Office of the Historian

No. 410.
Mr. Morgan to Mr. Frelinghuysen.

Legation of the United States,
Mexico, June 19, 1883. (Received July 5.)
No. 647.]

Sir: I transmit herewith the law lately passed by the Mexican Congress authorizing a settlement of the national debt.

I am, &c.,

P.H.MORGAN.
[Inclosure in No. 647.—Translation.]

(Extract from Diario Oficial, June 18, 1883.)

Department of State for Hacienda and Public Credit, Mexico, Section 6.

The President of Mexico has sent me the following decree:

Manuel Gonzales, constitutional President of the United States of Mexico, to the inhabitants thereof:

Know ye that the Congress of the United States of Mexico has sent to me the following decree:

  • Article 1. The Executive is authorized to settle the national debt upon the following basis:
    I.
    Establish the form, conditions, and place for the examination, recognition, liquidation, and conversion of the debt.
    II.
    Consolidate the entire debt under new titles, which shall bear interest at the rate of 3 per cent, per annum.
    III.
    No matter what may have been the origin of the debt, or the nationality of the holders thereof, the whole debt shall preserve its Mexican character, to which no international character can be given, nor can the payment of the interest thereon be exacted out of any special fund.
    IV.
    Fix the term of the amortization, and make with the creditors the best terms which he can obtain from them in the interest of the Republic.
    V.
    We cannot recognize, and for this reason are not to enter into the conversion, the debts which emanated from the Government which pretended to exist in Mexico from the 17th of December, 1857, to the 24th of December, 1860, and from the 1st June, 1863, to the 21st of June, 1867; neither can the claims which have heretofore been rejected be recognized.
    VI.
    New bonds shall be issued by the general treasury of the nation for the consolidated debt, and shall exchange them for the old ones at their face value, and these last shall become null in virtue of the conversion.
    VII.
    Are to be rehabilitated and to enter into the conversion those debts which have been deferred and those which have been prejudiced, if their origin was legitimate and the authenticity of their omission is established. Those who are prejudiced for having adhered to the Empire shall be rehabilitated with a reduction of 4 percent, upon the value of their debt, equivalent to the reparation imposed upon them by the law of the 19th of November, 1867.
    VIII.
    All reclamations pending in the departments or before the courts, when they shall have been admitted (depurados) and acknowledged in conformity with the laws, shall enter in the conversion for the amounts recognized to be due to the claimants.
    IX.
    The balance of estimates due since the 30th of June, 1882, which are not comprehended in article 7 of the law of the 10th of October, 1870, will enter into the conversion after they shall have been liquidated in conformity with the laws, reserving to the Executive the right to establish an equitable basis upon which to terminate pending liquidations in cases which are not susceptible of a strictly legal determination in consequence of irregularity in the archives, the death of the parties responsible for the presentation of documents, the distribution of payments, and other circumstances of the same nature which prejudice, and without their fault, the rights of creditors.
    X.
    The conversion of the debt shall be voluntary; consequently those creditors who do not agree to the terms which the Executive shall fix for the registry, examination, or liquidation of their debts preserve their actual rights to the capital, but the debt which they represent shall be deferred, and shall not bear interest after the expiration of the term fixed for the registry thereof, after which, the conversion having been made, the mode of their payment shall be determined.
  • Art. 2. Besides the benefit to be derived from the proposed amortization of bonds of the consolidated debt, these (the bonds) and their interest coupons shall be received at the federal treasury in payment of the following:
    I.
    In payment of terrenos baldios belonging to the federation.
    II.
    In payment of debts or nationalized estates (church property), without prejudice to the rights of those who have denounced them in specie.
    III.
    Costs for patents of invention.
  • Art. 3. Such coupons of the consolidated debt as may remain unpaid at the end of any fiscal year shall be paid in the following year, and shall be received to the extent of 5 per cent, thereof in payment of the federal imposts therein levied.
  • Art. 4. This law does not apply to the debts in course of payment in virtue of the convention with the United States of the North on the 4th of July, 1868, nor to those due for subventions to railroads, which are to be paid in conformity with their respective contracts.
  • Art. 5. The Executive shall order, at the end of each fiscal year after the accounts of the general treasury have been adjusted, that certificates of indebtedness issue to creditors for salaries, pensions, or services, the term for whose payment has not been designated or fixed by law or by express contract.
  • Art. 6. In the annual estimates special consideration shall be given to the amortization of the certificates for balances due, and those which are not amortized within five years from the date of their emission shall from the sixth year bear interest at the rate of 3 per cent, per annum, and shall be upon the same footing with the consolidated bonds issued under the present law, for which they shall be exchanged.

  • J. M. VIGEL,
    President of the Chamber of Deputies.
  • P. LANDAGAN,
    President of the Senate.
  • EMETERIO de la GARZA,
    Secretary of the Chamber of Deputies.
  • D. BALANDRANO,
    Secretary of the Senate.

Wherefore I order it to be printed, published, circulated, and obeyed accordingly.

Thus done in the palace of the Executive power of the Union, in Mexico, the 14th June, 1883.
MANUEL GONZALEZ.

To the secretary of state for hacienda and public credit, Jesus Fuentes y Muñoz.

And I communicate it to you that it may have its effect.

  • JESUS FUENTES Y MUNOZ.
  • Al