introduced by a statement from the Editor of the Sun which says:

"In view of the many conflicting reports that have come out of Mexico since the United States declared war on Germany, the Sun sent a trained investigator into Mexico from Vera Cruz. His instructions were to be impartial and unbiased in his views and to depict the situation exactly as it is.

In the article in question the investigator of the Sun says:

"Mexico City is full of starving Indians, insufficiently clad and with no shelter to protect themselves at night to escape the icy winds that sweep down from the encircled snow-clad mountains when the sun goes down. They huddle together for warmth on recessed doorsteps, passing the bitter night in a physical state that must somewhat ap that of the hibernating bear, and in the morning they crawl into a sunny place and slowly thaw into life again, when they get up and resume their pathetic quest for food. They mutely appeal with outstretched hands and wistful eyes to the passer-by, and there are legions of them."

These conditions exist at the present time. A gentleman who had been in business in Mexico for some ten years prior to the beginning of the Carranza régime, who had travelled much throughout the country, returned there late last fall, to ascertain what present conditions were. He visited Mexico City and other points. I know this gentleman well, and can, therefore, vouch for his high character, and reliability. This is the substance of what he told me:

"I spent several weeks in October and November, 1918, in and around Mexico City, a locality I have known intimately for years. One evening I took a walk for the purpose of seeing what conditions were among the poor. I am sure that on that walk I saw at least three thousand miserable persons crouching in recessed doorways and other places that offered some slight protection from the wind. They were lying as close together as they could get, often with a dog in the centre of the pile to contribute the warmth of its body. They were men, women, and children. Most of the latter were naked, though a few had a ragged, dirty remnant of a coat or pair of trousers or, perhaps, merely a piece of dirty cloth. The older persons were dressed in rags. In all the years I have known Mexico City I had never before seen such a sight.

"While in the city I met a Mexican gentleman who owned a large hacienda in the state of Guanajuato. He told me that in order to provide some employment for the people on his estate to keep them from starving he decided to have an improvement made which would keep a couple of hundred men, which was all the unemployed there were on the place, busy for some time. The news spread quickly that work was to be had on the hacienda, which was promptly stormed by an army of idle and hungry men. Not fewer than seven thousand men applied for work on a job that was only meant as a makeshift to provide bread for two hundred. Some of these applicants were so reduced by privation and want that they died on the ranch, having used their last remaining strength to reach what they hoped was a chance to work."

It should be borne in mind that these wretched creatures represent the "people" of Mexico; the peon population whose support the Carranza leaders sought and secured by promises to make conditions of life easier for them than they ever had been under former governments. Some time ago newspapers in Mexico City announced that a small revolution had been started by the farmers in the State of. Michoacan because the commanders of Carranza troops had confis the food the farmers had raised, and had sold it. This very thing has been done in numerous instances throughout Mexico by the representatives of the Carranza Government as was stated by Mr. Cabrera in a newspaper article quoted in another chapter.

It would be surprising if the members of the Carranza Government, who have shown such dishonesty in their dealing with private possessions, should refrain from exhibiting the same spirit in dealing with public property. That they have observed no such restraint is shown by many instances of the dishonesty of public officials that have come to light.

On October 25, 1917, an editorial appeared in El Universal, the leading daily of Mexico City, which said in part:

"The transcendental depth of the bad railway communications with the consequent uncertainty of transport of passengers and merchandise continues to be one of the gravest problems to settle. Every little while assaults and blowings up of freight trains occur. The scarcity of rolling stock continues and more than anything else, the immoral exploitation of the railways by employees and military chiefs continues. The most important route which connects our first port with the capital of the republic, the route by which the greater part of our exportation leaves and through which almost all imported products from Europe come, is the least safe right now. By what perfected telepathy, or by what arts of marvellous intuition, do bombs explode exactly under the trains filled with the richest and most abundant of high-priced goods?

"These distressing reflections come up again to our mind when we remember the strange circumstances of the destruction of the freight train blown up a short time ago near Atoyac. The locomotive was drawing a car of paper belonging to this newspaper; another, the property of the National Paper Company; a car full of condensed milk; others with valuable cloths, etc. It appears there was not a single death in the derailment and from data received up to now, it is known that the rebels got little or no result from their attack. We know very little about the fortune of the freight which came in this train consigned to various business houses of this capital. As to our 1 1 5 rolls of paper, we have been informed that they were transported almost intact to the city of Vera Cruz by a secondary military authority and sold there to merchants without conscience who bought them, knowing the crime they were committing. We have proof, for our special representative was present at the investigation ordered by the Governor of Vera Cruz, that the responsibility is all upon the military authorities of the port.

"If the public peace requires it, it is well that individual guarantees be suspended in all the country; but, if the military authorities are going to have full power, what will proprietors, merchants, industrial people do when their goods and sup are improperly sequestered? May a Major Chief of the Line, or a General Chief of Garrison, dispose of private property without the owner having the right to protest?"

It will be noted that the editor who thus complains of having been robbed by the military authorities at Vera Cruz of his 1 15 rolls of paper does not say that he recovered his property or that any one was punished for the theft.

I have a friend who, for many years before the Carranza party came into power, was engaged in a business enterprise in the City of Mexico for which he imported supplies in carload lots through Vera Cruz. The business which he conducted was one of considerable advantage to the city and to the Mexican people.

Some time ago I met this friend in this country where he is now making his home. He said, and his high character guarantees the truthfulness of his statement, that shortly after the Carranza party secured control of the line of railway between Vera Cruz and the City of Mexico, he was required by the management to pay $300 per car, in addition to the regular freight rate, before he could secure delivery of his freight. After his cars started from Vera Cruz they would disappear somewhere on the line and, before he could get them delivered, he would be forced to pay the bribe demanded by the operating force of the railway. The amount of bribe money per car increased until at last he was met with the demand for $1,600 in order to secure" delivery of a car of freight. This he paid and then closed up his business and left the country, as he found it impossible to continue under such exactions.

El Excelsior, a daily newspaper published in Mexico City, in its issue of November 28, 1917, contained the following:

"Under the pretext of modifying the law of organization of departments of government, Deputy Reynoso began yesterday in the Chamber of Deputies a sensational debate, brilliantly ended by Sanchez Ponton, on the economic management of the railways. According to these and other orators, the railway officials have made their hay to the damage of the public, of the nation, and of the credit which we used to have in foreign parts. The orator referred to the deal for the sale of waste material made a short time ago and says that he can prove that two-thirds of the iron and steel sold was new and perfect. Furthermore, he reads a statement of from January to June, 1917, according to which there were 238 railway accidents due to negligence of the employees and the neglect of old track repairment by Pescador, Director General of Railways.

"The Secretary read documents to prove that baggage and other railway matters are controlled by a brother-in-law of Pescador from which damage and delays of passengers result.

"Sanchez Ponton read the contract made between Pescador and the Senator General Nafaratte for the sale of so-called waste material at $10 per ton and observes that the business was so good for the purchasers that the same Senator Nafarette ceded his rights for four pesos per ton and that the two gentlemen who figured as accomplices in the operation did the same thing.

"He continues making charges against certain other people on account of divers contracts as bad as that just cited and especially refers to one in which 70 pesos per ton was paid for steel belonging to the national railways"

El Universal of the same date, in its account of the proceedings in the Mexican Congress, contains the following:

"Among other charges by Deputy Reynoso made against Pescador, the worst is relating to a sale of a great lot of so-called old iron at $10 per ton when he states the fact is that three-fourths of this iron was new iron and that in it were 180 wheels and axles from Monterey."

"Deputy Ponton read a copy of a contract made between Senator General Nafaratte and Messrs. Salazar and Maples, by means of which the first of said gentlemen transferred his rights to the second in a purchase made from the constitutionalist railways of 20,000 tons of old iron at $10 per ton. Nafaratte charged 4 pesos for each ton as a profit in the transfer. Later Ponton read a copy of the Certificate of Incorporation of the company organized by a brother of the railway auditor, the first assistant to the director and the treasurer of the company, a company dedicated, as the confession in its circulars states, for the purpose of furnishing freight cars to those who need them.

"He also cited a deal for the sale of rails at 70 pesos per ton when they cannot at present be purchased at 140 pesos and said that payments were not received in money but in very bad and very costly ties.

"He also states that when metallic money began to circulate again, the great majority of railway employees were paid a determined amount in notes for a stated period; certain persons bought these notes at a discount of 25, 50, 60, and even 75 per cent, and when almost all of the notes had been cornered, the order was given to pay them, from which an enormous amount of money was made."

We thus see that General Nafaratte, one of the most prominent members of the Carranza administration, in a deal made for government property, secured a profit amounting to 4 pesos per ton on 20,000 tons of iron by merely permitting his name to be used, and that it was freely charged in the Mexican Congress that the poor employees of the national railways had been speculated upon to a shameful extent in the payment of their wages by the government.

It is commonly said in Mexico that the Villa and Zapata forces operating against Carranza secure their ammunition, and sometimes their arms, by purchase from the commanders of the Carranza troops. On November 2, 1917, El Universal contained the following from a correspondent at Puebla under date of October 31:

"The Chief of the military operations in the state has decided to open proceedings against the chiefs of forces in charge of the garrisons near the zone not yet controlled by the government, who are accused of the very grave crime of being in connivance with the enemy to whom they furnish war supplies in exchange for articles easily sold which the Zapatistas introduce to the regions in which they operate.

"The accusations made to the superior military authorities were made by members of the Mexican brigade 'Hidalgo' which was under the orders of General Segura and which now is converted into a regiment. Officers and troops of said corps informed General Villaseñor that Col. Patrinos and Lieutenant Colonel Torres, chiefs of forces operating in the Atlixco District, had established a criminal trade with the Zapatistas marauding around said city; the trade consisting in the interchange of hides and copper, products of Zapata raids, for ammunition and other war supplies which the supreme government puts into the hands of the army for the defense of our institutions."

In its issue of June 5, 1918, El Excelsior published the following news item:

"In round numbers the amount stolen from the Federal Treasury by paymasters now consigned to the authorities is close to 600,000 pesos. There are 37 cases before the District Court of the Capital. The amount for which the paymasters on trial appear to be responsible is the sum before mentioned, or, to be absolutely exact, 585,000 pesos. In addition there are other cases before the Circuit Court, the Supreme Court of Justice and the District Courts of the states. From the data at hand, a moderate estimate of the sum involved in these cases would be 400,000 pesos. However, we lack the exact data to give a detailed account of these cases. "With regard to the cases pending before the four District Courts of Mexico, two proprietory and two supplementary, we have the following information."

The paper then proceeds to give the names of the thirty-seven defaulting army paymasters referred to with the amount which each is accused of having stolen. The list is too long for publication here, but it may be stated that the amounts run from 500 pesos to 180,000 pesos.

The foregoing instances of grafting are merely illustrative of the scope and extent of the public robbery perpetrated by the members of the Carranza government.

The United States Bureau of Statistics of the Department of Commerce and Labor shows the total revenue and expenditures of the National Government of Mexico for the fiscal year 1909- , the last year of the Diaz régime, in United States dollars as follows:

Revenue | $52,952,000

Expenditures | |47,324,000

Out of this payment was made of the interest on the national debt and on railroad bonds; the national railroads were kept in excellent physical condition, and all obligations of the government were met.

It is also of interest to note that during the last fifteen years of the Diaz régime, there was a surplus of national revenue amounting to $73,500,999, of which $36,500,000 was devoted to public works, the remainder of $37,000; being used to form a part of the available cash holdings of the National Treasury which existed when Diaz went out of power. The same statistical authority shows the national revenues and expenditures of the Carranza government during the fiscal year 1914-1915 to have been (in U. S. dollars):

Revenue | $72,687,000

Expenditures | |75,798,000

It may be well to call attention specifically right here to the fact, although it is made plain in these pages, that this increase of twenty million dollars in the revenues as compared with the Diaz régime does not indicate a healthy growth in commerce and industry, but quite the reverse. The national revenues are raised chiefly by confiscation rather than by a just tax on prosperous business. Furthermore, it must be noted that the national expenditures do not include a cent for the payment of interest or principal of the national debt. They could not have included any considerable sum for the maintenance of the railways for the reason that since the Carranza administration began operating them there has been a constant deterioration of rolling stock and permanent way until to-day there are barely enough engines and cars remaining in use to operate intermittently the most important two lines. Large mining and commercial interests are compelled to furnish their own rolling stock in order to secure service.