concerning the legality of the privileges of the local banks already in operation and those which it was purposed to establish." The monopolistic features of the charter were relinquished, in exchange for definite privileges, the chief of which was the extension of fifty years in the life of the charter.

Of the seven banks in operation at that time, five subscribed agreements to surrender the rights conferred on them by their earlier charters, and to accept the new law. These banks were the Banco Minero of Chihuahua, the Banco Yucateco, the Banco Mercantil of Yucatán, the Banco Comercial of Chihuahua, and the Banco de Durango.

The general banking law was passed on March 13, 1897. While it followed the main lines of the law of June 3, 1896, it was, of course, more specific. In the matter of franchises the following points deserve attention. Grantees may be either individuals or corporations; "but such franchises may only be exercised by corporations duly organized according to the laws of the Republic." Such corporations shall comply with the following requirements, among others: (1) Capital stock of not less than 1,000,000 pesos; (2) Capital stock to be fully subscribed, and at least fifty per cent to be paid up in cash; (3) Ten per cent of the net profits to be set apart annually to form a reserve until the amount reaches at least one-third of the capital stock. The life of the charters was limited to thirty years from the date of the law for banks of issue, and to fifty years for mortgage banks and banks of promotion. (Bancos refaccionarios.)

It was expressly stipulated that "franchises shall have no other character than a mere authorization to establish and operate an institution of credit in accordance with the laws which may be in force on the subject."

The system here established has been known in Mexico by the contradictory term "monopolio plural," because of the fact that all banks in order to operate were required to hold franchises from the federal government, but such franchises might be granted for the operation of several banks. Such was the letter of the law; as a matter of fact, Limantour frowned upon attempts to increase the number of banks of issue in any state.

The advantages of the system were two-fold:

(1) Each state bank would thus be better qualified to pass upon the reliability of local clients;

(2) The failure of one local bank would not necessarily bring about the failure of other local institutions.

On the other hand it has been urged, not without reason, that the system created a species of banking "cacequismo" by which a small group of men disposed at will of the nation's credit facilities; secondly, that it tended to produce a lack of harmony in the general banking policy of the country. These facts no doubt contributed to the amortization of a large part of the capital of

these local banks and rendered necessary the law of June 19, 1908, which, in a measure, remedied this abuse.

The constitution of 1917 included among state monopolies that of the "issue of bills by a single banking institution to be controlled by the federal government." Thus far this power has not been exercised.

Conclusions: The history of concessions in Mexico shows that the grant of these privileges was subjected to increasingly rigid regulation, and its exercise to increasingly exacting compliance. The thirty years of the Diaz administration present a record of consistent progress in formulating regulations and in making them effective.

Three charges have been leveled at the system. In the first place, it has been said that the concessions were monopolistic. If we except the early railroad charters, we find only one concession in recent years which really constitutes a monopoly. This was the concession granted to the Compañía Mexicana de Dinamita y Explosivos. It is but fair to say that the contract was drafted on the theory of national defense. In the matter of land grants, the acquisition of vast areas, in some cases exceeding ten million acres, is difficult to explain and justify.

The second charge is that of peddling and favoritism. The evidence on this point is necessarily deficient and elusive. That abuses were committed appears well-established. No less an authority than Minister Limantour in his report on the need of more stringent regulation in the matter of franchise-granting said: "For reasons into which we need not enter here, the Government, has often been forced to grant franchises to individuals or corporations that proved not to have the necessary cash and credit facilities to carry them into effect. The concessionaire who goes from door to door offering bankers and business men the franchise that has just been granted him is a source of discredit to the business itself, to other undertakings which might in some way be connected with it, and in not a few cases to the government itself." This was, however, the exception, not the rule. The correlative charge of favoritism is more easily proved. An examination of the list of grantees during the Diaz and succeeding administrations will convince any one familiar with the personnel who had either direct or indirect connection with governmental circles that the grants were given largely to persons friendly to the government, and in not a few instances to a small inside coterie.

Lastly, one word is necessary as to the system itself. There is no doubt that the basic feature of a concession-special privilege is abhorrent to the true democratic doctrine of equal rights and equal opportunities for all. This charge holds good, however, only in a very limited sense to enabling acts, which as we have seen, covered by the end of the Diaz administration practically

every subject. Furthermore, the state as supreme guardian of the interests of all the community has only two courses open to it: (1) A policy of private initiative, subject to the safeguards which the state deems necessary in the execution of the trust; (2) A policy of state socialism. Mexico, in common with other Latin-American countries, and with Anglo-Saxon communities as well, followed the former course down to the enactment of the 1917 constitution. Nor can there be any question as to the success which has resulted wherever there has been strict regulation in the granting of concessions. Indeed, the astounding economic development of Mexico in the two decades between 1890 and 1910 was due principally to the statesmanlike policy of encouraging foreign capital adopted by President Diaz and ably seconded by his Minister of Finance Limantour. This foreign capital, wisely regulated, established and conducted in Mexico vast industrial enterprises mining, manufacturing, banking, transportation and public and quasi-public utilities of all kinds. It brought in its train not alone material benefits but blessings of a moral order no whit less important. It improved the standard of living; it furnished employment; it showed by force of example the advantages of thrift, industry and enterprise.

The 1917 constitution marks a radical departure from this policy. By its terms only Mexicans, individual or corporate, and foreign individuals who waive their rights to diplomatic protection may secure concessions. Whether the development of Mexico's latent resources under the new system will both keep pace with the unquestioned material progress registered under the other system, and also avoid the minor evils which the former system caused, seems to be at least doubtful. It is certainly a fact that thus far Mexicans have been loath to venture their capital in large operations involving the development of resources. An eminent Mexican economist says on this point: "Our capitalists, lacking the spirit of enterprise, have taken little or no part in the industrial development of the resources of Mexico. They have preferred to invest their savings in mortgages." It is not to be doubted that Mexico has not reached yet the stage of economic progress to justify the severe limitations and even hostility to foreign capital which the 1917 constitution contains.

AGRICULTURE

"Nature has endowed Mexico," says one writer, "with almost unlimited agricultural possibilities. Her resources include extensive and fertile irrigable lands, large areas covered with valuable forests of both hard and soft woods, climatic conditions that permit the raising of a wide variety of vegetable products, and regions adapted to nearly every kind of temperate and tropical fruit." Cereals common to more northern lands are grown on the high plateau of central Mexico. Cotton and tobacco are produced from Lower California to Yucatán. Almost all fruits and vegetables which flourish in the United States are equally well adapted to the Southern Republic. In addition there are numerous products, some of which are among the most valuable of Mexican exports, whose very names are unfamiliar to the average citizen of North America.

Among these products peculiar to Mexican agriculture may be listed henequen, from which comes the binder twine used in Dakota and Kansas wheat fields; chicle, the basic element of chewing gum; guayule, a rubber extracted from one of the semidesert shrubs; pochote, a vegetable silk; candelilla, a vegetable wax; ixtle, or Tampico fiber, as it is known to commerce; liquors, such as tequila and pulque, derived from the maguey plant and used almost wholly for domestic consumption; coffee, cocoa, sarsaparilla, vanilla, indigo, cochineal, and a score of other tropic or semi-tropic products widely used, but rarely grown, in the United States.

Unfortunately, no adequate data of Mexican crop production have ever been assembled. Two distinct types of farming prevail: the one for individual consumption; the other for commercial marketing. To obtain accurate statistics in the case of the first class is impossible. Even for the second class the figures are notoriously inaccurate and fragmentary. The latest published crop reports are for 1918; but that year, owing to drought, revolutionary conditions, and various other factors, the yield of most products was abnormally low. The present administration is wisely undertaking a new land census, which from almost every angle promises to be the most comprehensive and accurate survey of agricultural conditions ever made in the republic.

For convenience's sake Mexican land products may be divided into five groups, namely, agricultural products, livestock, fruits, vegetables, and woods. In the year 1903, in which the crop yield was normal, these had the following officially estimated values:

The great staples of Mexican agricultural products are corn, sugar cane, henequen, wheat, maguey liquors, beans of various kinds, cotton, coffee, barley, peppers, tobacco, peas, rice, and cocoa. In addition, there are at least fifty minor products of which only incidental mention is possible.

CEREALS

Corn constitutes the main food supply of the nation and is grown to a greater or less degree in every section of the republic. In importance it outranks every other agricultural product. The chief corn producing states in order named are Jalisco, Guanajuato, San Luis Potosí, Guerrero, Michoacán, and Vera Cruz. Two crops a year are possible in most sections of the country, but the lack of scientific care and unfavorable climatic conditions frequently reduce the yield so far below normal that widespread distress occurs among the poorer classes. Even under the most favorable conditions Mexico is not self-sufficing in her production of foodstuffs. The average yield of corn is less than 100,000,000 bushels a year, or six bushels per capita. At least 155,000,000 bushels are required for domestic needs.

Wheat: The raising of wheat in Mexico is much more localized than the cultivation of corn. The area best adapted to the cereal lies from 6,000 to 9,000 feet above sea-level and comprises some 50,000 square miles of the great central plateau. The chief wheat producing states are Michoacán, Guanajuato, Coahuila, Puebla, Sonora, Mexico, Durango, and Chihuahua. The production of wheat averages less than one-sixth the production of corn and is never sufficient for domestic needs. A considerable quantity is therefore imported each year from the United States. The average yield is below one bushel per capita.

Barley is produced in commercial quantities in ten states, five of which furnish nearly 88 per cent of the entire yield. These are Mexico, Puebla, Hidalgo, Zacatecas, and Michoacán. The average yield is approximately 8,000,000 bushels.

Rice: Morelos, Michoacán, and Puebla are credited with over 70 per cent of the entire rice crop of the republic. Colima, Vera Cruz, Tepic, and Tabasco come next in order named. The cereal is cultivated chiefly on restricted areas of river bottom lands which are subject to flood during certain seasons. The average yield is nearly 30,000 tons.

The

Oats and Rye are grown on a small scale in a few of the central plateau states and in Lower California and Vera Cruz. combined output, however, is insignificant.