Mr. Bigelow to Mr. Seward

No. 369.]

Sir: The Moniteur of yesterday morning contains a convention which has just been negotiated between the Emperor of France and the so-called emperor of Mexico, of which I enclose a translation. It is designed to give to France a lien upon one-half the maritime customs receipts of all Mexico, and one-fourth of all the Pacific coast export duties, the remaining three-fourths being already pledged otherwise. It is stipulated that the funds to be collected from these sources shall be appropriated to the payment of—

1st. Interest, sinking fund, and principal of obligations resulting from the two loans made in 1864 and 1865 by the Mexican government; and,

2d. Interest at the rate of three per cent. on the sum of 216,000,000 francs, acknowledged by the convention of Miramar to be due to France from the Mexican government; and,

3d. Interest upon all sums advanced by the French treasury for whatsoever purpose, estimated now approximately at 250,000,000 of francs; the amount, however, to be hereafter definitely ascertained.

The collection of these duties is to be intrusted, at the ports of Vera Cruz and Tampico, to special agents under the protection of the French flag. French consular agents are to certify the returns from other ports. The Emperor of France alone has authority to decide how long the collectors of customs shall remain at Tampico and Vera Cruz, and he engages to take the requisite measures to protect them. The financial provisions of the Miramar convention of the 10th of April, 1864, are to be considered as abrogated, from the time to be designated by the Emperor of France for the new treaty to go into effect, which is declared by the imperial decree accompanying the convention, to be the 1st of November next.

The terms of this convention correspond substantially with what I prefigured in one of my communications to you early in the year. They correspond also, with the terms of negotiation sent to the French minister in Mexico, by Mr. Drouyn de Lhuys, in a communication bearing date February 16, 1866, which you will find in Documents Diplomatiques, No. vii, the second yellow book, communicated to the Corps Legislatif, at its last session, on page 37. The passage to which I refer, runs as follows:

“The government of the Emperor has thought that the combination the most simple and least onerous for the Mexican government would consist in the delivery into our hands of the customs of Vera Cruz and Tampico, or of others which may be thought more convenient. Half the products would be assigned to us to be applied, a portion to the payment of the interest at three per cent. of [Page 349] our credits, estimated at 250,000,000; and the remainder as a partial guarantee of the interest due to holders of the loans of 1864 and 1865. Administered by our care, it is to be hoped that these customs will furnish still, after the deductions previously agreed upon, important resources. You will therefore make with the cabinet of Mexico the necessary arrangements for this transfer to us.”

It is a curious coincidence that on the 1st of August, the day after this convention was signed at Mexico, by Maximilian, assigning away the duties to be collected at Tampico, that town was wrested from his control by the Mexican people; leaving, therefore, for the present at least, only Vera Cruz to respond to the expectations of his transatlantic ally.

A few days since, and before the convention in question abrogating the treaty of Miramar, and depriving Maximilian of his only reliable pecuniary resource, was ratified here, it was announced that General Castelnau, aide-de-camp of the Emperor of France, was to leave for Mexico in the steamer of the 17th instant, charged with a special mission, of which an officious explanation appeared in the Patrie, and was from thence generally transferred to the French press. It runs as follows:

[From the Patrie of September 12.]

“We believe that we can state that the mission of General Castelnau to Mexico is connected with the approaching realization of an entire reorganization. The plan involves several administrative and military reforms, which are to come into operation in the month of December next. The nomination of General Osmont as minister of war, and M. Friaut as minister of finance, were only the commencement of this new situation. According to the bases adopted for the Mexican army, that force, commanded principally by French officers, is not only to maintain order and tranquillity in the country, but to be employed to manage the different services, bota administrative and financial. The employés requisite for that purpose are to be selected from its ranks. This system, intended to last for three or four years, will have the advantage of enabling great savings to be effected, since Mexico will then have no other expense to meet than the support of the army, while it will satisfy the most pressing requirements of the inhabitants, whose first wants are order and economy. The organization of the new Mexican army—the basis of this system—was rapidly advancing by the last accounts. The number of voluntary enlistments was so great as to warrant the suspension of the conscription. As soon as the army shall be entirely formed it will take possession of the different services, and it is hoped that this substitution can be effected before the departure of the last contingent of the French expeditionary corps. When General Castelnau, as French commissioner, shall have regulated the different questions to which the adhesion of France is considered necessary, he will return to Paris, where he is expected to arrive in the early part of December. It is asserted that Marshal Bazaine, who will no longer have a command suited to his high rank, will leave Mexico about the same period.”

The appointment of the French officers Osmont and Friaut as ministers of war and finance by the emperor Maximilian seemed to be regarded by the print from which I quote as a part of a new programme for the reorganization of the Mexican government, and to day a foundation for the inference that Maximilian was preparing to make the Emperor of France, if he took the custom-houses, take with them the responsibilities of the government. This, however, does not prove to be to the taste of the Emperor of France, as I infer from the following paragraph, which appears in the Moniteur of this morning:

“By a decree of the 26th July, his majesty the emperor of Mexico has intrusted the portfolio of war to General Osmont, chief of the general staff of the expeditionary corps, and that of finance to the military intendant, Friaut. [Page 350] The military duties of these two superior officers, attached to an army in the field, being incompatible with the responsibility of their new functions, they have not been authorized to accept them.”

The facts which I have here recited require no amplification to show the deplorable situation in which these two governments have placed themselves, as well towards the rest of the world as towards each other. It is enough to say that to all appearance they are in a state of complete disaccord, and in a position from which it is extremely difficult to see how either can extricate itself with dignity or with honor. Everything that has thus far transpired favors the suspicion that Maximilian is anxious to transfer his ill-starred off-spring to the arms of the Emperor of France, who does not seem disposed to accept it.

I have not yet seen the minister of foreign affairs ad interim, who yesterday again pleaded an engagement with the Emperor as his excuse for not receiving the diplomatic corps. It is now presumed that there will be no official receptions at the foreign office until M. de Moustier arrives, except upon special applications. It is understood that the Emperor leaves for Biarritz on Monday, and that M. de Moustier, who is expected to land in France early in October, will join his Majesty there before coming to Paris. In view of such a contingency, I propose myself to leave for Biarritz to-morrow.

I annex a translation of an article commenting upon and explaining the recent convention between the Emperor and Maximilian, which appears in the Constitutionel of this morning. It may be regarded as semi-official.

I am sir, with great respect, your very obedient servant,

JOHN BIGELOW.

Hon. William H. Seward, Secretary of State, Washington, D. C.

Imperial decree for the promulgation of the convention signed at Mexico, July 30, 1866, relative to the delegation* granted to the french government on the customs receipts of Mexico.

Paris, September 12.

Napoleon, by the grace of God and the national will, Emperor of the French, to all to whom these presents shall come, greeting: Considering the report made by our minister secretary of state for foreign affairs, have decreed and do decree as follows:

Article 1.

A convention relative to the delegation granted to the French government on the customs receipts of Mexico, having been signed at Mexico on the 30th of July, 1866, the said convention, the terms of which follow, being approved of by us, shall be fully and completely carried out, beginning on the 1st day of November, 1866.

CONVENTION.

His Majesty the Emperor of the French, and his Majesty the emperor of Mexico, actuated by a wish to settle in a mutually satisfactory manner the financial questions now pending between their governments, have resolved to enter into a convention for that purpose, and have appointed as their plenipotentiaries, namely:

His Majesty the Emperor of the French, Mr. Alphonse Dano, his envoy extraordinary and minister plenipotentiary in Mexico, commander of the imperial order of the legion of honor, grand cross of the order of Guadalupe, &c., &c., &c., acting under his general full powers; his Majesty the emperor of Mexico, M. Luis de Arroyo, under secretary of state, chargé of the department of foreign affairs, officer of the order of Guadalupe, &c., &c., &c., anthorized for that purpose; who have agreed upon the following articles:

Article 1. The Mexican government grants to the French government a delegation on one-half the receipts of all the seaport custom-houses of the empire arising from the duties hereafter mentioned.

[Page 351]

General and special duties of import and exports on goods of all kinds.

Additional duties of internacion and contra-registro.

Duties of major as materials, when these latter shall be freed from the existing delegation, granted for the benefit of the railroad company from Vera Cruz to Mexico, which delegation shall not be extended.

Nevertheless, three-fourths of the export duties of the custom-houses on the Pacific being already pledged, the delegation granted to the French government shall be restricted to the remaining twenty-five per cent.

Art. 2. The funds collected through the delegation agreed on in the preceding article shall be applied, 1st. To the payment of the interest on the sinking fund, and the payment of all the obligations (bonds) arising from the two loans contracted in 1864 and 1865 by the Mexican government. 2d. To the payment of the interest, at the rate of three per cent., of the sum of two hundred and sixteen millions of francs, of which the Mexican government has acknowledged itself debtor by the Miramar convention, and of all the sums subsequently advanced by the French treasury for whatsoever purpose. The amount of this debt, now estimated by approximation at two hundred and fifty millions of francs, shall be hereafter definitively established.

In case of the funds being insufficient to fully meet the above-mentioned charges, the rights of the holders of bonds of both loans and those of the French government shall be fully reserved.

Art. 3. The funds arising from the delegation of one-half of the proceeds of Mexican customs will increase in proportion with the receipts, and in case these funds should exceed the sum requisite to satisfy the claims set forth in article 3*, the surplus shall be applied to cancelling the debt due to the French government.

Art. 4. The tariff of duties and the mode of levying it now in use can in no wise be altered so as to diminish the quota granted.

Art. 5. The collecting of the moneys arising from the delegation mentioned in Article 1 shall be intrusted at Vera Cruz and Tampico to special agents, placed under the protection of the French flag.

All the duties levied at these two places, on account of the Mexican treasury shall be applied in full to the benefit of the French delegation excepting only such portions as are applied to delegations presently existing and to the salary of the employés of those two custom-houses. The amount of this latter expense, which will include the salaries allowed to the French agents, shall in no case exceed five per cent. of the above-mentioned duties. A quarterly statement of accounts shall show the amount thus levied by the French government, and the proceeds of the delegated duties for all the custom-houses of the empire. This statement shall determine the amount to be immediately paid in by the Mexican government in order to complete the quota granted, if there be a deficiency, or the amount to be returned to it in like manner in case of excess in collecting.

In all the ports, except Vera Cruz and Tampico, the French consular agents shall visé the returns of the situation of the custom-houses of their district.

Art. 6. The Emperor Napoleon III shall alone decide how long the agents appointed collectors shall remain at Vera Cruz and Tampico, and take the measures requisite to insure their protection.

Art. 7. The above-mentioned stipulations shall be submitted to the Emperor of the French for approval, and be enforced from the time appointed by his Majesty.

The convention signed at Miramar on the 10th of April, 1864, shall then be abrogated in all points relating to financial matters.

In token of which the respective plenipotentiaries have signed the present convention, to which they have set their seals.

Made double at Mexico on the 30th day of July, A. D. 1866.

ALPH. DANO.

LUIS DE ARROYO.

Article 2.

Our minister secretary of state for home affairs, chargé of foreign affairs ad interim, is intrusted with the execution of the present decree.


NAPOLEON.

Seen and sealed with the seal of state.

By the Emperor:

J. BAROCHE, The Keeper of the Seal, Minister of Justice and Public Worship.

LA VALETTE, The Minister for Home Affairs, Chargé of Foreign Affairs ad interim.

[Page 352]

[Untitled]

The value of the convention, the text of which is given above, will be at once understood by all, and especially appreciated by the creditors of the new Mexican expire.

In consequence of this act, one half of all the revenue derived from general and special import and export duties on all merchandise entering Mexico, and on silver bars and other indigenous productions sent abroad, as well as of the additional duties of internacion and of contra-registro, will be paid over into the French treasury.

Our readers will doubtless remember that the duty de contra-registro is a registration tax, and that of internacion a clearage tax on goods going from the custom-house into the interior of the country. This latter duty was formerly collected only at the place where the goods sent inland left the seaports’ circonscription, but now a recent regulation from Emperor Maximilian makes it payable on all goods the moment they arrive. The duty of internacion is 15 per cent., not ad valorem, but on the entrance duty imposed on the goods; it is a sort of tithe.

A third additional duty, this latter amounting to 20 per cent., shall also be applied to complete the quota of one half which is granted us, but only when it shall be free from existing liens; it is the tax called majoras materiales—(material improvements.) This tax is actually pledged for a little while yet as a subsidy for the benefit of the railroad company from Vera Cruz to Mexico.

The same state of things occurs concerning the duties of export only, not of import, through the ports of the Pacific—at Acapulco, Mazatlan, San Bias, and Guayamas. The revenues from that source are applied partly to the payment of international debts, and partly as a subsidy for the railroad which is hereafter to connect the capital with the Pacific ocean.

Last year the seaport customs produced sixty-five millions. The right to collect one-half of them is, therefore, no inconsiderable object, and such resources will be sufficient to meet many of the engagements of the Mexican government.

These engagements are recited in the second article of the convention, as follows:

The funds collected through the delegation [a lien] agreed on in the preceding article shall be applied—

1. To the payment of the interests, the sinking fund, and the payment of all the obligations [bonds] arising from the two loans contracted in 1864 and 1865 by the Mexican government.

2. To the payment of the interests, at the rate of 3 per cent. of the sum of two hundred and sixteen millions of francs, of which the Mexican government has acknowledged itself debtor by the Miramar convention, and of all the sums subsequently advanced by the French treasury, for whatever purpose. The amount of this debt, now estimated by approximation at two hundred and fifty millions of francs, shall be hereafter definitively established.

This assignment of revenue for the benefit of creditors is but an appropriation of securities; it is not a payment liberating the Mexican government from all indebtedness towards its various creditors. Hence the rights of holders of bonds of both loans, as well as those of the French government, are expressly reserved.

Should, on the other hand, the funds thus received in consequence of increasing international commerce exceed the interest to be paid by the Mexican government, the surplus shall be applied to a gradual cancelling of its indebtedness to the French government.

Mexico having surrendered the right to diminish henceforth the import and export duties, this assignment has a fixed basis which cannot be removed, but which can only fluctuate in consequence of an increase or a decrease in the commercial movement which has been steadily on the increase since our occupancy.

There is no reason to fear that any circumstances, foreseen or unforeseen, can either suppress or delay this levying on the revenue, as it is to be effected in the two principal ports of import and export at Vera Cruz and Tampico by special agents placed under the protection of the French flag, and most likely French subjects.

This measure will not only prevent any of the duties collected being diverted from its proper use to our loss; it will also be beneficial to the Mexican government; for our agents, better accustomed to administrative regularity, endowed with more vigilance and energy, and more skilful in ferreting out and baffling fraud, will watch with greater care the collecting of the revenue.

In all the ports except Vera Cruz and Tampico the French consular agents shall visé the returns of the situation of the custom-houses of their district.

The agents appointed collectors of customs shall be paid by the Mexican government; but, in order to prevent their salary ever becoming a burden on the imperial treasury, the latter shall contribute towards it in case of insufficiency, but in the proportion of one-twentieth of the amount collected.

The Emperor Napoleon III shall alone and absolutely decide how long the agents appointed collectors shall remain at Vera Cruz and Tampico.

This convention, as we thus see, is a new proof of the imperial government’s solicitude for the interests involved in the Mexican question. It insures to the holders of bonds a serious guarantee, since it is placed under the watchful care of the agents and representatives of France, and under the strong shield of the national flag.

LOUIS CHAUYEAU.
  1. Delegation or lien.
  2. This doubtless should read Article 2.