No. 347.
Mr. Foster to Mr. Evarts.

No. 922.]

Sir: I have heretofore reported the rejection by the English bondholders of the provisional agreement made by the resident agent of the latter with the Mexican Government, for the recognition and funding of the Mexican foreign debt, which was the subject of my dispatch No. 855, of December 16 last.

I now inclose the letter of the secretary of the council of foreign bondholders of London, addressed to the Mexican minister of finance, as published in the Diario Oficial of yesterday, in which he states that the holders of the bonds “lose no time in refusing in the most emphatic manner to confirm or recognize that instrument” (the agreement).

I am, &c.,

[Inclosure in No. 922.]

Mr. Holmes to Mr. Romero .

letter of secretary of bondholders.

Sir: I am instructed by the Mexican bondholders committee to inform you that, having been apprised of the terms of a contract which on the 6th December, 1878, Mr. E. J. Perry purported to enter into on behalf of the holders of the bonds of the Mexican debts of 1851 to 1864, they lose no time in refusing in the most emphatic manner to confirm or recognize that instrument. The terms on which it affects to settle the claims of the above-mentioned public creditors of Mexico are not only entirely different from those which this committee had expressed their willingness to recommend for adoption, but are also inadequate to meet the just requirements of such creditors, besides [Page 800] imposing fresh and onerous obligations on them as conditions precedent to the partial satisfaction of claims which ought to be met at once, and without such conditions, by the Mexican people. It is unnecessary to discuss the practicability of such a seheme or its details. The committee would only observe that it is idle to suppose that the capitalists of England or Europe would ever be willing to advance further funds for the public works of a state which does not unconditionally acknowledge its past obligations to its creditors, and make all the immediate provision of which its present resources will admit to fulfill them.

The committee further consider it pertinent to remark that in affecting to sign any contract of a definite character Mr. Perry exceeded his powers, which were simply to discuss, for submission to the bondholders, terms of settlement.

I have, &c.,