Curious customs—The abuse of concessions—Flagrant examples—Prospects for foreigners in Mexico—President Diaz—Mr. Denny’s Life-story.

One of the curious customs in Mexico is the blessing of animals on the 17th of January, the feast of Saint Anthony. On this day at the Merced (Mercy) Church of this city, from four o’clock in the afternoon till dark, the people bring all their animals to be sprinkled with holy water and blessed by the priest. All the animals are highly decorated (I have seen dogs painted all the colours of the rainbow and covered with ribbons for this occasion), and every kind, horses, chickens, goats, pigs, cats, cows, all are brought to the street in front of the church, when the priest comes out and walks down the line, sprinkling them. In some matters Mexico keeps abreast of the times, and possibly is ahead of India and even England. For instance, a dirigible balloon was brought here from the States and run by an American, who could handle it perfectly, going wherever he wished and sailing or swooping at will. It was brought by a Mexican tobacco firm to advertise their cigarettes! I doubt if India or England has yet begun to advertise with dirigibles. It was also, incidentally, a godsend to the rateros, pickpockets and thieves, who reaped a harvest while every one was gaping at the heavens.

One of the things which militate against the growth and prosperity of the country is the custom of granting concessions for every imaginable purpose. When these concessions are asked for by people who intend to invest money in the country and develop a new industry it is bad enough, but the trouble is that many of these concessions are obtained by concession hunters who have barely enough money to put up as the necessary guarantee. These people, hearing of the possibility of some company starting a new industry here, immediately ask for a concession covering the industry, put up the few hundreds or thousands necessary to secure the concession, and then sell out at an enormous profit to the prospective manufacturer. These holdup methods do not always succeed, however, as in the following case. The men at the head of our concern contemplated putting up gas plants in most of the big cities of the republic to supply light and power and heat, and to consume part of the immense production of oil from their field—gas here and in California being now made from oil instead of coal. A lawyer here, hearing of this, asked for the gas concession for this city, put up the $1500 asked as a guarantee, and was granted the concession. With this in his pocket he went to Los Angeles and tried to sell it to our company, who, however, only laughed at him, told him to go ahead and put up his plant, and that they would sell him oil when he was ready. In the meantime they had secured the concession for Mexico City. After this rebuff he tried to get other people to take up the concession, and only after much expense and two years’ time succeeded in getting people who would buy his concession and build the plant which is now in operation in Guadalajara. Some of these concessions are a robbery of the community at large. One granted to a dynamite concern gives them the sole right to manufacture this article, so vital to the mining industry of the country. To protect them, a duty of $90 per ton was placed on the import of the foreign dynamite, but the concession states that, if the company cannot manufacture sufficient to meet the demand, they may import free of duty the balance necessary. The outcome of this is that the company manufactures enough to protect their concession and import all they need, and the entire industry is in their hands. Another concession granted to a young Mexican of this city was ostensibly for irrigation of waste lands, and it reads in part as follows: He is allowed to take all the water he needs from Lake Chapala to irrigate these federal lands (some 400,000 acres), and is paid by the government $5 for each acre so irrigated. He is allowed to build hydro-electric works on the canal, and transmit and sell power wherever he likes; it is estimated that he can generate 50,000 horse-power on the works he has installed, and was first a competitor, and later, combined with the light and power company of the city. Then comes this small, innocent-looking clause: the land round the borders of Lake Chapala, between the present high-water mark and whatever point he succeeds in lowering the lake to, is given to him.

Just imagine a strip from 10 to 50, possibly 100, feet wide round the border of a lake that has about 130 miles, more or less, of border! Besides, he cut every landholder off from a water-front. One wealthy hacendado, realising what it meant to his ranch, paid him $500,000 not to touch his borders. A German company offered him $2,500,000 in cash for the bare concession.

Foreigners, as a rule, are fairly welcome in this country, as they bring in money and start new industries. The upper class and the labourers appreciate this, but the middle class and the skilled mechanics do not, as the latter are crowded out. The Mexican railroad men some time ago agitated for a law which would practically prohibit Americans working at this business, as at that time there were very few Mexicans holding responsible positions on the railroads of the country—few indeed got to be engineers or conductors. When they could not get their law passed they started anti-foreign agitations all over the country, and were backed by all who were “agin the government,” till finally, five years ago last September, the word went round that all foreigners would either be killed or run out of the country. Notices were posted in this and other towns (and immediately torn down by the police) warning us what was to happen if we did not leave, and things began to look serious. Of course few of us looked for any general rising, but for isolated attacks on individuals. Lots of people found it necessary to leave for the States on business (?), and I think most that remained went armed. However, the government was not idle. On the 14th September they ordered all the saloons to be closed and stay closed till the 17th. On the 15th they started making arrests of persons known to be disaffected, and some five hundred from this city and about seven hundred from surrounding towns found themselves in the penitentiary that night. On the nights of the 15th and 16th (the great national holiday) soldiers in small squads patrolled the city till morning, and any one who even shouted “Abajo los Gringoes” (down with the foreigners) was immediately carried off to the Quartel. It was the quietest 16th of September we have had since I have been in the country; on the 17th the prisoners were all released, and the crisis was over, without a single case of assault in the entire republic. This is the way Diaz handled revolutionary talk. Now, since Madero’s successful revolution, all this is changed, and the country is trying to become a real democracy, and may succeed unless some other Diaz arises. The railroads have been taken over by the government, they buying a controlling interest, and Americans are gradually being eliminated and Mexicans pushed to the front as fast as they can find suitable men for the higher positions.

I have not till now described the vice-president and real head of our company, Mr. E. L. Denny, and yet he is worth mentioning as well as some of the incidents of his life. A handsome man, well read, with a low, soft voice, and as well dressed a man as I have ever met; all of which sounds incongruous with his early life. He was, till a few years ago, a “prospector,” who did not have much luck in his prospecting. His partners at different times were Harry Carter, who at the time was our yard foreman, Tom Grand, who is here on a prospecting trip for Denny, and Charles Canrod, who is his partner now in all his big undertakings. Twenty years ago Mr. Denny joined forces with Charlie Canrod, who had also been a prospector, and who had once made a strike and invested his money in a livery stable and hotel, which cost him $35,000, and which he later lost; for these men are rich one day and poor the next. Eighteen years ago they were both broke and came to Los Angeles to find work in order to earn enough money to go back prospecting. This a miner calls earning “a grub-stake.” Denny had been working for the city, but took contracts to paint some houses, and while working on the outskirts of the town, near what is now “Westlake Park,” found some oil exudes. He asked some one what it was (for he had taken a sample as a prospector does), and was told it was “Brea.” He remembered that when he was in Mexico that was the Spanish name for asphalt, and also having heard that where there was an asphalt deposit there was or had been oil. He got his partner Canrod, and they clubbed together what money they had and what they could beg or borrow, and took options on all the land in the Westlake district that they could get their hands on. The two began to sink a shaft, 6 feet by 4 feet, down to find the oil. This shows how much either of them knew at that time about oil; for if they had found a gusher they would certainly have been killed. As it was, they were both overcome once or twice by gas fumes, but did not know what it was. Luckily, they only found a very little “seep” of oil, but sufficient to peddle round for painting and other purposes, and to convince the capitalists (whom they later interested) that they really had something. Thus, getting a start with the aid of borrowed capital, they interested a well-driller, who knew his business, to go in with them and sink proper wells, and they soon had a paying proposition. From Los Angeles they went to Bakersfield, where they got hold of oil properties, and when they cleaned up there they had about one million dollars each. Then they came to Mexico, bought up a tract of land, which they had personally investigated, some 500,000 acres, which showed oil indications, and invested over $1,000,000 in works, tanks, drilling rigs, &c. This field and others later purchased, of which only a small portion has so far been developed, is producing 57,000 barrels of oil per day; and this production can be doubled by opening wells already drilled and capped, as soon as the market is enlarged. Mr. Denny is now worth probably over $30,000,000, and Charlie Canrod not much, if any, less. They started the asphalt company to use up some of the by-product, and have installed a gas company in Mexico City for the same purpose, and will probably instal them in other cities as conditions warrant. They also own oil fields at Sherman and other places in California, and are interested in a dozen different ventures. Such are the men who have made the Western States what they are to-day—men not afraid to take a chance and with the brains and ability to carry their schemes through.