MINING I. COLONIAL PERIOD Place of the Industry: During the three hundred years of Spanish rule, the economic life of Mexico centered around the mining industry. Silver deposits were first discovered at Tasco, in what is now the state of Guerrero, in the year 1525. From that time forward the production of silver, with a slight development of gold placers, became the chief business of the Spanish conquerors. The latter, indeed, were indefatigable miners as well. as soldiers, so that the history of the conquest became largely a history of the discovery and exploitation of mineral deposits. When a new district was opened, a great rush took place similar to the Klondike and Goldfield stampedes of our own time; and where the deposits justified, thriving and permanent settlements were established, many of which to this day are still the chief centers of mining activity throughout the country. Indeed, one can scarcely find a city of any significance in Mexico, outside of the capital and a few seacoast ports, that was not founded as the result of a mining boom, perhaps three or four centuries ago, and that does not owe its continuance to the same inexhaustible ore deposits which gave it birth. Such was the origin of Zacatecas, Pachuca, San Luis Potosí, Parral, Chihuahua, Nuevo León, Monterrey, and of a score of other cities that occupy the chief place in modern Mexican life. But the mineral wealth of New Spain not only served to stimulate exploration and settlement; it also supplied the incentive for nearly all other forms of colonial activity. The crown, by various forms of taxes, derived the larger share of its Mexican revenue from the industry. The ranchers and hacendados relied largely upon the mining communities to furnish.a market for their products. The church depended upon tithes and contributions from those engaged in the industry for the erection of its finest cathedrals and for many special endowments. Merchants, both in Spain and Mexico, looked to the mines as the chief outlet for goods and supplies. A very large share of the country's laboring population found employment in the industry, either in the varied activities of the mines proper or in the reduction works. The mine proprietors constituted the wealthiest class of colonial times and from among them the king created a number of Mexico's most distinguished families. Mining Code: Because of the importance of the industry and the revenue derived from it directly or indirectly by the crown, an elaborate and in many respects very admirable code of laws regulated its affairs to the most minute detail. This code, which The substance of certain portions of this article have been published in various numbers of the Mining and Scientific Press, San Francisco, California. in fact furnishes the basis of Mexican mining law today, consisted in colonial times of five parts, as follows: 2. 1. The mining ordinances in effect in Spain prior to 1584. The Code of Philip II, promulgated in the colonies in 1584. 3. Royal decrees of various dates, generally dealing with specific and sometimes purely local matters. 4. Regulations of individual colonies or provinces. 5. The systematized and scholarly body of laws issued by Charles III in 1783, commonly called the New Code. Under the code of 1584, and in all the laws thereafter, deposits of gold or silver, whether located in public or private ground, were declared the property of the crown and thrown open to public denouncement. Anyone, accordingly, could prospect public or private land, "without any hindrance or interruption from the owners....or from any other person whomsoever," subject only to the obligation of paying for such damage as his prospecting, or "trial pits," might cause. The process of denouncement was hedged about with certain technicalities which need not detain us here; but it is interesting to note that, under colonial law, a concession to the claim was not issued until the denouncer had sunk a shaft three estados, or approximately twenty feet, in depth. If this were not done within three months, the concession was forfeited and the claim again thrown open to denouncement. An official inspection had to be made when the shaft was finished. At the conclusion of this examination the inspector stood at the mouth of the shaft and called three times for prior claimants to appear and prove their rights to the property. If none came, the proceedings were closed by throwing a handful of grass or a few stones into the open pit. The unit of mining concessions was the pertenencia. It was rectangular in shape and varied in size under the different colonial codes. At all times, however, it was considered indivisible; and as its planes ran vertically, the boundaries of a claim, both above. and below ground, were definitely fixed. The law also contained very specific regulations to prevent the careless or reckless working of mines, and sought especially to minimize damage from flood or caving by detailed provisions for timbering, supporting pillars, and unwatering. It is scarcely to be inferred, however, that these elaborate precautions were always zealously or intelligently enforced by the officials charged with mine inspection. Another interesting feature of colonial law, which has been abandoned and readopted with modifications more than once in later-day Mexican history, was the requirement that all claims must be worked or else became forfeited to the crown. The code of Philip II provided that four men, at least, must be kept employed on each pertenencia and that failure to comply with this requirement for a period of four successive months destroyed MINERAL DISTRIBUTION (See Map 2.) Aguascalientes-gold, silver, lead, tin, miscel. Baja California-gold, copper. Campeche-none. Chiapas-none. Chihuahua-gold, silver, copper, lead. Coahuila-lead, silver, zinc, coal. Colima-undeveloped. Durango-gold, silver, lead, iron, copper, tin. Guanajuato-gold, silver, lead, copper, tin, bismuth, mercury. Hidalgo-gold, silver, copper, antimony. Jalisco-gold, copper, silver. Mexico-gold, silver. Michoacán-silver, copper. Morelos-undeveloped. Nayarit-gold, silver, copper (slightly developed). Oaxaca-gold, silver, copper (slightly developed). Puebla-copper. Querétaro silver, gold, antimony, mercury (slightly developed). San Luis Potosi-gold, silver, copper, lead, zinc, quicksilver, sulphur. Sonora-gold, silver, copper. Yucatán-none. all rights of ownership and again threw the property open to denouncement. Only war, pestilence or famine, occurring within twenty leagues of the mine, could be offered as an adequate reason for escaping the penalty. In all these laws, the purpose of the Spanish sovereign was to develop the mineral resources of Mexico through individual initiative and at the same time to protect the ore deposits from reckless or careless exploitation. Besides allowing the widest freedom for denouncement, various other privileges were held out to stimulate the industry. Proprietors were granted the use of forests and water to carry on their operations, and were permitted to expropriate either public or private land for mine or reduction works. Obstacles and Difficulties: But the lot of the Mexican mine owner was not always a happy one, even with the royal favor behind him. Taxes, both direct and indirect, were many and burdensome; and too frequently, in his desperate need for funds, the crown imposed such heavy levies that the mines fell into decay and the exports of silver greatly decreased. The most important of the direct taxes was the royal fifth, or "quinto," a 20 per cent royalty levied upon gross output. The fifth was afterwards reduced to a tenth; but in addition there were assay fees and coinage dues which easily brought the total in direct taxes to something over 16 per cent of the gross production. Under the law, gold and silver bullion could not be used in trade until coined at the mint in Mexico City, but this regulation was impossible of enforcement, and in the northern districts, especially, unstamped silver was the chief medium of exchange. The use of this, however, was carried on at a serious loss to the miners, since goods given in exchange for bullion commanded double price, and a marc of silver, worth eight dollars at the mint, brought only four dollars and a half in Chihuahua or Sonora. Indirect taxes in the form of import duties on supplies, and the royal monopoly on gunpowder and quicksilver were a more serious handicap than the direct levies. So that all told, the colonial miner paid pretty heavily to his sovereign for the privilege of doing business. Another very serious difficulty that retarded colonial mining was the lack of capital necessary to finance the industry in a manner at all commensurate with its needs and opportunities. The joint stock company, which played such a vital part in England's commercial and industrial expansion during the sixteenth, seventeenth and eighteenth centuries, was not known in Mexico. Partnerships were common enough, and a form of lease known as the "avio" to some degree met the needs of cooperation. Under Charles III, also, a Mining Bank, supported by a percentage of the coinage dues, was established to finance mining ventures. But while this proved a real benefit for a number of years, it came to an end with the outbreak of the French wars in Europe, when its funds were sequestrated by the Spanish government and so lost forever to the mining business. The commonest method of obtaining operating capital in colonial days was a sort of tripartite affair, in which mine proprietor, ore buyer or rescatador, and wealthy merchant took part. The rescatador, securing an advance of funds from the merchant, supplied the miner with capital by buying the ore at the mine's mouth. He then reduced the ore and sold the silver to the merchant in whose debt he stood, at a price much below the market. Under such an arrangement operating mines could obtain funds to meet current needs, but the interest rates were oppressive, and the supply of capital too limited for large scale operations. Colonial Labor: Other difficulties, such as scarcity of fuel, primitive transportation facilities, banditry, and Indian depredations, greatly retarded the industry. But one of the most serious problems faced by the mine proprietor was the labor question. The lack of machinery in Mexico made necessary the use of man power or mule power almost exclusively. The difficulty of securing labor was at first partially solved by a form of Indian slavery |