Papers Relating to Foreign Affairs, Accompanying the Annual Message of the President to the Second Session of the Fortieth Congress
Mr. Romero to Mr. Seward
My Dear Sir: I have the honor to transmit to you, for your information, the minutes of the French legislative assembly for the 21st and 22d of June last, containing the discussion of various questions relating to the state of the French treasury, in connection with the intervention of the Emperor of the French in the internal affairs of Mexico. I also permit myself to send you some of the articles published by the Paris press on the same subject.
I remain your very obedient servant,
Hon. William H. Seward, &c., &c., &c.
Legislative body.
Friday, 21st June, 1867, M. Schneider presiding.
The President. The Chamber has decided that the debate on the supplemental credits should take place to-day. The discussion is open; M. Berryer has the floor.
M. Berryer. My remarks to the Chamber shall be as plain and brief as possible.
The question is about a considerable financial operation, sanctioned by the bill now before the house. The negotiation made by the minister of finance is for a capital of 54,000,000 francs, remitted by Mexico to the French government, charged upon its debt, which was fixed at 270,000,000 by the treaty of Miramar. That treaty assured the revenue on the 54,000,000 to France, at the value of the bonds when they were issued.
The remission was made, and is considered by the legislative assembly as representing the capital, the interest on which was to be assured to this country. Out of those 54 millions, the sum of 40,100,000 francs has been applied to the budget of 1864, and the rest, say 33,900,000 francs, was added to the budget for 1865.
At this period, the financial report of 20th December, 1865, came in, stating that the rentes had been converted into obligations of the second series, like those of the first series, issued in May, 1865.
The minister of finance informs us that the obligations had been negotiated, and the result was a loss of more than 2,000,000 francs to the treasury; and consequently the appropriations for the budget of 1865 would have to be increased.
Such is the condition of things; and from the loss of the 2,000,000 by the Mexican negotiation, instead of 13,000,000, only 11,000,000 are put in the budget of 1865.
This is not a proper way to reckon. It is true, an entire credit was opened, but only two millions was set down as loss to the French treasury; and in the report of 1865 it is charged to arrearage; but I believe interest is never considered as payment of part of the principal of a debt. It is not correct, then, to state two millions as the entire loss on the Mexican obligations. Some explanations were made in December, 1866. In the report of that date it is stated that the appropriation of 11,000,000 from the budget of 1865 had not been applied, because the rentes and obligations had not been realized; and the grantees were excused from their contract by reason of vis major,
I think the excuse is scarcely reasonable. What was the contract ? We are not informed. What were its conditions, its nature ? From the report of 1865 we must consider it a binding engagement, and not a conditional obligation: and yet they say it could not be executed!
The operation is somewhat explained by the report we discuss to-day: the committee say: “The Mexican rents of 54.000,000, converted into obligations, ceded to the discount bank, have been reduced to 42,657,200 francs.”
The difference, then, to the treasury, is not 2,500,000 francs, as stated by the minister of finance in his report for 1865, but a loss of 11,000,000, the difference between 54,000,000 and 42,000,000, to have been paid by the concessionaires. And who are they ? Nobody can discover.
Now, let us look at the result of the operation. The obligations sold were negotiated at a time when their rate was 340, and yet the company that owed the 42,000,000 to the state, what did they pay ? Only 14,287,000 francs; so that the real loss to the treasury is not only 11,000,000, as we have mentioned, but several millions more. 54,000,000 were given for 42,000,000, and the purchasers at 300 francs sold for 341, doing an excellent business.
What, then, were the circumstances of vis major that prevented the execution of the contract ? It is a loss of 25,000,000 to the treasury. And what has the treasury to show for it ? Instead of 42,000,000, it has received 14,000,000, and 28,000,000 in Mexican bonds; and we all know how much Mexican bonds are worth.
We have then the right to ask who are the concessionaires ? I think I am not mistaken when I say they are the persons to whom the Mexican bonds were ceded in 1865 for 300 francs; the same persons who issued the first loan of rentes and lotteries, and who made such profits; and they did not merit the preference shown them.
In May, 1865, the concessionaires of the loan received the titles at the rate of 300 francs and sold them for 340, and then the loan was closed. There was a margin of 40 francs on each bond, making 20,000,000 profit on the 500,000 bonds.
I do not say the company made a clear profit of 20,000,000, for there were the costs of negotiation; but we cannot accept the company’s declarations that a second contract was impossible. The Mexican loan was converted into obligations of a second series, exactly similar to the first; and what is more, the same concessionaires proposed to take the obligations of the second series, which they received at 300 francs, for 345 francs, and they even advertised them for 345 francs.
That took place in 1865, when circumstances were favorable. Now, if these concessionaires are the same that made the contract I have mentioned, how do they cause a loss of 28,000,000 to the treasury, when their duty was to pay 42,000,000, and receive a receipt in full when they pay only 14,000,000 into the treasury? I do not see why they are so favored; it is a question that ought to be explained to this house.
[Page 600]I have a few more questions to ask the minister of finance on this Mexican business. What were the conditions of the contract? What circumstances gave the right to a company that had made such immense profits on two series of obligations not to pay .the 42,000,000 it owed to the treasury ? That ought to be explained.
It has often been said that the sole motive for the Mexican expedition was to insure an indemnity to the French residing in Mexico that suffered losses previous to the expedition; and such was the tenor of articles in the treaty of Miramar. Articles 11 and 12 stipulate that a sum of 12,000,000 shall be reserved for our countrymen who have suffered losses. This 12,000,000 was to be realized by a board, presided over by one of our well-known bank directors. And where are those 12,000,000 ?
In 1866 a convention was drawn up by Mr. Dano, fixing the indemnity for the French injured previous to the expedition at 40,000,000, including 12,000,000 by virtue of the treaty of Miramar; and to these 12,000,000, representing a nominal value of 16,000,000, are to be added 24,000,000 by the convention of 1866. And how much of this will the poor suffering French get ?
What has become of the 12,000,000 remitted by Mexico in virtue of the treaty of Miramar, and of the 24,000,000 that were to have been remitted in virtue of the convention of 1866? This is an important question, and its solution would shorten debate in this house on the Franco-Mexican financial affairs. We would all like to know to whom said payments have been made.
There were a variety of creditors, or people who pretended to be creditors. You know it Was the amount claimed for the French that caused a diversion of the English and Spanish at Soledad. Now I would like to know if some of the paid creditors were not of those privileged persons. That is my second interrogatory to the minister.
When the diplomatic documents were distributed last year, you learned it was inconvenient to publish the diplomatic documents relating to the new government in Mexico; and of course we have received no government despatches to its agents in Mexico.
After that it was decided to publish the correspondence between France and the United States on Mexican affairs; but we have had nothing from our special agents, as Mr. Saillard and General Castelnau, who went to Mexico to investigate the acts of Marshal Bazaine.
Now that all is over, when things have come to a deplorable end, I wonder if they will not give us their history, to let us judge properly of what the government has done in this lamentable expedition. We ought to have all the facts of this disastrous expedition from, beginning to end. I opposed it at the first, and insisted that it could have but one result; and that has come.
At the close of M. Berryer’s remarks, M. Rouher, the minister of state, took the floor.
M. Rouher said: The honorable gentleman has put three distinct questions to the government :
Where are the fifty-four millions paid to our credit by the treaty of Miramar ?
What has become of the Mexican indemnities ?
Where are the political and diplomatic documents we need so much for the proper discussion of this Mexican question ?
I will endeavor to answer them to your satisfaction.
The question of the fifty-four millions in Mexican bonds, in execution of the treaty of Miramar, must be considered in a two-fold view: the use made of the money by the state, and the negotiation of the bonds by certain bankers. This sum was distributed as follows: forty millions were assigned to the budget of 1864 ; thirteen millions had been appropriated to the resources of the budget of 1865. M. Fould, in his finance report for 1865, said the loss on these bonds to the public treasury was about two millions of francs. But he only reckoned the interest on them.
Now how did this happen ? I will tell you. The first issue of bonds bore six per cent, interest. It was negotiated by an English house, assisted by a French bank. One year after, a second operation was effected, namely, an issue of five hundred thousand Mexican bonds, deliverable to the public at three hundred and forty francs.
M. Berryer said the issue was made by the same bankers that negotiated the first loan of fifty-four millions. The negotiation of the bonds of the second loan was not made with the government; it was made with the committee of the Mexican finances. I do not know what bankers were concerned in the operation; but it ought not to be imputed to the French government. After this loan, the question of converting the rentes of 1864 came up, and they were reduced to six per cent. The first loan had five hundred thousand bonds, and its conversion gave the same number of new obligations.
The conversion was therefore decided on, and the government had to change its six per cent, bonds, and to alienate the 174,000 obligations it held. This was begun in September, 1865. The bonds held by the state were disposed of at 300 francs per bond. The payment of the sum due the state was to be made in twelve instalments, and the bonds were to be delivered as these payments were made. Thus, when a twelfth of the credit was paid, the number of bonds representing the sums received were stamped and delivered to the concessionaires, so that the state only relinquished its bonds when cash was paid for them at its counters. I mention this to show that the bonds held by the state as security were not delivered as soon as the contract was made. The contract even allowed 18 months instead of [Page 601] 12 for the terms of payment; and, finally, a clause of the contract stipulated that in case of vis major—that is, if the Mexican government was overthrown by revolution—the treaty should be considered null. This treaty was executed between October, 1865, and March, 1866. Fourteen millions were given to the state, and bonds for fourteen millions were delivered to the concessionaires by the minister of finance. As early as 1866, M. Pinard announced officially that the concessionaires demanded the benefit of the 18 terms. The French government had made known its intention to withdraw its troops from Mexico at three periods: in October, 1866, in the spring of 1867, and in the autumn of the same year.
It is hardly necessary for me to state that the troops were all withdrawn at once in February.
M. Berryer. No; the United States was the cause of that; it was to save a quarrel with that country, and that would have been a very different thing.
M. Rouher continues. Just at that time there was a very sudden fall in the value of Mexican securities. The depreciation was so great the bonds fell to 140 francs, and I believe even to 120, and the concessionaires appealed to the clause of vis major in the contract, asking to suspend their payments and not receive any more bonds.
The business thus stopped, the minister of finance was left with all the signed bonds on his hands, except the fourteen millions which had been exchanged for paper. The government did not ask if profits had been made on the first loan; it had no right to do so. He examined the contract; he considered the political reasons for withdrawing the French troops, and he found it impossible to force the subscribers to the contract of 1865 to comply with their obligations, because they were overcome by superhuman force, and the bonds were worth nothing. Must I go into a discussion to justify this ? I do not think it is necessary at present.
M. Berryer’s first question needs no answer; it is sufficiently plain.
According to the terms of the treaty of 1864, a sum of twelve millions in six per cent, stock was appropriated to secure the payment of indemnities to our countrymen. The same treaty stipulated that the indemnities should be liquidated by a committee formed in Mexico, and composed of Mexican and French agents in halves; it also agreed that when the work of the committee was concluded, the total of the indemnities should be reclaimed from the Mexican government. But this arbitrating committee in Mexico had not full power; there was another committee in Paris to supervise its decisions.
After 1864 the Mexican committee went to work slowly; they were not punctual to the time fixed for the examination of questions for their consideration, and the French members had to act alone.
As to the twelve millions in six per cents., the titles were deposited in the hands of the minister of finance, who collected the interest for the first two years, and afterwards the capital.
In 1866, while the Mexican commission was attending to the liquidation of the indemnitary claims, the government thought proper to forfeit all the indemnities, and a convention was called for that purpose in July, 1866. That convention fixed the indemnity due our countrymen at forty millions. Sixteen millions had already been paid, and there remained twenty-four millions due which were never paid. In 1866, certain customs conventions mortgaged the revenues of the Mexican custom-houses to the French government. Our claimants will profit by that arrangement, and they will have their due portions.
Now I come to the third question. M. Berryer demands from the government the publication of certain diplomatic documents, and information about several missions at different times. In 1866 all the documents of interest to the house, concerning our relations with the United States and Mexico, were published, though refused at first for very good reasons.
If M. Berryer wants information in relation to Mr. Saillard’s mission, the government is ready to furnish it; and if he wants to know something about General Castelnau’s mission in 1866, we can give that too. In regard to diplomatic documents, I say there are none to furnish to the house at present; and at this grave conjuncture in which the sovereign of Mexico finds himself, it would be inconsistent with the interests of that government to publish documents detailing discussions of no interests now to our government, and which might be very harmful to Mexico.
The government is ready to discuss this serious Mexican question; but it is not ready to furnish diplomatic documents that would compromise the interests of both countries.
Such are the explanations I have thought proper to communicate in reply to M. Berryer’s interrogatories.
President Schneider. M. Berryer is now entitled to the floor.
M. Berryer. My thoughts were far from wishing to call for the publication of any documents that might injure the monarch we have led to Mexico: but the honor and dignity of the country demand an account of this deplorable Mexican expedition. I do not inquire into the quarrels that have arisen between the French authorities in Mexico and the agents of one whom we have tried to establish upon the Mexican throne. No; let us be silent on that point; his delicate situation demands it.
Fortunately, all that relates to communications from the French government to its agents in Mexico, the important instructions to Mr. Saillard, and the more important ones to General Castelnau, will be made known to us in time. They will throw much light upon [Page 602] the subject, particularly those showing the relations of the French government with the United States.
I will say nothing, provoke nothing, to injure the position of one who is now a prisoner, and has, perhaps, already received his sentence. I return to the finance question.
I am glad to learn that the values assigned to French creditors by the treaty of Miramar and the convention of 1866 are now deposited in the treasury; we will see that they are properly disposed of when the time for debate upon them arrives. I am also pleased to learn that reports of certain payments to uncertain creditors are false. I have not disputed the civil appropriations; they were carefully arranged, and for the proper sums. The arrears of the Mexican rentes were placed on the budget, to supply the unpaid capital; thus the amounts of the civil appropriations for 1864 and 1865 were balanced. Now about the loss caused by the negotiation of the fifty-four millions. From the report of 1865, that loss seems to be over two million eight hundred thousand francs; but when the sale was made it amounted to forty-two instead of fifty-four millions, making a loss of twelve millions.
But besides the public facts which were considered as a case of vis major, to relieve bankers from their obligations, there is the text of the contract, which the minister explains in a satisfactory manner; but I regret that the committee that accepted the consequence of the treaty did not have it before them, and give it to the house? there would have been no impropriety in that. I have asked myself if the bankers thus favored were not the same that negotiated the first obligations, to the number of five hundred thousand, at a profit of forty francs each, making a benefit of twenty millions in all. If they were the same that made such profits with a loss of twenty-eight millions to the state, they should not have been released from their engagements.
These persons’ names are well known to the public; it is not necessary to mention them; but I demand the production of the contract, that we may examine it and see how the state has lost so much by adhering to it.
The Minister of State takes the floor. Gentlemen, M. Berryer is surprised that your committee on supplementary credits for 1866 did not ask for the publication of the treaty of the 27th of September, 1865. The reason is very simple; the discussion of the credit bill for 1866 did not touch the treaty of Miramar and the 54,000,000 derived from it. I understand perfectly, however, why the committee ask information; they want it for discussion.
Now M. Berryer asks to see the treaty. I see no objection in making it known to the house; but what he has said in relation to certain bankers, I know nothing about it or them. When he said certain bankers had negotiated the first series of bonds, I remarked that their names might be known to the house, but I did not know them. I still say I am ready to give the treaty to the house. Now we will discuss the question of vis major.
M. Berryer has already noticed the declarations of the government, and I will not return to them; but I fear I was misunderstood in my answer to his third question. He seems to think I promised to publish instructions given to our special agents in Mexico. I say distinctly I made no such promise for the government; I will answer any questions of general interest that are put tome; but I must say to the house, it would be incompatible with the public good to publish certain correspondence between the French and Mexican governments. I am ready to answer questions here, but I must be excused from promises to publish documents that would benefit nobody.
As to the treaty, if you think it necessary in the discussion of the credits for 1866, in relation to Mexico, I am ready to produce it, and the government will abide by the house decision on the subject.
M. Berryer rises to speak. I was obliged to follow the committee in its labor. To render a proper account to the house of our financial situation with Mexico, the committee had to examine facts. Well, to facilitate this examination, I ask for all the documents. It is evident that upon this question of Mexico it would be difficult to form an opinion if no documents were furnished.
M. Roques-Salvaza now asked permission to speak; it was granted, and he said :
I do not ask for the floor to enlighten a question brought up by M. Berryer and thoroughly answered by the minister of state. But M. Berryer said it was the committee’s duty to call for the treaty and the documents relating to its execution. I have the honor to be president of that committee, and I must say I think this business does not belong to the committee, whose sole duty is to discuss the supplementary credits asked by the government for the year 1866. How the committee came to examine the question is in this way: Among the supplementary credits demanded by the government in the bill to be examined by the committee, there was a sum for the expenses to bring back our army from Mexico, and by a sort of instinct, a patriotic curiosity, the committee turned its attention to Mexican affairs in genera). It was an anticipation on our part, and it was exceeding our duty, and the government was justified in refusing documents we had improperly asked for. It happened in this way: We said they ask money for expenses connected with the Mexican expedition; we must look into it. What did the expedition cost ? This was natural enough. Yet the government might have said: Leave that case to the budget committee; ask no questions but such as pertain to your business. Why do you ask what the Mexican expedition cost ? All the budgets since 1861 have contained similar expenses; and it is more properly to the budget committee, rather than to the committee on supplementary credits, that we ought to furnish the information you ask.
[Page 603]That is what the government might have said. But we got the explanations asked for, and we found out something about the expenses of the Mexican expedition. We then said to the government: Here is the sum total of the costs of the Mexican expedition for six years. Was there no set-off to this account ? Were there no receipts of funds from Mexico ? You have issued two loans; we hear of losses by them, but of no profits. The government explained its receipts from Mexico, on account of the loans, and we find the sum of 54,000,000 reduced to 42,000,000, and finally to 14,000,000.
Now, I ask M. Berryer, whose loyalty is undoubted, how he can suppose it the duty of our committee to examine the different treaties and all the documents relating to the Mexican affairs ?
President Schneider here proposed to postpone the debate on the bill for supplementary credits of 1866 till the next day.
The proposal was accepted, and the house adjourned at 6¼.
Legislative assembly
M. Schneider, presiding. The order of the day is the deficiency bill for 1866. M. Glais-Bizoin is entitled to the floor.
M. GlaIs-Bizoin. I will not bring up the question of the Mexican expedition surreptitiously—an expedition fatal in every point of view and to all eyes except to mine; for I have always regarded that expedition as a providential occurrence, necessary to demonstrate to the country the perils of a personal government that has the care of the lives and fortunes of a great people. (M. Glais-Bizoin is called to order by the president, and told that he must not have that question as a pretext to attack the constitution and the situation of the government.)
M. Glais-Bizoin continues: If the opposition will not have a general discussion of the Mexican expedition on this occasion, I cannot be refused the privilege of saying what I think on the subject. I repeat then that the country was in need of this example to understand the dangers of a personal government, and that if it is not now aroused ― (He is again called to order. Continues:) I will not retract what I have said, and must repeat that, if the country had not waked from its torpor in 1863, the Mexican expedition would have been to the new empire what the Spanish war was to the first. I am convinced that, to carry out what some call the greatest thought of the reign, would require what we could not afford: and we would now have 80,000 men in Mexico, and war with the United States, and perhaps with the whole world, if we had attempted to carry it out. That is my belief, and I express it only to arrive at the following question: Among the credits asked of us I find this expense: Pay for the Austro-Belgian brigade, 4,600,000 francs; provisions, 867,500 francs; making a total of 5,467,500 francs. How this expense is accounted for in the report I cannot see. I will give the terms of the report, and the house may judge for itself.
After a cursory glance at our financial situation in Mexico, we must examine the items of the expedition outside of the appropriation for the fiscal year 1866 : “A sum of 5,467,500 francs was spent in pay for soldiers and provisions for the Austro-Belgian brigade and the counter-rangers. Another sum of 1,838,000 francs was spent for transports to follow the army. These expenses were to have been paid regularly from the Mexican treasury, but it was completely empty.” (We are not astonished at that.) “The security of our army forced the French government to assume these expenses temporarily.”
Such are the words of the report. The word temporarily brought me to my feet. I would like the government or the committee to tell me what temporarily means, and who is to pay these expenses in the end. But let me say that I am astonished that the French government assumed these expenses even temporarily. The French government did not enlist the Belgian and German troops for Mexico, and agree to pay for their transportation ? Why should it then take charge of them and pay for them when Maximilian’s funds fail ? Those unfortunate Belgians and Germans ought to be paid by the Belgian and Austrian governments, that were accomplices in this expedition by authorizing the enlistment of troops for it in their territory.
These remarks are for the house, and I now repeat my interrogatory, what does temporarily mean in the sentence I have cited ?
In the mean time, I demand the temporary rejection of the credit of six millions.
General Allard now takes the floor and says: I have but a word to say to this house. The word for which interpretation is demanded is very plain; the meaning is this:
On the 1st of May, 1866, the Mexican treasury was not in a condition to pay the Austro-Belgian brigade. The brigade was employed to help us in the expedition. Now, was it prudent or proper to let those troops be disbanded for want of money and provisions ? Certainly not. What did the French government do in the case ? What it has often done in [Page 604] such emergencies: it advanced to Mexico the funds necessary to pay that brigade. The word temporary means that those expenses were only an advance, to be charged to the Mexican debt.
M. Glais-Bizoin. Well, charge it then.
M. Ernest Picard then arose and said: I do not rise to discuss the question of the Mexican expedition. M. Berryer told you all about it yesterday; but I join him in his call for the treaties, conventions, and other documents relating to the Mexican loans, the bonds, and their holders and negotiators. I hope also that circumstances will permit us to have some of the diplomatic documents passed between the French government and its agents in Mexico.
The Mexican expedition has always been presented by the government as a necessity. It was said we had grievances to redress in Mexico; our countrymen were imposed upon there Then there must be other documents of great importance that have not yet come into our hands, and which we ought to have; documents containing the claims of French creditors, who believe themselves entitled to indemnity. I do not see why we cannot have those papers now, and I move to call for them. I hope the government will not object to furnish papers with the accounts of its creditors against Mexico. They certainly exist, as they gave rise to the expedition which was to redress the wrongs done our countrymen, and to obtain satisfaction for injuries, the legality of which we are called upon to decide.
And in speaking of Mexican creditors, I would like to know if the Jecker bonds have been paid; if by a treaty of the 10th of April, 1865 or 1866, the sum of $1,000,000 per year was not appropriated for the payment of that credit, and if the agents of the French government in Mexico did not make the arrangement.
This is all I have to say.
The President. The minister of state is now entitled to the floor.
M. Rouher, minister of state and finance. If the house desires it, I am ready to give the text of the convention between the grantees of Mexican bonds belonging to the treasury and the minister of finance.
After the documents relating to the convention are read, they will be inserted in the report of this day’s proceedings, and thus become accessible to all of you without being published separately. If the house consents, I will read the document, and then reply to M. Picard.
Here is the text of that convention:
“Paris, September 28, 1865.
“Between M. Achille Fould, minister of finance, on the one part, and M. Alphonse Louis Pinard, director of the Discount Bank in Paris, acting in his own name and as agent for French and foreign bankers, on the other part, the following agreement has been entered into: In accordance with a decision of the Mexican finance committee, dated 26th September, 1863, the titles of the Mexican foreign 6 per cent, debt, issued in 1864, shall be converted into obligations of 500 francs, with the consent of the holders, composing a second series, enjoying the same advantages as the obligations issued for the Mexican loan of 1865. As the treasury holds by the stipulations of the convention of Miramar 6,600,000 francs of the Mexican 3 per cent, rentes of 1864―namely, 5,400,007 francs of the war indemnity, and 1,199,998 of the indemnity due to French subjects—the above titles shall be converted into 174,603⅓ obligations, on terms stipulated by the decision of the 26th September, 1865, to wit, 144,857⅓ obligations for the public treasury, and 31,745 obligations for the indemaitaries.
“M. Pinard proposing to purchase said obligations, the undersigned do agree as follows :
“Only article.
“M. Pinard buys from the public treasury the 6,600,006 Mexican 6 per cent, rentes for 1864, giving there for 174,603⅓ obligations of 500 francs of a second series, enjoying the rights and advantages stipulated in the decision of the Mexican finance committee on the 26th September, 1865.
“This purchase is made at the net and firm price of 300 francs per obligation, possession to be given on the 1st of October, 1865.
“The sum of 52,330,000 francs shall bear interest at 3 per cent, per annum from the 7th November, 1865, and shall be paid in 12 equal monthly terms, the first failing due on the 7th of November, 1865, and the last on the 7th October, 1866.
“M. Pinard may have the privilege of anticipating the payments of one or more terms, and in such case shall be entitled to a discount of 3 per cent, a year. The obligations shall be given to the contractor, after being stamped. The chances resulting from the drawing of the lottery every six months, for the payment of the obligations, together with the primes and coupons, with interest up to the last payment on the 174,603⅓ obligations, shall belong by right to the contractor.
“Done in duplicate at Paris, on the 28th September, 1865.
“PINARD.
“Approved by—
“ACHILLE FOULD.”
[Page 605]Now comes the correspondence preceding that convention. We give M. Pinard’s letter first:
“Paris, September 28, 1865.
“Monsieur le Ministre: Before signing the contract by which I take at my risk and peril the 174,603 Mexican obligations in the public treasury, representing a sum of 52,381,000 francs, permit me to stipulate a reserve, the justice of which you will acknowledge.
“In case of vis major—that is, if the Mexican government is overthrown by a war or revolution—the contract shall be wholly rescinded, without indemnity to the party who is to execute it.
“In case I find a difficulty in disposing of the 69,000,000 of francs in Mexican bonds that I purchase in 12 months, you will extend the terms of payment to 18 months, adding, of course, the 3 per cent, per annum to each instalment,
“If your excellency approves of the reserves I mention, I beg you to notify me,
“I have the honor to be, &c.,
“PINARD.”
The reply on the 28th of September is conceived in these terms :
“Sir: I hasten to acknowledge the receipt of your letter of to-day, and to inform you I freely consent to the accidental conditions you mention therein; consequently the proposed contract, in cases you specify, may be rescinded or prorogued at will.
“Accept, sir, &c.,
“ACHILLE FOULD, “Minister of Finance.”
Those are the three documents I have thought proper to read to the house, in answer to one of M. Picard’s questions. He has put two other questions to the government: one relating to the indemnity due our citizens; the other relating to the Jecker claim.
In regard to the indemnity, all the papers are in the department of foreign affairs, and I presume the house will not call for them, as it will be unnecessary, and even useless. But if M. Picard wants information of any particular affair, he has the right to ask it. I can tell him the sum of French claims is about one hundred and fifty millions, and is now under consideration by the chief committee in Paris. As to private claims, it is impossible to give the details of the three or four hundred. I must make one observation on the third question; I do not think it right for members to take the floor on one pretext, and then slander the government.
In regard to the Jecker affair, I remember the calumnies against the government on account of it. The government had nothing to do with the negotiation of the Jecker credits in 1866; it was opposed to it, because it interfered with the execution of the convention of Miramar, and the guarantees and resources especially reserved for those governments that had their troops on Mexican soil.
(M. Picard rises to make an explanation.) The Jecker question was suggested to me by an article I read in a Mexican official paper, the New Era.
The Minister of State. I have enough to do to read French papers, without reading Mexican papers.
M. Picard. Perhaps the French government would learn something by reading more foreign papers.
As to the papers relating to the French indemnity creditors, I don’t want the originals, only the amount of the claims and their dates. The minister knows when we vote to appropriate money we ought to know where it is to go, and for what; and I am thus interested in knowing the number of creditors in this case, and the justness of their claims.
M. Glais-Bizoin. The government should not be so sensitive about the Jecker affair, for it is a historical fact that the convention of Soledad was broken on account of the exorbitance of French claims, and that was the principal one.
The Minister of State. Two words in reply to M. Glais-Bizoin. It is certain that the Jecker affair was mentioned at Soledad as one of the causes of non-agreement. It was a loan by the banking-house of Jecker & Co. to Miramon, the president previous to Juarez. It was so arranged that the bonds were receivable for custom-house dues. Now the Jecker house had disposed of a quantity of those bonds to our people, who offered them at the custom house in Vera Cruz and Tampico; but Juarez refused to accept them, and the consequent loss was the origin of that French claim.
Another circumstance occurred about this time. The house of Jecker held on deposit the funds of a French mutual aid society, by which our countrymen helped each other in case of distress. The house suspended payments, and the French company was ruined. On account of this, M. Dubois (de Saligny put in claims for these people upon the republic of Mexico. This was in 1861. In 1862, when France was adjusting its claims against Mexico, these claims were included, and it was insisted that the bonds should be received for custom-house dues at Vera Cruz and Tampico. And that is the way the Jecker claims came into notice at the Soledad convention.
M. Glais-Bizoin, What the minister of state has just said justifies my allegation. Infact, [Page 606] he does not deny that M. Jurien de la Graviere signed the convention in the name of the government, and therefore the government is responsible for the war with Mexico. because it refused to ratify a convention signed by one of our representatives, whose loyalty was undoubted.
M. Haentjens. I cannot consent to adjourn till I inquire of the government what is to be done for the Mexican bondholders.
M. GlaIs-Bizoin. They will be paid out of the civil list.
M. Haentjens. We are pressed with petitions on all sides from these bondholders, to know what relief they are to expect. As the constitution does not permit us to present these petitions here, I have sent them to the minister of finance. No answer to them has been received, and I would like to know if we are to get an answer before the close of the session.
M. Rouher. I beg the house and the honorable gentleman to excuse me from making any reply to the question proposed to the government, lest it become a pretext for discussion outside of this house.
M. Ernest Picard. If any gentleman wishes the floor to justify the votes that were given for the Mexican expedition, we will hear him.
M. Pagezy. If I discuss the Mexican question I will not do it as M. Picard does. I am not a friend of Juarez; I am a friend to France.
M. Picard. One would think so, to hear you speak against its interests. There is a requisition for five millions, made by the marshal commanding the French army in Mexico, and an overdrawing of three millions more charged to the treasury. There has been no settlement of these expenses, and a credit was opened by the government without the usual guarantees for deficiency credits opened by the executive power. Well, the government cannot deny the brutality of the fact; and as to the reporter who is pleased to see the end of the Mexican expedition, he tries to justify the illegality I am now denouncing. “The payment of 8,827,683⅓ francs effected by the minister of finance is less regular. It was not authorized by law or decree of transfer rendered by the Emperor in the council of state. But to justify the government we must allow its council decree to suffice for ordinary expenses; but it is quite different for expenses incurred in distant countries.” It is very convenient to enact decrees, and then excuse their execution by alleging that they concerned expenses incurred in distant regions. I think there are causes to which we must yield; and when they concern the fate of our army I will not dispute them. We might have foreseen this expense in 1866; the condition of Mexican finances was known; the Mexican government was wavering; it could not pay its troops; and yet you kept all this secret, and now you see the fatal consequences.
M. Rouher. The other Mexican expenses that have not been settled by transfer decrees are two; one is not properly an expense, but a loss to the treasury, for which the government is obliged to ask a credit from this house; the other is a war expense. The loss was 3,500,000 francs. Ever since the first Mexican loans that government has had funds arising from them in the hands of the Mexican finance committee, in Paris, and it was necessary to send these funds to Mexico. Now the French government had a service organized to carry funds from France to Mexico for the support of the army there. It was arranged between the two governments that the French government should send funds to Mexico, and receive drafts from the government there, to be paid by the proceeds of the loans here. The two last drafts have not been paid by the Mexican committee, causing a loss to the treasury. For a loss of that kind the government could not proceed in the regular way, and open a credit by a transfer decree. There is no credit opened yet, and the one now proposed to the house is to reimburse the treasury for that loss. As to the five millions forming another element of the eight millions, the documents submitted will show all about them. Marshal Bazaine, to help the Mexican government, asked a subsidy of two and a half millions of francs per month from France, and the convention was immediately executed, though the marshal had reserved the ratification of the French government. As soon as the French government was informed of this state of things, it did not think proper to ratify what had been done, considering the condition of Mexico, and it instructed Marshal Bazaine to stop the execution of the convention. Thus, two and a half millions were paid the first month, and the same amount the second. I ask the house if this is not all very natural. Marshal Bazaine had to yield to necessity, and the French government did its duty.
M. Picard asked why the five millions were not asked of the house, and why it could not be seen the Mexican treasury was empty. The French government was so far from foreseeing these events, and so far from believing they would require a subsidy from France, that it gave immediate instructions to annul the convention and stop the monthly payments of two and a half millions of francs.
Such, gentlemen, are the explanations I wanted to make to this house. I have not referred to the muskets; I leave that subject to General Allard to explain, if the house requires any information on the subject.
The Minister president of the council of state. Gentlemen: The thirty-five millions of Mexican values do not appear in the budget of 1865. In the budget of 1865 we find twenty-five millions as the indemnity stipulated by the treaty of Miramar. The final account of 1865 shows that this sum of twenty-five millions was paid in specie to the treasury. There is another sum receipted in the budget of 1865, namely, titles of various sorts, amounting to [Page 607] thirteen millions. In the amended budget for 1865 it was reduced to ten million eight hundred thousand francs. Of this only two millions have been paid, and eight millions remain. So, out of the thirty-five millions coming; from Mexico, twenty-five millions of the Miramar indemnity have been paid; two millions of the ten were paid, and over eight millions remain in the vaults of the treasury.
These facts being established, I will now show the house what I said about the surplus receipts of 1865 is also without doubt. The excess of receipts for that year is twenty-one millions, as you know; 12,224,000 of this sum was placed to the budget of 1866, and over nine millions remain; so that, if the eight million one hundred and fifty-seven thousand francs of Mexican titles are never paid, the nine millions will be reduced so much, and there will be more than one million left in excess of the receipts for 1865. Such is the explanation I had to make to M. St. Paul.
M. de St. Paul. Ah, now I have the general account of the finances of 1865, and we find it amounts to 35,857,000 francs of Mexican valuesl My random question was not lost on the minister, and I hope the house is satisfied with his explanation. I did not arise merely to kill time; I wanted to get information, and I have succeeded in obtaining it.
No. 1.
On Friday last, after a warm debate on various subjects, M. Berryer brought up an incident which is the preface to debates on the budget. This was nothing, less than the Mexican business—a sad affair, so mixed up with our finances that we find it in every daily discussion, in the final account of 1865, in the amended budget of 1866, in the supplementary credits for 1867, in the provisional budget for 1868.
However unpleasant it may be to the government and its advocates, the Mexican question must be resifted this year, its finances adjusted, and its results ascertained. The time for its liquidation has come, and it will be the great feature in the discussion of the items in the budget.
The amendments to the supplementary credits of 1866 have caused M. Berryer to doubt. The treasury report shows that out of fifty-four millions in Mexican bonds fourteen millions were sold, and 95,232 bonds remained, of no value. Now, M. Berryer tells us that M. Fould, in his report of 1865 to the Emperor, says those bonds were all sold for forty-two millions of francs, and the amount was divided between the two budgets. How is it then that the treasury still has two-thirds of those obligations, when it was reported that they were all sold ? Did the minister of finance tear up the contract and relieve the bankers from their obligations as soon as the business began to turn against them? But M. Berryer says the same bankers bought the bonds from the treasury that had issued the 500,000 a few months previous. The first operation was a profitable speculation for them; was it just then to secure them from loss in the second affair? By what authority did the minister rescind the contract ? and was its recision justified by circumstances ?
Such are the grave questions that M. Berryer has suggested in asking for the papers to be laid before the house. We think he has done much good to the bondholders. The documents were read next day by M. Rouher, and they have been published. The result is, that in September, 1865, the treasury held, by the treaty of Miramar, 174,603 bonds, 142,857 belonging to the state, and 31,756 reserved for indemnitaries. These titles were acquired at the rate of 300 francs, by M. Pinard, acting in his own name, as agent for a company of bankers and capitalists, both French and foreign. The sum was to have been paid in twelve equal monthly instalments, to begin on the 7th November, 1865.
As a complement to that contract, dated 28th September, M. Rouher read two letters between MM. Fould and Pinard, written before the contract was signed. M. Pinard’s letter stipulates that, “in case of vis major—that is, if the Mexican government is overthrown by a war or revolution—the contract should be rescinded.” The contracting party reserves the right “to extend the term to eighteen months, instead of twelve, in case there was a difficulty in selling the bonds in that time.”
In his answer the minister “acknowledges the receipt of the preceding letter, and accepts all its conditions.”
These documents show the real nature of the negotiation. It is plain there is no sale where the purchaser accepts the risks, but a conditional bargain, or more properly, a commission business.
The celebration ended with September; the day after M. Corta’s and M. Rouher’s speeches 500,000 bonds were taken by the public, and the next day their value was doubted. In July these bonds were quoted at 310, that were to have risen to 330 in September.
It did not turn out as expected: in fact, it was a simulated sale—one of those operations in which government appeals to the devotion of bankers, who were very willing to lend their credit, experience, and influence to government; but they were not willing to do more, and [Page 608] wanted a chance to escape from loss, if the operation promised to be unprofitable, and, as far as they were concerned, they were perfectly right.
After four monthly instalments had been paid, amounting to fourteen millions francs, these bankers invoked their right to suspend. Was it a case of vis major ? The Mexican government had not yet been overthrown by war or revolution. True, it had received a death blow: the United States veto had been pronounced. The vaunted resources of the Mexican government suddenly diminished; the bonds fell into disrepute. On the 15th of January, 1866, one month before the suspension, was sent the noted despatch to the French minister in Mexico, saying the French government was tired of encouraging loans, and the Mexican empire must rely upon itself. It had already been determined to recall the French troops. Could the minister, who knew that, allege a case of vis major ?
M. Berryer says the bankers ought to have been compelled to comply with their contract, because they had made a handsome speculation out of the first loan, having bought at 300 and sold at an average of 335, during the last four months of 1865.
The bonds finally fell to 120, and then the government had to give up all hope of compensation.
These financial miscalculations would not trouble us much if they concerned only the treasury and a few wealthy speculators; but the government must know that bankers don’t buy bonds to keep; they are bought to sell, arid the money comes out of the people’s pockets at last. The trusting and unarmed multitude must suffer; and the government must soon know this from an investigation that has been made, and will soon be laid before the legislature.
Now, when the discredit of the Mexican bonds is evident, the government uses all its forces to raise them in value, not on Maximilian’s account, but for the benefit of the public treasury, and to balance the future budget. Is not that a strong argument for the bondholders, when their case shall be called before the corps legislatif ?
No. 2.
The discussion of the budget begins after to-morrow. It promises to be lively, and the Mexican question will certainly give zest to it. After the dialogue on Saturday between M. Haeutjens and M. Rouher, it is evident that the house will be called to judge of the situation of the Mexican bondholders.
The Mexican expedition is a political disaster; if it is also a financial disaster, as some think, its weight upon the government will be grievous. It is not only a question of policy, but of honor. Let us look at the facts.
We find a government trying to regenerate Mexico politically and civilly by the sacrifice of French lives and French money. The enterprise was silly, and the obstacles great. The debt of Mexico was so great and its credit so low, its bonds could be had in London at 20 per cent., if any one wanted them. As to the Archduke Maximilian, he had to leave Miramar for debt. Now money was wanted everywhere, and it could be raised only by loans, and these loans could only be negotiated in France. Conceived and patronized by the government, the plan succeeded. Let us see how.
On hearing of this proposed loan, the English creditors, sadly in want of their pay, called meetings and declared theirs was the privileged mortgage on Mexico. To quiet them, they were promised that the first twenty-four millions of the loan should be sent to London, and the sum was sent.
We said Maximilian was in debt, and could not leave Miramar and accept the throne of Mexico without some arrangement with his creditors. To help him out, eight millions of the first loan were sent him from Paris.
It was well known that Mexico never paid its debts; but its credit was to be raised by promises to pay the interest of old debts by funds from the new loan; so a sum of forty-nine millions from the two loans was to be reserved for that purpose.
In execution of the convention of Miramar, the future emperor decrees a finance committee of French, Mexicans, and English; and to show the French prominence the committee was to reside in Paris, and M. Germiny, a senator, ex-minister of finance, ex-governor of the Bank of France, should be its president and represent the French creditors. A duplicate of the ledger was to be sent to Mexico, and the original was to remain in Paris. All the decrees of the future emperor were published in the Moniteur just like French decrees.
The loan had a good puff in spite of prudent men who advised circumspection, and was successful.
M. Berryer opposed it in the assembly, because France seemed to encourage it according to the prospectus. M. Rouher is indignant at the doubts about Mexican resources, and does all he can to show the solidity of the loan. But he was mistaken; for, in less than a year, [Page 609] on the 10th. of March, 1865, he declared to the assembly “that new resources were indispensable to complete the conquest.”
A second loan is determined on, to be managed by M. Germiny and M. Corta, who had been sent to Mexico to examine the resources of the country; and it was made under the superintendence of the minister of finance. On the 30th June, 1865, we read in the Moniteur: “Messrs. Barron, Bourdillon, Count Germiny, and M. Corta have arranged the conditions for the new loan.” The terms being arranged, the whole army of French financiers is brought into the field to insure its success. It was to have been issued on the 22d of April, but the bankers that engineer it are anxious to know if the government will not let its troops remain in Mexico until Maximilian is firmly seated on the throne.
On the 10th of April the subject is discussed in the assembly, and M. Rouher says :
“We are reproached for encouraging a Mexican loan when the finances of the country do not justify it; but M. Corta has just given you a glorious account of the resources of t at magnificent country. Have no care; Maximilian will restore financial prosperity to the country, and furnish incontestable guarantees to those who trust him with their money. I repeat, this expedition is a great affair. By it France will conquer the civilization of a great country. Let its flag float a few months longer, till all resistance is subdued and the bandits overcome; a few months more will do—the end will be gained; pacification will be complete. The French army must not return to our shores till its task is accomplished, and it has triumphed over all resistance.”
(Applause followed this speech.) M. Jules Favre protests against the minister’s eloquence that takes the place of facts. He is grieved to think that France, in the present condition of Mexico, would lend “its aid, its officials, and its money, to be engaged in unheard-of speculations.” But the protest was vain, and the loan was opened on the 22d of April, with the consent of the minister of finance and all government agents. Before the close of the third day the 500,000 obligations were subscribed for, and 170,000,000 deposited with the Mexican commissioners by the French public. Such were the circumstances that opened, continued, and closed that loan. The influence of the government was seen and felt in every way, and therefore it is considered responsible. It not only facilitated the loan; in fact it issued it. But for official declarations and formal promises it would never have been taken; and, moreover, a large portion of the funds went to the state. There is no doubt about that. How then can the government refuse a just, equitable, and complete reparation to the bondholders ?
Do not say they were tempted by high interest. Instead of using his seducing eloquence on this occasion, M. Rouher should have said: “This money we ask yon for is to pay English creditors of Mexico, and Maximilian’s debts;” then, do you think subscribers would have been so abundant and eager ? No, certainly not. All that urged them to accept the loan was the government, and the government should not now resort to chicanery to avoid responsibility. Such an act by a person would be considered mean, and certainly would not be accepted by the government.
Such is the written opinion expressed -by M. Marie, and concurred in by Messrs. Allon, Ploque, Cremieux, and Leblond. These eminent jurists say:
“If the government has taken such a part in these loans; if it not only facilitated them, but realized them by its sole influence; if it pledged its name, the name of France, to such; an extent as to make the public believe that France favored the loan, why should it not be responsible for acts done upon this encouragement ? The lenders, now ruined, might say: ‘I believed in you; I believed in your assurances, in your fine speeches, in your promises, in France, and now I am ruined!’ Could you reply: ‘You were wrong; you should have believed in the opposition; for though my authority was imposing my language was deceptive; my responsibility is null; that is all.’”
No, that is not all. The conduct and influence of the government persuaded capitalists. To them its declarations were positive and decisive; therefore, between the government and the bondholders there is a real responsibility in every sense of the word, and there is a question of loyalty.
No. 3.
Nothing is more unpleasant than this Mexican business, in whatever way you consider it. M. Berryer has handled it gently, and yet He called it “a shameful affair, where advantages were taken over poor people, and complaisance and condescension shown to contractors.” It is very true these Mexican loans were a loss to the purchasers, and a gain to the brokers. The operation was so managed that the public and the state lost, while the brokers realized millions.
M. Berryer, who has followed this Mexican affair step by step, has clearly shown all the [Page 610] errors of the administration, and their deplorable consequences. Since M. Rouher’s explanations, and the publications of the contract between M. Fould and M. Pinard, we can understand the progress of the negotiation. It certainly does no honor to the sagacity of M. Fould’s administration.
In fact, from the stipulations, all the chances were against the state and the public, and in favor of the managers of the loan. We are surprised to see the treaty give the bankers the privilege of extending their payments to 18 instalments from 12, and permitting them to cancel their obligations in case of vis major.
This negotiation of Mexican bonds is a strange affair. The more we study it the less can we understand how M. Fould managed such an important operation. In explaining this episode to the house, M. Berryer has rendered a signal service to the public. It is a memorable page for the hard history of the Mexican expedition, for documents about it are scarce, and we have to hunt hard to find any.
M. Berryer had the Fould-Pinard contract published. It was well; but we fear he will not be so lucky with the diplomatic documents. M. Rouher declared he could furnish none to the house at present, and he added: “In the serious predicament where we find the sovereign of Mexico, it would not be proper to publish documents showing coolness, conflicts, and discussions, now of no importance to either government.” M. Rouher also said: “The government has not thought proper to publish the diplomatic correspondence, or any documents that, under present circumstances, can be of no use or benefit to either government, but might compromise ours very seriously.”
We regret this suppression the more since the last news from Mexico says Maximilian is no longer in danger, and that he will return soon from that sad journey. We are, moreover, astonished that the government that has assumed such great responsibilities in times past should now dread the publication of diplomatic notes that might enlighten the close of this expedition. M. Rouher ought to know that those refused documents are of much less interest to Mexico than to us, for they know much that has been concealed from us, and that those documents would have revealed. Does M. Rouher suppose, under present circumstances, the instructions given to Marshal Bazaine, or to his agents, would be of no interest to us ? If he does, he is very much mistaken. The Mexican expedition is more interesting to France now than it ever was, and the manenr in which it has been carried on and concluded is of the greatest significance in public opinion. We know how the Italian, Roman, and German questions have been managed: why should we not know all about the Mexican question? We cannot imagine why M. Rouher deems its details of no importance to France, when nothing could better enlighten us on an expedition against which foreseeing public opinion had pronounced, and which it would have prevented if its voice could have been heard, or the free press had served it better. The opposition so bitterly complained of finds in these late revelations, scantily obtained, the proof of the correctness of its views; the genuineness of its patriotism, free from all party spirit.
M. Berryer says with truth: “In reflecting upon the disastrous consequences of that expedition, and on the victims it made, I cannot forget that it was chimerical, and that I opposed it from the first, declaring that it would end in disaster; and General Prim said so at Vichy, the very man who lately tried to revolutionize Spain, his native land.” On listening to that sad speech everybody said: “If we had heeded M. Berryer, we would not have had that deplorable expedition, and the public would not now be called on to furnish the enormous sums it has cost, and to repair the deficit caused by the lamentable Fould-Pinard transaction.
No. 4.
The interpellations presented by M. Berryer, on the subject of the supplementary credits for 1866. contain a foretaste of the debate to which the Mexican question must soon give rise. We set it down at once that if the explanations of the government are to resemble the answer by which M. Rouher tried to satisfy M. Berryer, a very strong light will not be shed abroad by them. What did M. Berryer ask ? That the diplomatic documents promised at the beginning of 1866, by a note in the Livre Jaune, be at last communicated. Last year, to postpone this publication, the state of our relations with the United States was invoked; this year the eventuality of a conflict with the American Union has been set aside by the return of our expeditionary troops, but another motive for discretion has imposed itself on the willingness of the government—it is under consideration not to aggravate the position of the ex-emperor Maximilian. According to M. Rouher, if the diplomatic papers exchanged between Paris and Mexico were to see the light, the unfortunate prince whom we have taken to Mexico would find himself more seriously committed than at this moment. This appears to us to be difficult enough to admit, but, in fine, the apprehensions of the minister of state spring from a good disposition, and we understand exactly that M. Berryer has not pressed the matter too much. What is less easy to comprehend is that at the very hour when M. Rouher was preoccupied with the destiny of Maximilian he should have [Page 611] attributed to him the quality of “sovereign of Mexico.” It is plain also that Mr. Romero recently wrote that the greatest danger to Maximilian consisted in his title as pretender, and in the fear of the usage he would make of it at a later day should he recover his liberty. If, therefore, the speech of M. Rouher should reach Mexico before the fate of the ex-emperor should be decided, it would very probably produce upon men’s minds the most dangerous effect. “See,” the partisans of rigorous measures would not hesitate to say, “this man, who is our prisoner, is always regarded by the powers of Europe as in lawful possession of the sovereignty of our country, and we ought promptly to get rid of him if we do not seek to draw upon ourselves fresh invasions.” But let us pass on from this detail to another portion of the interrogation put by M. Berryer.
It is remembered that by the treaty of Miramar, the emperor Maximilian, besides the annual indemnity of twenty-five millions for the maintenance of the French troops, acknowledged himself indebted to France in a sum of two hundred and seventy millions for the first costs of the expedition. At the close of 1864 our government was in part reimbursed with Mexican bonds representing, at the rate of sixty francs, a capital of 54,000,000, on which 40,100,000 francs were appropriated to the budget of current expenses, and 13,900,000 francs to the budget of 1865. In announcing this combination, M. Fould said, in his report: “The situation of the treasury admits of awaiting for the negotiation of Mexican bonds of circumstances more favorable, which every day leads us to believe will soon develop themselves.” These lines were written on the 9th of January, 1865. A year later M. Fould said: “These bonds have been negotiated since the close of the session, and in taking account of arrearages received, the treasury has had to bear, in this negotiation, a loss of 2,542,000 francs. Strictly this should have been divided between the budgets of 1864 and 1865; but the situation of the budget of 1864 not permitting the weakening of these resources, I have charged all the loss on the budget of 1865, which, in consequence, will only receive 11,328,000 francs, in place of 13,000,000 francs.” The lines are dated December 20, 1865.
Thus, at that epoch, the minister affirmed that our Mexican portfolio was sold at a simple loss of 2,000,000, and a sum of 11,000,000 seemed acquired for the current expenses. This sum of 11,000,000 corresponded exactly with an excess of receipts for 1865—an excess which was the occasion of the warmest effusions from a devoted press. Never had more brilliant proof been given of the prosperity of our finances. We shall now see what should be thought of all this enthusiasm.
A year passed away. There is a fresh report from M. Fould, (December, 1866,) where we read: “The Mexican bonds, which had been negotiated, and which figured in the budget of 1865 for the sum of 11,358,000 francs, have only been in part collected. Circumstances of great force, invoked by the concessions, have not allowed them to execute the conditions of the contract.” We seize here, and at the earliest moment, the manner in which the mysterious and fantastic operation, called the equilibrium of the budget, is carried out. In his report of December 20, 1865, the minister had affirmed that the Mexican bonds were sold;he had only forgotten to say they were not paid. It is in this manner that the excesses are conquered.
On reading, six months ago, the report of M. Fould, the importance of the fact announced by that document became patent to us. We said (Gironde of December 27) all the papers must be placed before the eyes of the members and carefully examined. Then, attempting to divine in anticipation what had passed, “The government (we added) has, without doubt, sold its Mexican bonds to a financial company, which, not having been able to put them of t at the exchange before the great fall in price last summer, must have sought for a revision of its contract for purchase. However, we regard it as incontestable that the legislative body alone is competent to decide a question of this importance. It is, therefore, indispensable that the government should produce the contract before the chambers, and request it to pass upon it. If the company that bought the bonds has really suffered a loss by compulsion, and one not to be foreseen, the chamber will estimate the return which equitably should be made to it. It is important that it he not forgotten that it is money from contributors, for in case of return, the imposts must bear the burden; but if the company had gone into a speculation, dependent on events; if the fall was with the estimates of ordinary prudence, upon what principle, or by virtue of what law, could there be imposed on the treasury a loss which would not have any connection with it ?”
These are precisely the claims which we read of, that form the chief part of M. Berryer’s speech. More fortunate than on the question of diplomatic papers, the eloquent orator has obtained from M. Rouher the textual communication of the treaty declared to be annulled by M. Fould. The reading of this paper will prove to our readers that when we reproach the administration of the finances with having incompletely informed the legislative body, we were within the bounds of truth. It is, in fact, evident not only that 54,000,000 of Mexican bonds were not paid, when M. Fould placed them in the line of account of value received, but even that they really were not sold. As M. Berryer has announced the intention to return to this subject in the form of an amendment, we will not dwell on it any longer to-day; neither will we attempt an estimate of the remarks of Glais-Bizoin, Picard, and St, Paul, on Mexican finances. The debate, although earnest and interesting, is not, to speak truly, gone into in a manner sufficiently direct, and it was agreed to drop the discussion until that on the budget of 1868 shall come up.
No. 5.
Scarcely a day passes in the legislative assembly without a proposal to suppress the address.
Not one-fourth of the time has been spent in useful legislation. The unfortunate Mexican question was the chief reason for that proposal; yet it will be hard to avoid that question.
Day before yesterday M. Berryer asked explanations of the government on the Mexican loans, and operations to which they had given rise.
I have often mentioned a sum of over 40,000,000 in the public treasury, received in payment from the Mexican committee. That sum, in bonds of the last Mexican loan, has never been realized. The French company that made such profits by that loan would have nothing to do with the bonds in possession of the state. This shows that there are certain institutions that issue bonds, but don’t keep them or buy them.
M. Berryer was surprised that the discount bank, after profiting so much in issuing the Mexican loan, should refuse to take the 42,000,000 in bonds that remained in the treasury. M. Rouher handed in the treaty, signed by M. Fould and Pinard, director of the Comptoir d’ Escompte, and the most important feature in it is that the institution should be released from its engagements, in case of vis major—that is, if a revolution overturns Maximilian.
The Comptoir d’Escompte refused to receive, on its own account, the Mexican bonds long before the Mexican revolution, for it saw Maximilian’s throne tottering. In fact, as there has been no vis major, the comptoir is liable to prosecution. But is it reasonable to force a financial institution to execute contracts that would ruin it, and at the precise time when the government had resolved to withdraw its troops?
It was boasted that the Mexican expedition was a glorious affair, the aim of which was to elevate, reorganize, and civilize Mexico; but M. Berryer has shown it was got up to make money—was simply an operation of avaricious speculators, whose sole cry was money from the first. It was said our countrymen had suffered from spoliation and must be indemnified, and our exorbitant demands caused England and Spain to quit us at Soledad. It was an unfortunate demand that brought on a disastrous war, without honor or profit to anybody. Not only the French creditors have lost by it, but the government has spent immense sums for nothing.
The consequence was most unfortunate, and amounts to this: To have our creditors paid their entire demands againts Mexico, money was wasted, blood spilt, honor tarnished, and poor people ruined by two Mexican loans got up in France.
M. Rouher was not as explicit as he might have been; he was troubled by M. Berryer’s questions. There is a Mr. Jecker, who is a personage of considerable importance in the concern. He was transformed into a Frenchman to take part in the French claims. His little claim was only 50,000,000 !
The minister of state was much embarrassed yesterday when M. Picard mentioned Mr. Jecker’s name, and he confessed that Jecker had caused much trouble to the government. When M. Haetjens asked him if the government intended to do anything for the Mexican bondholders, he refused to reply positively, because he feared his words would cause trouble outside of the assembly. Such a reply is unworthy of an imperial government. Too many interests are involved to speak so lightly of such a serious affair. M. Rouher’s answer will certainly be misinterpreted. People will think the government intends to do nothing for its victims, whose maledictions will certainly shower upon it. Our members are receiving thousands of petitions from Mexican bondholders. M. Haetjens has told you so. This question of reimbursing these men causes as great a sensation as the military bill.
The government asserts, through M. Rouher, that it is not responsible for the Mexican loans, but admits that these loans were encouraged and the bonds issued by a committee appointed by the Mexican government, under French patronage, Now, can any one deny that the loans were encouraged by the newspapers, by public agents of France, by its receivers general, by our army that went to Mexico, and by setting Maximilian on the throne of that country ?
No. 6.
What Mexico has cost France.
[Annexed to Mr. Romero’s letter of July 12, 1867.]
The following statement of the outlays and receipts of the French government on account of Mexico has been furnished to the committee of the corps legislatif intrusted with the examination of the budget:
[Page 613]OUTLAY.
| Year. | War department | Navy department | Treasury department | Total. |
| Francs. | Francs. | Francs. | Francs. | |
| 1861 | 3,200,000 | 3,200,000 | ||
| 1862 | 27,119,000 | 35,902,000 | 379,000 | 63,400,000 |
| 1863 | 72,012,000 | 24,606,000 | 1,001,000 | 97,619,000 |
| 1864 | 51,732,000 | 15,667,000 | 1,675,000 | 69,074,000 |
| 1865 | 29,342,000 | 10,583,000 | 1,480,000 | 41,405,000 |
| 1866 | 41,792,000 | 13,798,000 | 9,567,000 | 65,147,000 |
| 1867 | 9,993,000 | 3,117,000 | 200,000 | 23,310,000 |
| Total | 231,990,000 | 116,873,000 | 14,302,000 | 363,155,000 |
RECEIPTS IN 1864.
| Francs. | ||
| Six months of the annual reimbursements stipulated at Miramar | 12,500,000 | |
| On account of the Vera Cruz railroads. | 1,500,000 | |
| Proceeds of the sale of 47,625 Mexican imperial bonds | 14,287,000 | |
| [Note.—There still remain in the portfolio of the treasury 5,232 bonds.] | ||
| Arrears on amount of bonds | 5,400,000 | |
| Total in 1864 | 33,687,00 | |
| RECEIPTS IN 1865. | ||
| Annual reimbursement stipulated at Miramar | 25,000,000 | |
| Arrears, &c | 2,700,000 | |
| 27,700,000 | ||
| RECEIPTS IN 1867. | ||
| Drawn from Mexican customs | 588,000 | |
| Total receipts | 61,975,000 | |
According to this statement the excess of outlay over receipts will amount to 301,190,000 francs, without taking into account the portion of the 31,713,000 francs, extraordinary expenses, which belongs to the Mexican account, estimated at 13,000,000 francs. We must also add the loss of materiel, which, up to 1864, amounted to 22,500,000 francs, and the expense of bringing home the expeditionary corps, about 20,000,000 francs. Commenting on these figures, the Courrier Français asks, “Where is the capital of French subjects—sunk in that expedition, or confiscated and lost in consequence of its failure?” This is what tables of the budget, however exact they may be, can never tell us, but which are calculated at something over 250,000,000 francs; and what makes us momentarily expect to see broken-down merchants, who were well off and happy until our intervention, and to whom our victories have brought nothing save ruin and the gloomy recollection of their past prosperity.