The Mexican Year Book

lines in other countries are built not by the industrial interests to be served, but by the railroads, and often on their initiative.

Another unfortunate mistake, which has tended to retard internal development, was the maintenance of high freight rates based upon the "what-the-traffic-will-bear" theory. The Mexican Railway has been the most conspicuous offender in this respect; but no line has been free from the practice. This has tended to place emphasis upon mining products and other forms of traffic which could stand the high rates and yet yield a profit; but it ignored the less important business, capable of great development, which was based upon the normal activity of the communities served by the railroads. There is something wrong about a practice which allows a railroad to be underbid on low grade traffic along its own route and by an Indian and his donkey; and yet we are told that "even such cheap and heavy goods as coarse terra-cotta jars are still carried by men from the valley of Toluca to the City of Mexico, along the highway which, for some part of the distance, runs parallel with the Mexican National Railway." This sentence was written a quarter of a century ago, but the condition which it reflects is much less remote.

Much has been made of the argument that the railroad is a pacifying agent, and that with its introduction throughout Mexico the country would be ensured a stable government and a high standard of public order. In a book which appeared as recently as 1914 we find the statement, so frequently seen in earlier works on Mexico, namely:

"Railway extensions have greatly diminished the chances of successful revolution. In the old days it took so long to travel from the capital to any of the big provincial centers that revolution might be brought to a successful issue before any considerable body of government troops could arrive. All this is changed now, as with the aid of railways, telegraphs, and telephones, troops can be concentrated at any place by special train at a few hours' notice. With such a strong government as Mexico at present possesses, there is consequently little chance of a revolution succeeding, even temporarily." This was written, of course, before the fall of Diaz, and allowed to reappear in a revised edition which would be the cause of mirth to one Francisco Villa, if it should ever be brought to his attention. As an inducement to foreign investment, this sort of statement was effective. As an argument it was a good one; until it became apparent that employment given by the railroads and by the other foreign enterprises which have been established had helped to create that long-sought-for middle class to which may be attributed the credit for overthrowing Diaz and his successors in a blind attempt to attain social justice.

It is not the purpose of the foregoing pages to deny that from the standpoint of national wealth and welfare the result of the introduction of railroads into Mexico has been beneficial to the country and to its people. The foundation work has been done, and with the development of some additional extensions and many branches, Mexico's railroad system can do its part in the reconstruction period that now seems to be approaching.

Those who are fond of appearing as sponsors for backward nations frequently resort to the charge that many of the evils. complained of are the result of exploitation by foreign capitalists and their agents. By very few writers, however, has this charge been made against the owners of Mexican railroads. Money has been made in Mexico, as elsewhere, by successful promoters whose profits came from construction-company contracts; but much money has also been sunk in unsuccessful projects, and Mexico's greatest railroad, the Mexican Central, was constructed without the intervention of a construction company. Investors in railroad bonds had no grounds for complaint until after the Diaz régime. Shareholders are on a speculative basis, their hope being that Mexico will some time become stabilized and that they may then share in the prosperity toward which they have already contributed. Their hope, however, is of the sort that is long deferred; for the Madero revolution came just at the time when it appeared that greater returns might soon be expected. From the investment standpoint, therefore, Mexican railroads have been a disappointment; while to the "speculative investor" they offer an inducement which, in view of the present general demand for capital, is as strong as the belief in Mexico's ability to reestablish herself among the respected nations of the world.