Mr. Plumb to Mr.
Seward.
No. 92.]
Legation of the United States,
City, of Mexico,
March 23, 1868.
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,
Hon. William H. Seward, Secretary of State, Washington, D. C.
[From the congressional report
published in the Diario Oficial, city of
Mexico, March 20, 1868.
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.
