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"It is a narrow strip of territory,' he answered, 'nowhere more than twelve and one half miles wide, along the northern border of Mexico. Into the ports of this Zone goods may be imported on payment of only 10 per cent. of the regular duty. The people on the Mexican side of the border can thus get French wines, liquors, silks, and laces and similar goods from other foreign countries, cheaper than those on the American side. The merchants on the Mexican side have to pay only one tenth of the Mexican duty on these goods, while those on our side pay the whole of our duty. As a consequence, there is a strong temptation for residents on the American side to buy these things on the Mexican side and run them over without paying duties. A substantial advantage is reaped in this way by the Mexican merchants.

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'This advantage, however, is largely offset by the high taxes levied on the Mexican side. They have a stamp tax there which would make the internal-revenue provisions of the Wilson-Voorhees bill green with envy; and every time a dollar shows itself it is loaded with a new tax. If one or two houses go out of business, their tax is usually added on to the quota of those remaining, so that the Zona Libre benefits are largely eaten up by higher taxes.

“Aside from the class of European goods I have mentioned, we supply this frontier market with nearly everything sold there. Take it all around, we probably outsell the rest of the world three to one, all along this border line of Mexico from the Pacific Ocean to the Gulf. As our goods are free on our side and pay 10 per cent. of the high Mexican duty on the Mexican side, our merchants can and do compete with the Europeans in everything we produce. We almost hold our own against many European goods.'

"These conditions must reflect themselves in the prosperity of the towns on the two sides of the border?'

"They do. Matamoras, which was formerly the gate to Mexico, has now very little business; Brownsville, on our side of the river, has it all. Nuevo Laredo, Mexico, has less business every year, while Laredo, Texas, gains steadily. Most of the chief buyers of Nuevo Laredo come over and buy groceries, dry goods, furniture, etc., on the American side, and get them across on verbal permits or on the regular invoices of importers. The largest stocks are carried on the American side. There are two or three large stores on the Mexican side; but even with the Zona privilege the advantages, except on a few lines of European goods, are with our people. At Piedras Negras and Eagle Pass business is about equally divided; but this is because the railway shops are located on the Mexican side. At El Paso, Texas, and Juarez, Mexico, the American side has three times the trade of the Mexican side.'

"In all these cases the Rio Grande is the boundary, is it not?'

"Yes; but at Nogales, Arizona, and Sonora, Mexico, the boundary is an imaginary line, and you have to get your bearings by the hills and other landmarks from time to time to tell whether you are in Mexico or the United States. This gives rise to many oddities. One dramseller has the line running through his bar-room. As the license laws are easier in Mexico, he has his drinking bar on that side, and his customers cross the room into the United States to wipe off their perspiration.'

"The idea of abolishing the Zona Libre is not new?'

"By no means. It has been discussed for thirty-five years at least. During our Civil War the free belt made Matamoras the third port in the world. As we have increased our production of goods which Mexico needs, the benefits of the Zone have diminished, until now it serves only to keep alive the towns on the Mexican side. The Mexicans, except along the border, think no more of it than we do. They would be very glad of some convenient way to get rid of it. But they know that if it were abolished summarily it would utterly kill out what little mercantile life now remains on their side. What ought to be done is to negotiate a treaty by which the products of each country, at least in small amounts, could cross the border without payment of

duties on either side. If that were done Mexico could afford to wipe out the Free Zone and dispense with European goods."

"How would the summary abolition of the Zone affect us?'

"It would not do for us to urge its abolition without this local free interchange of products, because the Zone is now a large consumer of many of our goods. Wheat, flour, corn, bacon, lard, etc., are supplied by us exclusively, as well as many other necessaries. So long as the inhabitants of the Zone can import these at 10 per cent. of the regular duties, they can eat them; but if the full duties were exacted, they would be too expensive. For instance, some five million pounds of our flour are imported every year at Matamoras, Nuevo Laredo, Piedras Negras, Juarez, and Nogales, exclusively for consumption in the Zone, for scarcely a barrel goes into the interior. The full duty is more than two cents a pound on wheat and four cents on wheat flour. Those who live in the Zone can pay 10 per cent. of this duty and eat our flour; those farther back have to buy Mexican flour or eat corn-meal.'

"How would you advise going about the improvement of present conditions?' "What we have long needed in our relations with Mexico is to put political questions in the background and study and treat with Mexico on a friendly commercial basis. Do you know that we have absolutely no treaties of any sort in force with Mexico to-day except an extradition treaty-an extremely faulty one-dated away back in 1861? It is high time to negotiate at least a commercial treaty. Mexico needs our products and has always been disposed to meet us half way. Too much protection buncombe by one party and too much free-trade theorizing by the other have prevented our doing five or ten million dollars' worth of commerce with Mexico every year, to the great benefit of both countries.

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We had the Grant-Romero treaty in 1883. I worked on that with General Grant, and hoped that even so small a step in the right direction would be followed by others. The House proceeded to pitch the treaty out of court, while some individuals added insult to injury by saying mean things about Mexico. We ought now to pass a general resolution reciting what should be done, intrust the plan to a non-partisan commission to work out, and, when they have made a report, enact the necessary legislation promptly, with such conditions that it will stay in force not less than ten years.' "Why not have complete free trade with Mexico, as our next neighbor?' "It would be idle to talk about that for the present. Mexico is too poor even to consider such a suggestion. She could afford, however, and I believe would be willing, to try a system of limited reciprocity, with such local border interchange of national products as would enable her to abolish the Zona Libre. Both countries would reap the advantage of a cessation of smuggling, and Mexico would be enabled to do away with most of her interior customs guards, and save a half-million dollars or more in salaries every year. Along with such a system some articles could be made free in each country, and a few others given lower duties. The subject is of great importance, and one to which I have given much study for fifteen years. I earnestly hope a change in present conditions will be inaugurated soon.'

Supplement to the Free Zone.-At the end of this book I will append a Supplement to the Free Zone paper, containing recent official information received from the Mexican Government since this paper went to press, on the extent of the foreign trade in the Free Zone, and a brief review of the action taken on the same subject by the Fifty-fifth Congress of the United States, resulting in the repeal by the House of Representatives of the Joint Resolution of March 1, 1895, and causing the production of important official documents.

LABOR AND WAGES IN MEXICO.

LABOR AND WAGES IN MEXICO.

I have often heard it stated, in this country, as the chief reason for advocating restrictions on its trade with Mexico, that we pay low wages to our laborers, who are sometimes called paupers and peons, and that the maintenance of the high wages prevailing here requires that the free entrance of Mexican products similar to those of the United States be prohibited by the imposition of high duties.

As long as I did not hear these ideas expressed by Federal functionaries, I did not think that I was called upon to rectify them, but when Mr. Thomas H. Carter, formerly a Member of Congress, and now a Senator from Montana, in a speech delivered in the House of Representatives, on May 15, 1890, in support of the provisions of the tariff bill which became the Act of October 1, 1890, levying a duty upon lead in ores, based his arguments on the fact that we had in Mexico peon or slave labor, and that the United States had to protect her own citizens against the pauper labor of Mexico, I believed it was my duty to explain what we meant in Spanish by peon, and what was the condition of the Mexican laborers, thus rectifying the mistaken opinions in that regard prevailing in this country. I considered myself specially called upon to do so, as the same objection is repeated whenever it is proposed to adopt liberal measures for the promotion of trade between the two neighboring Republics. It seemed to me that I might contribute to the better understanding of each other and to a reciprocally advantageous increase of their trade relations, if I should give some idea of the condition of the Mexican laborer; of the wages which are paid in Mexico; of the causes which control their amount; of the manner in which these causes affect the cost and therefore the price of the commodities we produce; and of the price of Mexican articles obtained with low wages, as compared with the price of the same commodities produced here with high wages, and finally of the cost of living in Mexico.

Before writing on the subject, I waited until some time had elapsed after the tariff bill, approved October 1, 1890, had become a law, to avoid incurring the imputation of desiring to interfere in the internal

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