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Rh began to feel that it had been hoaxed. It soon became notorious that the railroad was not completed according to contract, and that the inauguration had been premature. This was regarded as a fraud on the part of the contractors, to whom large concessions had been granted. The press severely denounced the matter; but the government entered into no explanation, which indicated that it intended to support the railroad company. Unfavorable comments were made, and conclusions drawn as to what would be the ruinous result of future expensive concessions for like enterprises.

While Lerdo was thus being fêted and flattered, trouble was brewing elsewhere. Manuel Lozada, cacique of Alica, had acquired a despotic power over the district of Tepic, whose inhabitants had practically maintained their independence from the time of the conquest. This chief, ever ready to aid those opposed to the government, had afforded hospitality to several of the late revolutionary leaders, and these had gained ascendency over him. On the 1st of August, 1872, he issued a proclamation stating that the towns of Nayarit could only yield a passive obedience to the government; they could not defend it. At the same time hospitality was offered to Porfirio Diaz, Plácido Vega, Trinidad García de la Cadena, and others. At the beginning of October the ayuntamientos, constituted authorities of Tepic, were forcibly removed from office, and others of insurgent tendencies appointed in their places. In November Lozada sent commissioners to Lerdo to explain matters, and lay before the government propositions for the settlement of matters relative to the district. The commission returned at the end of the year, but the result of their mission was not satisfactory to the people of Tepic. On January 15, 1873, a great council was held at San Luis de Lozada, and on the 17th the tribes of Nayarit issued a plan proclaiming war