UN WARR ANTED CLAIMS. 83 



OPINION OF THE UNITED STATES CONSUL-GENERAL IN MEXICO. 



As an antidote to the advertising- claims of the numerous rubber 

 companies, investors would do well to consider the report of Consul- 

 General Barlow on " United States Enterprises in Mexico," published 

 recently by the Bureau of Foreign Commerce of the Department of 

 State. " Mr. Barlow finds that about $500,000,000 of American capital 

 is invested in Mexico, about $350,000,000 of this being in railroads, 

 $80,000,000 in mines, $28,000,000 in agriculture, and the remainder in 

 manufactures, banks, and miscellaneous enterprises. The tenor of the 

 discussion of investments in tropical agriculture maj^ be judged from 

 the following extracts: 



Many of them have given their authorized capitalization, running up into millions, 

 as the amount of capital actually invested, when really the amount of capital paid in 

 is a very small percentage of the authorized capitalization and the amount invested 

 is still less, perhaps a few thousand dollars. The first cost of virgin laud in the 

 Tropics of Mexico is very small — say 50 cents to $1 per acre as a liberal average. 

 Development work is expensive, and some of the older companies have no doubt 

 spent considerable sums in improving their properties; but in a general way, the 

 "monthly payment" companies have not invested much in Mexico, however much 

 the small investors may have paid to the promoters for the privilege of holding stock 

 in their companies. 



It is pointed out that, while some of the agricultural companies are 

 successful, "they are comparatively few.' 1 All persons are advised 

 to visit Mexico before investing, and a definite warning is given that 

 the promises of profits of 200 per cent and upward are fraudulent. 



The whole Isthmus of Tehuantepec, and possibly the entire tropical section of 

 Mexico, could be bought by capitalists residing in this city, and if there were any 

 sure 200 per cent investments to be made in that region they would certainly be 

 taken up by persons on the ground who are thoroughly familiar with the conditions 

 there. The speculative bubble will be pricked one of these days, and the small 

 investors in the United States will have a lot of prettily engraved shares of stock 

 and some more or less valuable experience to show for the money they have invested. 

 I am in receipt of an average of ten or more letters each week from persons of small 

 means in the United States who desire to invest in tropical agricultural companies 

 operating or claiming to operate in Mexico, asking for information and advice con- 

 cerning such companies and investments. One reply covers the whole ground. That 

 is, first, that rubber culture in Mexico is as yet purely in the experimental stage, 

 and no reliable statistics or information could be given concerning its probability of 

 success. Promises of dividends by companies who propose to engage in the rubber- 

 growing business are purely speculative and theoretical. * * * A small invest- 

 ment made by a school-teacher or minister or laboring man in the United States in 

 a foreign enterprise blindly, may be well made; but in nine cases out of ten, the 

 money could be invested to better advantage in the United States. 



It should in fairness be repeated that the above quotations are made 

 as an antidote rather than as representing an entirely satisfactory 

 statement of the rubber situation. It would have been very difficult 

 if not impossible for such a discussion as that of the consul-general 



« Advance Sheets of Consular Reports, December 22, 1902. 



