No. 484.
Mr. Foster
to Mr. Fish.
Mexico, May 29, 1874. (Received June 17.)
Sir: In my dispatch No. 98, January 24, I stated the action of the Mexican Congress in revoking the railroad concession to Mr. E. L. Plumb, as the representative of the International Railroad Company of Texas, and in granting a similar concession to a Mexican company. The time fixed for filing the bond for the faithful execution of the contract expired on the 30th of last month. Previous to that date the company applied to Congress for a modification of the contract, extending the time for filing the bond, and confining the concession for the present to the construction of a road from the city of Mexico to Queretaro. The President, in the mean time, notified the company of the near approach of the time [Page 752] fixed for filing the bond. Pending the consideration in Congress, the time expired with a failure on the part of the company to file the bond; whereupon the President declared the concession forfeited and the contract annulled. The company thereupon formally dissolved its organization. Congress will adjourn on the 31st instant without granting any new concession, and the construction of new railroads in Mexico is postponed to a future period.
The cause alleged by the Mexican company for its failure to comply with the terms of the railroad concession was the opposition of the English bondholders in the money markets of Europe. In my dispatch No. 94, January 15, I gave an account of the visit to this city of Mr. John L. Geiger, of Loudon, as representative of the English council of foreign bondholders, and of his interview with President Lerdo. As the result of Mr. Geiger’s visit, the London council of foreign bondholders resolved that it would oppose furnishing any more money to Mexico for railroads or other public or national enterprises until the government made some adjustment of its indebtedness to the English bondholders. The Mexican railroad company allege that the agents sent by them to Europe encountered the persistent opposition of the council of foreign bondholders in London, Paris, Frankfort, and other cities, and to its influence is attributed the complete failure to effect any financial arrangement, and the consequent inability to comply with the terms of the concession. No action has been taken up to this date by either the executive or Congress looking to an adjustment of this debt, and it is understood that the Mexican government will await a proposition from the bondholders. Congress has completed the objects to which the present session is especially dedicated, discussion and action upon the financial estimates of the government for the coming year; and, in conformity with the constitutional limit, will adjourn on the 31st instant.
I am, &c.,