No. 477.
Mr. Morgan
to Mr. Blaine.
Mexico, September 22, 1881. (Received October 7.)
Sir: On yesterday I sent you a telegram as follows:
The President’s annual message is considered threatening toward Guatemala. It announces that Mexican troops have arrived at the frontier State and that others will soon join them.
Confirmatory of the threatening character of the message, I inclose an editorial taken from the Monitor Republicano of the 20th instant, and a translation of that portion thereof which relates to the subject before us, from which you will observe that the editor is of the opinion that the President’s words give reason to believe that a declaration of war is imminent.
Referring, now, to your dispatch No. 164 (August 24, 1881), in which I am instructed to continue to transmit promptly, as events progress, all information on the pending difficulties between those two countries, I have to report that from the date of my dispatch No. 259 (August 25, 1881) up to last evening I have not had any conversation whatever with Señor Herrera, the Guatemalan minister; indeed, in that interval I had seen him but once, and that was at a ball which he gave on the 15th instant in commemoration of the anniversary of his country’s independence. I had declined his invitation on account of the President’s illness. At his earnest instance, however, and as the news had reached here that the President had been sitting up and had gone to Long Branch, I went to the ball for a few moments. It is well, perhaps, that I did so, as my absence might have been misinterpreted.
Neither had I had any conversation with Señor Mariscal upon the subject until yesterday. Although I had seen him several times in the meanwhile he carefully abstained from alluding to it.
Yesterday evening (21st), however, Mr. Herrera called on me. He directed my attention to the President’s message, and particularly to that portion of it which refers to Guatemala, and which was the subject of my telegram. He appeared to be quite concerned about it. He informed me that Señor Mariscal had at his (Mr. Herrera’s) house on the night of the 15th spoken with several persons upon the difficulties which were pending between Mexico and Guatemala; that the President of the United States had proffered his services as mediator between them; that the proffer had been declined. (One of the guests of Mr. Herrera had told me the same thing only a short while before.) I was careful not to say anything beyond assuring Mr. Herrera that the United States would view with concernment any trouble between the two countries, and that they would use every amicable means to prevent it. I did not, however, deem it imprudent to mention to him that I had informed you of the message by telegraph.
Later in the evening I received Señor Mariscal’s visit. He came in while the minister from Germany was with me. The German minister was speaking to me upon the subject of the pending difficulties between Mexico and Guatemala, and the proposed intervention of the United States, and had stated that Mexico was very angry thereat, when Señor Mariscal came in, to whom I told the subject of the pending conversation.
The German minister soon left, and after a few moments’ conversation upon other subjects, Señor Mariscal said: “And so you were [Page 807] speaking of the Guatemala question when I came in?” I said, “Yes.” He asked me whether I had seen the President’s message. I replied that I had read that “Napoleonic” document. He inquired of me why I characterized it thus. I replied because its warlike tone, as well as its manner, reminded me of the speeches which that Emperor was in the habit of delivering, or causing to be delivered, from the throne, when he considered himself, in some sort, the master of Europe. He asked me if I really thought it was so. I answered, “To such an extent that I had said to the minister from Guatemala, not long before he came in, who had spoken to me on the subject, that it would perhaps have been better if he had kept the money which his ball had cost to purchase powder with.” Señor Mariscal then repeated a great deal of what he had said to me in our former interviews concerning the grievances which Mexico had against Guatemala, adding that he proposed to send to congress, with his department report, a copy of your dispatch No. 138 (June 16, 1881), as well as his memorandum to me in reply thereto.
Alluding to your dispatch I said to him that when he came in I was explaining, in reply to a remark of the German minister, that it was understood that the President of the United States had offered his mediation, and that he had proposed to take up the question as to whether Soconusco and Chiapas belonged of right to Mexico, which had angered the Mexican Government and people; that the President of the United States had not, through me at least, made any such proposition. I then took occasion to call Señor Mariscal’s attention to the fact that there was not a press in Mexico (except the official journal) which did not contain almost every day something offensive to the people of the United States, a circumstance which I told him I regretted very much, as it had a tendency to engender a bad state of feeling on both sides of the line, and that it was, I thought, particularly to be regretted in view of the friendly and sympathetic tone of the assurances contained in those of your dispatches, which, under instructions, I had read to him. I cited to him particularly the Nacional, a paper which was owned and published, I had been informed, by a nephew of the minister of Hacienda (secretary of the treasury). Señor Mariscal was obliged to admit, with some reservation, the truth of my observations, and said, in regard to the Nacional, that he would take occasion to speak to the editor and caution him upon the subject.
I particularly directed his attention to the warnings which were daily uttered against the granting of concessions, &c., to Americans, and the baneful influences which, it was said, American enterprise would exercise upon Mexican interests, material and political, threatening as it did the national existence. In the same connection I mentioned as an instance of these warnings the articles which were constantly appearing in the daily papers upon the subject of the branch of the Franco-Egyptian bank here to the effect that the assent of Congress to the contract celebrated between the President and the directors thereof, should be given, upon the ground that it would do a great deal toward counterbalancing American commercial influence in the country, and I inquired of him how it was possible that the expenditure of, I might say, hundreds of millions of American money in Mexico, giving, as it did, employment to many thousands of its citizens, could be any detriment to the country. In respect of the Franco-Egyptian bank, I called his attention to the suggestion which I had made to him upon the subject, to the effect that I believed if the Government of Mexico desired to establish a bank here, one could be organized with American capital upon the basis of our own national banks; and I asked him which should be considered [Page 808] the safer institution, the one whose circulation was secured by United States bonds, or one whose circulation had, practically, no security; the one whose circulation did not exceed the amount of the security therefor, or the one whose circulation exceeded by three to one the amount of its nominal coin deposits; the one which would bring $20,000,000 of bonds of the United States—more than equivalent to that sum in gold—into the country, or the one which would be enabled to take at least $60,000,000 in coin out of it.
I pointed out to him what in my opinion were the inconveniences and losses which would result to the government in case the proposed bank was chartered. I called his attention to the fact that the capital of the bank was fixed (the limit) at $20,000,000; that it was authorized to issue thereon $60,000,000 in paper; that although it was proposed that no issue of paper should be permitted beyond three for one of coin in hand, we all knew how temporary such a security was, and how easily such a requirement of law could be avoided; that while the paper of the bank was not to be a legal tender from individual to individual, it was to be a legal tender as from individuals to the government; that consequently all debts due to the government might be paid in that currency, while the creditors of the government could exact payment in coin, which they would certainly do in case the notes of the bank were at a discount, as I did not doubt they would be in a very short time after they were issued.
As an example of the loss which would occur to the government in such a contingency, I cited the case of a Vera Cruz merchant who should receive a consignment of goods, the duties upon which would amount to $100,000. (It does not require much of a cargo to pay that amount of duties.) He may pay in notes of the bank. Should these notes be at a discount of 10 per cent, the merchant will only pay $90,000. The government owes him, later, a like sum. When it pays him he will exact coin. The loss on both sides to the government is apparent. The public officers, the army as well, I said to him, would be paid in currency. I asked did he think, if the currency should be at a discount, that payment therein would be received with thanks by the soldiers, particularly when they saw ordinary creditors of the government, including subventions amounting to some $4,000,000, annually paid in silver?
In respect of the advantage which it had been suggested would result from the credit which the government had of $4,000,000, I suggested that the money thus loaned would be in paper, and I asked what trouble it would give the bank to issue that amount of notes? And again I asked whether fostering such an institution would prove wise or a successful precaution against the encroachment of American commerce, or whether it did not occur to him, as it did to me, that it was likely to result in financial distress to the country, as well as give rise to political complications. I said it was difficult for me to understand what motive the press had in thus attempting to warp the judgment of the people, as well as the government, against us, in the face of past events, and notwithstanding the assurances which the Mexican Government had received of our friendship and sympathy.
I called his attention to the fact that the government appeared to share these ideas with the press, citing the fact, in evidence thereof, that it had recently gone to the expense of contracting for the emigration to Mexico of some one hundred Italian families, to whom a considerable tract of land had been given, calling his attention to the fact that Americans could come into the country as easily as Italians (or any [Page 809] other Europeans) could, and that when here they would be, probably, the equals of the others.
Going back to the Guatemala question, I stated that the President of the United States, when he consented to have it suggested to Mexico that he would act as arbitrator between the two countries, had been actuated by the purest feelings of friendship for both nations, and in the interest of a public peace, which, once disturbed, might result in consequences little dreamed of by either party. Laughingly, I said that if the Mexican appetite for conquest had been excited, it was probably fortunate for us that Guatemala and not Texas was the meat it craved.
This is the substance of what occurred, although I do not pretend that the points touched upon are given chronologically.
Señor Mariscal reiterated that if there should be a war with Gautemala it would be Gautemala’s fault. He admitted that the course pursued by the United States was friendly in its character, although he persisted in saying that the facts of the case had been misrepresented by Guatemala to you.
We parted on the best of terms, but he left me more than ever convinced that nothing would prevent a war between the two countries unless a positive position is taken by the United States, and I venture to suggest that unless the government is prepared to announce to the Mexican Government that it will actively, if necessary, preserve the peace, it would be the part of wisdom on our side to leave the matter where it is. Negotiations on the subject will not benefit Guatemala, and you may depend upon it that what we have already done in this direction has not tended to the increasing of the cordial relations which I know it is so much your desire to cultivate with this nation.
I am, sir, &c.,