Mr. Plumb to Mr. Seward.

No. 92.]

Sir: I have the honor to transmit to the department herewith, copy and translation of remarks made by the minister of treasury, Mr. Romero, in the Mexican congress on the 17th instant, on the subject of the payment of interest on their public debt.

The provisional fiscal estimates were under discussion, and the second article, as proposed by the committee, provided that the excess of the public revenues, after covering the amounts assigned to the different departments of the government, should be applied to the payment of the interest on the consolidated national debt and the cancellation of the floating debt.

This was opposed by Mr. Romero, in the name of the government, who urged that in place of paying the interest the government should be permitted to permanently continue the system of public auctions for the buying up of their bonds, such as have recently taken place, and to which I referred in my dispatch No. 87, of the 12th instant.

The fiscal estimates, I believe, go over to the next session before being finally acted upon, but this manifestation of the disposition of the executive may not be without importance both as regards the action of congress and the bearing it may have upon the foreign relations of this republic.

I am, very respectfully, your obedient servant,

E. L. PLUMB.

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

Session of the 17th of March.—Translation.]

The Minister of Treasury, Mr. Romero. * * * * The government also believes that it is its duty to state, that the terms in which article 2 of the project of law (provisional fiscal estimates) is conceived, lend an ambiguity, which it would be convenient to explain and correct, before it. has the force of law. According to the literal and more evident tenor of said article, it should be understood that the auctions for the cancellation of the public debt that have been decreed by the government, and that are taking place with such good results, cannot continue. The article states that the excess that there may be in the public revenues, after covering the portions assigned to each department of the government, shall be applied to the payment of the interest on the consolidated national debt and the cancellation of the floating debt. As the debt, called until now Spanish and English, is represented by bonds which bear interest, it appears natural to classify it as consolidated debt, and in this case nothing more could be done with it than to pay the interest, and for the same reason suspend the auctions for its cancellation, which have given so good result until now.

Nor will it be possible to assign any sum to the cancellation of the national floating debt, supposing that there has to be paid first the interest on the consolidated debt, and this, in which would be included, besides the debts represented by the bonds of the extinguished Spanish and English conventions, all the bonds of the debt called the interior debt, and those of the debt contracted in London, which alone amount to a very considerable sum, would not leave of course anything with which to attend to the cancellation of the floating debt, which would result in evident prejudice to the national, creditors, and especially to those of a privileged character.

The government would consider it a grave evil if congress should direct the suspension of the auctions for the cancellation of the national debt. In the two months in which these have been tried, they have produced the most satisfactory results.

With great gain to the creditors, and evident benefit to the treasury, there has been cancelled up to now more than half a million a month of the public debt, and if this [Page 437]can he continued, at the end of a few years the debt will he seen very considerably reduced or entirely extinguished.

A member of the committee has stated informally to the executive, that, even if article 2 should be approved in the terms proposed, the auctions for the bonds of the extinguished Spanish and English conventions being terminated which consolidated them and gave them the character of an international debt, not having become again debts exclusively national, in the adjustment of the interest and cancellation of which the government does not propose to admit the intervention of any foreign power they have ceased to have the character of consolidated debt and have become again floating debt.

This interpretation appears to the government very forced, and exposed To very serious inconveniences, and for this reason it would prefer without hesitation, if such is the disposition of the committee, that another wording less ambiguous should be adopted, and in which the intention of the chamber might be more clearly seen.

Although these objections may be considered as directed against certain particular articles of the project of law, and not against the project in general, I have believed it convenient to make them now, with the reservation of amplifying them when the project of law is discussed in detail, in order that they might be had in view in deciding whether the said project should be admitted to discussion or not.