File No. 812.51/404
Mexican law of payments of December 24, 1917, forwarded to the Secretary of State by the Vice Consul at Mexico, D. F. (Zabriskie), January 14, 1918
Venustiano Carranza, Constitutional President of the United Mexican States, to his people. Know ye:
That in the exercise of the extraordinary powers invested in me by the Honorable Congress of the Union, I hereby decree the following:
Article 1. The considerations of the present law, which is directed exclusively towards the ends herein expressed, embrace the following:
I. Obligations effected previous to April 15, 1913, that is to say, during the period of metal currency.
II. Obligations effected during the period of the circulation of paper money, that is to say, from April 15, 1913, to November 30, 1916.
[Page 639]III. Obligations effected during the same period and which by virtue of an expressed agreement are considered as contracted in a definite kind of money.
IV. Obligations of any kind that were effected after November 30, 1916.
Art. 2. For the purposes of this law all obligations effected for the payment of revenues will be considered as having originated on the day when the interest became due.
Art. 3. For the purposes of this law the contracts that were renewed after April 15, 1913, will be considered as having been effected after that date; but in order that such a renewal may receive consideration it will be necessary to clearly prove that there was the intention to substitute the former contract for another of a different kind.
Art. 4. As to obligations effected during the régime of the circulation of paper money or those renewed during that period, the payment in metal money of assignments made out in the form of notes or ordinary printed documents will not be considered as having been expressly contracted when the debtor has received paper or bills, even though the document specifies that same shall be paid in metal.
Art. 5. As to obligations effected on accounts current, this law can only be applied when it refers to the unpaid portion of said accounts, inasmuch as the payments already made will be regarded as perfectly valid notwithstanding the kind of money in which same were made.
Art. 6. The holders of drafts that have not been duly cashed have no right to collect any amount of interest money from the drawee, although the depositor has the right to charge interest to the holder of his funds.
Art. 7. The present law does not apply to any obligations effected by insurance companies and those organizations that have been operating under the guarantee of the Federal Government, or as a simple derivative of same, which have assumed the part of creditors, debtors, or bondsmen. For these concerns special arrangements will be established.
Art. 8. Neither does the present law apply to obligations relating to rents, to which, the following rules will be applied:
I. To obligations made prior to December 14, 1916, the dispositions contained in Section I of Article 7, and those contained in Articles 8 and 9 of the decree of said date will be applied; and the rents referred to in Section II of the above-referred-to Article 7 will be paid entirely in metal; in consequence of which clauses a and b of said article are repealed. The proprietors shall not increase the rentals to an amount greater than what is specified in the respective contracts so long as the houses remain occupied.
II. To contracts celebrated after December 14, 1916, the rules of the respective civil codes will be applied.
Art. 9. Without prejudice to the manner and terms of payment of the principal part of the contracts referred to in Section I of Article 1 of this law, the moratorium in respect to same is raised according to the following rules:
[Page 640]I. The sum total of the interest moneys accruing from the month of August 1913 up to the 30th of November 1916, inclusive, which interest moneys will be considered as having been created in paper money, are payable on demand according to the dispositions of Article 2 of the present law and will be paid in current money of Mexican coinage after previous reduction has been made in accordance with the dispositions of Article 10 of this law.
II. Fifty per cent of the interest moneys accruing previous to the month of August 1913, and fifty per cent of those accruing after November 30, 1916, are payable on demand.
III. Fifty per cent of interest moneys accruing in future are payable on demand, excepting those relating to mortgage credits when it is proven that the property returns are sufficient to make the entire interest payment, in which case the total amount will be payable on demand.
Art. 10. Without prejudice to the manner and terms of payment of the principal part of the obligations referred to in Sections II and III of Article 1 of this law, the moratorium in respect to same is raised according to the following rules:
I. As to the obligations referred to in Section II of the above-referred-to Article 1, the total amount of the interest moneys accruing from the month of August 1913 up to November 30, 1916, inclusive, and those accruing in future, and 50 per cent of the interest moneys accruing during the months of April, May, June, and July, 1913, are payable on demand. Said interests will be determined according to the amount that represents the debt in national gold, after same has been reduced to metal currency, the equivalents of the paper peso in national gold being considered according to the following:
| 1913 | 1914 | 1915 | 1916 | |
| January | 74 cs. | 28 cs. | 9 cs. | |
| February | 69 “ | 26 “ | 8 “ | |
| March | 63 “ | 22 “ | 5 “ | |
| April | par | 58 “ | 18 “ | 7 “ |
| May | “ | 66 “ | 17 “ | 20 “ |
| June | “ | 65 “ | 17 “ | 12 “ |
| July | 90 cs. | 62 “ | 10 “ | 10 “ |
| August | 79 “ | 53 “ | 13 “ | 7 “ |
| September | 73 “ | 40 “ | 13 “ | 5 “ |
| October | 72 “ | 40 “ | 14 “ | 3 “ |
| November | 71 “ | 39 “ | 14 “ | 1½ “ |
| December | 71 “ | 37 “ | 12 “ |
II. The entire amount of the interest moneys that have already accrued and those that are still accruing as a result of the obligations wherein payment in foreign money is specified is payable on demand, said payment to be made in money of current Mexican coinage on the total value of the debt, after same has been reduced to metal, in conformity with the quotations made by the Department of the Treasury, according to the date on which the obligation becomes due.
[Page 641]III. The entire amount of the interest moneys that have already accrued and those that are still accruing as a result of the obligations wherein payment in notes of some particular bank is specified is payable on demand, said payment to be made in moneys of current Mexican coinage on the total value of the debt after same has been reduced to metal, in conformity with the table to be issued by the Department of the Treasury.
Art 11. In cases where there has been a division of rural properties on which mortgages have been settled, the interest moneys accruing on the part of the mortgage corresponding to each one of the divisions made in said property in accordance with the dispositions of Article 27 of the Political Constitution of the Republic will be payable on demand in conformity with the rules established by this law. Consequently, all mortgages on rural property are declared divisible, and each part of the divided mortgage shall bear a proportional relation to the whole mortgage as the values of the several land divisions bear towards the value of the whole. In these cases the authorities will exert the intervention that is incumbent upon them.
Art. 12. The payment of the interest moneys that have remained unpaid up to date and in respect to which the moratorium is raised shall be made by the debtors within a period of four months, same to be made every month in partial payments amounting to one-fourth of the total.
Art. 13. The capital and interests of the debts referred to in Section IV of Article 1 are payable on demand, and will be paid according to the stipulated terms in each case.
Art. 14. Obligations that are guaranteed by mortgages on both rural and urban properties that are located in any territory occupied by rebels of the Government will not be payable on demand, and this applies to capital and principal alike so long as such occupation lasts.
Art. 15. Loans made by beneficiary institutions having the character of Government pawnshops, whether they bear the form of pledge contracts or pawn tickets, shall be paid according to the following rules:
I.— Bases for Redemption
Articles pawned previous to December 30,
1915
_ _ _ _ _ _ _ _ _ _ _ at par
| From January 1, 1915, to May 31, 1916 | 20 | per cent | of | the | amount | pawned | ||
| During | June | 1916 | 18 | “ | “ | “ | “ | “ |
| “ | July | “ | 16 | “ | “ | “ | “ | “ |
| “ | August | “ | 14 | “ | “ | “ | “ | “ |
| “ | September | “ | 12 | “ | “ | “ | “ | “ |
| “ | October | “ | 10 | “ | “ | “ | “ | “ |
| “ | November | “ | 8 | “ | “ | “ | “ | “ |
II. Renewals will be subject to the same rule, the date of the transaction being taken as a base.
Art. 16. Private debts to the Federal Treasury, the Treasury of the Federal District, and those of the Territories, which do not proceed from contributions but which bear the character of purely civil obligations resulting from agreements or contracts entered into by the local or municipal or Federal Governments with private parties, will be subject to the general rules of this law and will be collected in the same manner as debts among private individuals.
[Page 642]Art. 17. The debtor will be obliged to pay only fifty per cent of the charges when court proceedings are adopted for the collection of interests in connection with which the moratorium has been raised or for the protection of debts maintained by the same moratorium. In the event of court proceedings because of the nonpayment of interests, there shall be no sale of the articles given in guarantee; but payment will be made out of the products of properties themselves, the embargo lasting not only for the time necessary for the payment of said interests but for all the time that the moratorium lasts and, in addition, for the time elapsing until the principal is collected. In cases concerning properties which because of their nature yield no returns, sales may be made for the payment of the amount owed as interest money payable on demand.
Art. 18. In every case where the application of this law does not appear sufficiently clear the proper authority shall issue, in duplicate, a statement containing all the attendant circumstances which he will submit, with his report, to the Department of the Treasury for its decision.
Art. 19. Any person interested in the application of this law may confer on the doubtful point respecting the disposition of same with the Department of the Treasury.
Art. 20. In conflicts between individuals respecting the application of this law recourse may be taken by the interested parties to the administrative branch of the Government through whose operation they will transmit a memorial to the Department of the Treasury in which will be set forth all the necessary data, and this Department will decide the controversy; but both of the interested parties must be willing to submit the case to said decision, and with the understanding that when the procedure through administrative channels has been chosen no recourse may be had to judicial procedures.
Art. 21. Charitable institutions and loan companies, as well as other recognized institutions of public utility, will in each case be enabled to make choice between the present law or the protection offered by the December 14, 1916, moratorium.
Transitory Articles
- I.
- Former laws and dispositions conflicting with the present law are hereby repealed.
- II.
- This law will go into effect on January 1, 1918.
Therefore, I hereby order that same be printed, published, circulated, and that due consideration shall be given to it.
Given in the Palace of the Executive Power of the Union, in Mexico, on the twenty-fourth day of December of the year one thousand nine hundred and seventeen.