A Business Man: Ulysses S. Grant and the Mexican Southern Railroad

Many years later following the end of his presidency, Ulysses S. Grant decided to venture on a trip to Cuba and Mexico in December of 1879. Grant’s colleagues, such as Whitelaw Reid, asserted that Grant's trip was motivated by his eagerness to make money. Grant was “dazed” by the business ventures Mexico presented. However, Grant asserted that there were two reasons for his trip. First, to gratify the interest he had taken in Mexico during the US-Mexico War. Second, to see if a relationship between Mexico and the United States could be established, both as a friendship and as commerce. While Grant most likely did want to build an international friendship, some historians believe that the Cuba and Mexico trip was Grant’s way of laying the groundwork should he choose to exit politics for good. [1] Furthermore, this trip would lead to a groundbreaking development in Mexico: the railroad.

Grant’s initial interest in Mexico began with the US-Mexico War. Beginning in 1846, the United States and Mexico fought a brutal war over the annexation of Texas. The end of the war resulted in the establishment of the Mexican border with the United States along the Rio Grande. Grant developed sympathy towards Mexico during the war where he gained a new perspective regarding our southern neighbors. The war showed that he was cool, calm, and collected under heavy fire. Although he was a natural on the battlefield, Grant also held the strong belief that the war was one of the most unjust wars ever waged against a weaker nation. His feelings towards Mexico and the connections he made throughout the war would prove to be important after his presidency when he looked to build business relations with Mexico. [2]

When reflecting back on his time in Mexico, Ulysses S. Grant was outspoken about his disdain towards the United States and the war with Mexico. He often said it was the most unjust war the US had ever taken part in. Maybe it was this sentiment that led Grant to pursue business ventures in Mexico. [3] Whatever his motivation, his involvement in the Mexican Southern Railroad would make Wall Street capitalists recognize the importance of building US-Mexico relations. Grant, with the help of Mexican Minister to the United States Matías Romero, would bring the railroad to Mexico. The Mexican Southern Railroad proved to impact both the United States and Mexico in many ways, including the exploitation of a new market.

Grant’s trip to Mexico City was his key to developing his relationship with Mexican leaders. Grant and his party expressed interest in “growing prosperity” and the country’s need for modern transportation. Grant’s visit to Mexico was economically important. In speeches and letters, Grant emphasized his desire to eliminate revolutions and had hope of improvement and prosperity in Mexico. It was also Grant’s belief that Mexico’s mines and railroads could bring prosperity with the help of American capital. [4]

Grant drew back to the relationship he built during his stay in Mexico, specifically with Matías Romero. Romero believed that transportation was the single most expensive cost of transporting new machinery across Mexico. Romero argued that Mexico cannot attain a future without the construction of railways to increase production and take part in the industrial revolution. [5] Furthermore, Romero believed that much of the national territory was inaccessible due to lack of transportation methods. Grant expressed previous ideas regarding opportunities for a railroad in Mexico. He also discussed the prosperity that Mexico could enjoy, adding that the public would be very pleased. [6] Romero was an ideal partner for Grant as he, too, believed in the opportunity Wall Street could present for Mexico. [7]

Romero and Grant both worked to convince American capitalists to invest in a Mexican Railroad. Romero spoke about the commercial importance and superiority of the United States and the market Mexico would present if it were developed. Grant spoke about the ways in which a railroad in Mexico could be developed. This left markets for goods to operate on a small, local scale. [8] Shortly after, a committee was developed to investigate the railroad interest in Mexico. Border lawlessness and debt caused many investors to hesitate before lending money for long-term projects in Mexico. When Grant arrived with his intention of building a rail line, Romero wasted no time sharing this information with his colleagues. [9] Romero helped gather supporters for a railroad to be constructed.

Grant was named the President of the Mexican Southern Railroad in 1881. While Grant looked forward to expanding his business deals, promoters of such a business venture looked for ways to frame Mexico as a place for capitalist expansion. The new line ran south from Mexico City. The business was to be responsible for constructing and operating railroads and telegraph lines. After the company was created, Grant gained recognition in both the United States and Mexico for the railroad. The railroad turned into a major line in Mexico. Soon enough, Grant was involved in large projects in Mexico concerning expanding the railroad and consolidating with the Mexican Oriental Railroad. [10]

The Mexican Southern railroad and the United States’ financing of such rail lines provided a direct link of Mexican markets to the newly completed transcontinental United States rail lines. Not only did this provide a link to Mexican markets, but the railroad also provided a way to connect to mining, manufacturing, and agricultural districts.

The Mexican Southern Railroad would eventually collapse in 1884, though it is still unclear what led to this collapse. The railroad did provide a connection to a new market for the United States, but it did not generate new opportunities for Mexicans to acquire the knowledge required to work on new machinery. Freight rates caused issues as well for those trying to maintain the railroads. Additionally, the construction of railroads and human expertise required were primarily designated to foreign resources. [11] The benefit of having a respected person like Grant in Mexico proved to be large, but it was not enough to keep the Mexican Southern Railroad alive.