Don M. Romero to William H. Seward, & c ., & c ., & c, September 30, 1866

Señor Romero to Mr. Seward

Mr. Secretary: I have the honor to transmit to you the English translation of a decree published in the Moniteur Universel of Paris, on the 13th instant, containing a so-called convention concluded on the 30th of July last, between the Emperor of the French and his agent in Mexico, Don Fernando Maximiliano José de Hapsburg. The decree contains the following dispositions:

1. The French agent in Mexico agrees to grant to France fifty per cent of the returns of the gulf custom-houses of the Mexican republic, and twenty-five per cent. of those of the Pacific, that being the only disposable portion of the returns.

2. This appropriation is to pay the interest and to extinguish the loans contracted by Don Fernando de Hapsburg, and also to pay the three per cent. interest on the debt he supposes Mexico owes to France, which he estimates at two hundred and fifty millions of francs, more or less.

3. The duties now collected in the Mexican custom-houses shall not be changed so as to lessen the returns.

4. The duties shall be collected by French agents in Vera Cruz and Tampico, “and they shall be under the protection of the French flag.” In all the other ports the respective custom-house accounts shall be indorsed by the French agents.

5. The French Emperor shall fix the term of office of the agents in Vera Cruz and Tampico, and shall take the necessary measures for their protection.

6. This new arrangement takes the place of the so-called convention of Miramar, of the 10th of April, 1864, only in reference to financial concerns.

If this arrangement would go no further from the Emperor Napoleon and his agents in Mexico I would have nothing to say about it, as I hold he has a right to dictate as he pleases to his subordinates; but as certain obligations are pretended to be imposed on the Mexican nation by one who has no right to do it, I deem it my duty to make, respectfully, some remarks in relation to the arrangements, for the reconsideration of the government of the United States.

In the first place, I beg you to permit me to say, if any one really believes that Don Ferdinand Maximilian of Hapsburg is anything more than a French agent in Mexico, or that the success of French intervention will do anything more than make Mexico a dependency of France, he will be undeceived by reading the so-called convention; for by it some of the principal rights of Mexican sovereignty, as the power of changing the tariff of imports and exports, and the collecting of them by their own agents, are intrusted to France.

It is generally understood that the French government has for some time desired to make the United States believe that Mexican intervention was an error, of which it has repented, and which it means to correct as soon as possible, but in such way as to keep up appearances and save itself from the contempt of its own subjects and of the whole world. With this idea it was to be hoped that the measures adopted would really bring about the result desired, so that the French government would be free from the complications and difficulties caused in Mexico by itself. But, so far from this being the case, it seems the so-called convention only increases the impediments for leaving Mexico, and gives rise to new and immediate perplexities. If the French Emperor has the right to make what arrangements he pleases with his agents, he certainly cannot think they will be binding on the nation whose name he invokes. The conventions that the Emperor makes with his agent, Don Fernando Maximilian, cannot bind Mexico any more than the orders transmitted to General Bazaine by the French minister of war. It is now time for the Emperor Napoleon to confess frankly that he has been routed in his war with Mexico, and should accept the consequences of his defeat. Every effort to conceal this will only increase the embarrassment of his position, and make his situation more ridiculous.

I know very well the friends of the Emperor Napoleon explain this conduct by his desire to save appearances in pretending to protect French credit, but without the intention of enforcing the convention. In my opinion this explanation is very far from being satisfactory. If it is now tried to prove that all is well for the French government in Mexico, I do not think the way to do it is to make agreements that everybody knows beforehand cannot be complied with, and if they are not fulfilled, as they concern “special agents, to be protected by the French flag,” can only be another cause of discredit to the government of the Emperor Napoleon.

This explains why the convention is blamed by all those who wish to see France freed from the difficulties which its government has brought upon it in Mexico, as the accompanying extracts from various French papers will show.

In my opinion, the real object of the convention is to leave the seeds for other difficulties and complications, so as to have some excuse to remain in Mexico, in case the Emperor Napoleon sees fit to prolong his intervention and the occupation of the country beyond the time he promised the United States to withdraw from Mexico. As for the rest, if the convention has been made in good faith, what must we think of the sincerity of the Emperor of the French, when we see him deprive his agent of the only resources that enable him to live in the city of Mexico while the French army holds some portions of the Mexican republic?

As the convention mentions the loans negotiated by the French government for its agent, Don Fernando Maximilian, to oppress Mexico, I enclose some articles in regard to these loans, taken from English papers that cannot be considered friendly to the Mexican republic, nor even impartial, giving some idea of the fraud and deception with which they have been contracted, and of the distribution that has been made of them.

As to the two hundred and fifty millions of francs, the cost of the war that France is now making upon Mexico, as it is notoriously unjust, with no other aim than to conquer the country, it cannot be imagined how the Emperor Napoleon can expect that Mexico will pay it. If he had been successful in his expedition, he would have had a rich colony; but as he has failed, he ought in justice to indemnify Mexico for the injury he has done her, instead of asking compensation for the expenses of a cruel and unjust war.

I am pleased to have this occasion to renew to you, Mr. Secretary, the assurances of my most distinguished consideration.

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A well-informed journal, the Moniteur, publishes this morning the following note:

“By a decree of the 26th July, his majesty the emperor of Mexico has confided the portfolio of war to General Osmont, major general, chief of staff in the expeditionary corps, and the portfolio of finance to Mr. Friant, military intendant. The military duties of these two chiefs in service, attached to an army in the field, being incompatible with the responsibility of their new functions, they have not been authorized to accept them.”

It is scarcely necessary to say that we approve of this resolution of the French government in the most complete manner. What will the Patrie think of it, when it said yesterday, speaking of General Castelnau’s mission?

“We are certain General Castelnau’s mission to Mexico relates to a new plan for reorganization, containing many civil and military reforms, to be applied in December next. The appointment of General Osmont as minister of war, and Mr. Friant, military intendant, as minister of finance, is only the starting point for this entirely new situation.

“According to the basis adopted for the Mexican army, that army, commanded chiefly by French officers, would not only serve to keep order and quiet in the country, but would be employed in directing the different civil and financial services, the employés being taken from the army. This system, lasting two or three years, would be economical to the treasury, as the salaries would be paid from the army fund, and peace and economy are what the people now need, above all things.”

Our readers can judge from this what the informations and predictions of the Patrie are worth.

The convention with Mexico.

The convention with Mexico, published in the Moniteur of yesterday, although signed by M. De La Valette minister ad interim, has been in reality concluded by Mr. Drouyn de Lhuys, since on the 30th of July the latter had not yet resigned. This convention, we regret to say, seems to fall short of the object aimed at by the two governments, and contains elements of danger and complications to which we believe it to be our duty to call public attention.

The treaty concedes to France half the receipts of the custom-houses of the ports located on the gulf of Mexico, and a fourth in all the ports of the Pacific ocean. If the concession is but a fourth of the receipts in the harbors of the Pacific, it is because the other three-fourths are already mortgaged; so that the Mexican government will not get anything from these ports. It will not get much more in the gulf of Mexico, because if we are to receive fifty per cent., forty-nine per cent. being already conceded as a guarantee to the Spanish-English debt, there will remain one per cent., that is to say, the equivalent of nothing, to the Mexican government. Now the custom-houses having been the principal part of its revenue, the question occurs, what will the aforesaid government have to live upon hereafter? This, of course, is a question which we will not undertake to solve.

There is another circumstance worthy of notice. The convention allows us fifty per cent. of the produce of the custom-houses in the gulf of Mexico. Now, out of the three principal ports located on that gulf, Matamoras, Tampico, and Vera Cruz, two, Matamoras and Tampico, do not any longer belong to Maximilian. Tampico, especially, fell into the hands of the Juarists on the 1st of August, the day following the signature of the convention. Must we conquer it again?

If, as everything goes to show, Maximilian is compelled to abdicate, what will be the value of the present convention to the succeeding government?

But the point undoubtedly the most defective and dangerous of the treaty of the 30th of July is the disposition contained in article 5, stating that

“The collection of the duties mentioned in article 1 will be made at Vera Cruz and Tampico by special agents placed under the protection of the flag of France.”

This arrangement alone would be sufficient to make us condemn the treaty. With this article nothing is ended. Vainly shall we have re-embarked our troops and brought them back to Europe. Our flag remains; that is to say, France is still engaged. Abandoning the soil of Mexico, we leave upon it the germ of our complications and perhaps a new expedition.

If Mexican agents had been intrusted with the collection, we would have run but one risk, the certainty of not being paid. This would certainly have been a misfortune, which was, however, susceptible of being appreciated, estimated, and reckoned.

But the position which is made for us by this treaty is far more serious, because it conceals a certain peril, unknown in its form, unlimited in its bearing.

Can, in fact, the position of the custom-house officers we shall leave in Vera Cruz and Tampico after the withdrawal of our troops be easily imagined? Who will protect them? Is it Maximilian? But if he could not keep Tampico, how will he protect the agents we will leave in that city?

And if Maximilian abdicates, will the government which will take its place, and which will find the exchequer empty, leave quietly the French custom-house officers to pocket half the revenue of the custom-house in virtue of an agreement they will have not signed nor acknowledged?

On the other hand, shall we permit our agents, placed under the protection of the French flag, to be insulted? Shall we allow the funds which belong to us in virtue of the convention of the 30th of July to be seized in their hands? But if we have no more troops in Mexico, how shall we protect them? After having recalled our army, shall we be compelled to send another?

All this, it must be seen, is perfectly impracticable; it is the rock of Sisyphus; it is the Danuid’s hogshead; it is a vicious circle, in the midst of which we shall perpetually turn, imagining every day to put an end to an undertaking which we will be compelled to renew the next day.

We must have the courage to confront bad situations; the Mexican expedition is a bad business. The greatest want of France is not to economize upon the wrecks of the undertaking; it is to do away with it at once and forever, be the cost 500,000,000, 600,000,000, or 700,000,000; this is, in our eyes, a very small consideration when compared with the immense freedom of action which would follow a radical settlement. Our intervention in Mexico weighs heavily upon our European policy, and has raised clouds between the United States and us. Why? For what object? What do we hope to-day? Nothing, is it not? Well, let us end it once for all; and if we are withdrawing our soldiers, let us not leave in their stead our custom-house officers and, above all, our flag.”

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We have reason to believe that the mission of General Castelnau to Mexico is connected with the approaching realization of a thorough plan of reorganization. This plan embraces several administrative and military reforms, which are to be applied from the month of December. The nomination of General Osmont as minister of war, and that of the military intendant, M. Friant, as minister of finance, were only the point of departure of this new situation. According to the basis adopted for the Mexican army, this army, commanded in great part by French officers, will serve not only to maintain order and tranquillity in the country, but will be employed to direct the different administrative and financial services. The employés necessary to perform these services will be taken from it. This system, which will probably last two or three years, will have the advantage to produce notable economies to the treasury, since Mexico will have scarcely any expenses to bear excepting those of the support of its army, and it will respond to the most pressing needs of its population, who, before all, demand order and economy as the two benefits before which all other considerations ought to disappear. The organization of the new Mexican army, the base of the whole system, at the last date, was advancing rapidly. The number of voluntary enrolments was considerable, and had even permitted the dispension of the conscription. When the army-shall have been entirely formed it will take possession of the different services, and it is thought that this substitution can be made long before the departure of the last contingents of the French expeditionary corps. When General Castelnau will have regulated as French commissary the different questions in which our adhesion was considered necessary, he will return to Paris, where it is thought he will arrive in the early part of December. We are assured that Marshal Bazaine, who will no longer have a command in accordance with the high dignity with which he is clothed, will quit Mexico about the same time.

An alternative.

The Presse thus ends an article relative to the convention of the 26th of July:

“A contract has been made with the only regular authority that exists in Mexico. It is binding on the nation itself, irrevocable and finite. We need not doubt its execution, for, if the Mexicans are opposed to it, two French frigates will remind them of it.”

We do not know if our honorable colleague is aware of it, but what he says is an open condemnation of the French expedition to Mexico.

If two French war vessels could compel the Mexicans to fulfil their engagements, why did France make war on them to enforce claims? a war that is not over yet!

If two frigates could not collect a trifling debt, that the single custom-house of Vera Cruz could have paid in a few months, how can they protect French agents in all the ports of Mexico for an indefinite period?

If the two frigates were sufficient, then the expedition was unnecessary; they can do no more good now than they could before; so we must give up the contract, or continue the expedition.

The Mexican Loan–October coupons

On the 5th of August, 1866, the Moniteur published a Mexican correspondence, ending with these lines:

“The convoy of the specie train of six hundred thousand dollars, to pay the dividends of the foreign debt, left Mexico on the 22d of June, and will be sent to Europe on the English packet which is to start on the 1st of July from Vera Cruz for Southampton.”

The specie was then on the way, and the payment of the coupons was sure.

We find the following notice in the Moniteur of this morning:

“Mexican finance committee in Paris.

“The president of the Mexican finance committee in Paris informs the holders of Mexican bonds and obligations that as no funds for the arrears and coupons of the 1st October have been sent by the Mexican government, the payment is necessarily postponed. The president of the committee at the same time reminds the holders of Mexican obligations that a capital of thirty-four millions, according to contract, is deposited in the bank of deposits and consignments, at three per cent., to reimburse their expenditures.

“Paris, September 18, 1866.”

What does that mean? How is it that the Mexican committee does not mention the measures adopted by the government, as announced by the Patrie, for the consolation of its bondholders?

[Untitled]

Why is the cabinet of the Tuileries morally responsible to the holders of Mexican stock? We will say why: 1. The legislative body heard one of its members, M. Corta, who was charged with an official mission to Mexico, and who, at the sitting of the 10th of April, 1865, drew the most reassuring picture of the financial situation and the resources of the new empire. 2. M. Rouher, minister of state, while disclaiming in most explicit language—we readily admit it—any special guarantee on the part, of the government, declared at the same time that incontestable guarantees were attached to the loan then projected, and that France would not recall her troops from Mexico until she had accomplished her work and assured the complete pacification of the country. 3. Count de Germiny, senator, honorary governor of the Bank of France, was named president of the committee of Mexican finance, sitting at Paris. 4. When the loan was decided on, the minister of finance authorized the comptoir d’escompte to employ the agency of the receivers general for the distribution of the scrip in all the departments of France. Such are the facts, and we could mention others no less significant; for example, the sending to Mexico a counsellor of state, M. Langlais, charged to reorganize the finances of that country, Such, we repeat, are the facts which preceded, accompanied, and followed the issue of the Mexican loans. Those facts and those measures evidently influenced the public confidence and induced the subscribers to part with their money. Why should we not add that the French treasury has received the greatest portion of the funds arising from the loans, to cover itself for funds which Mexico owed to France on various accounts? Since, from motives which we have not now to analyze, the government has been induced to renounce a policy at first adopted by it, and which was the determinate cause of the success of the loans, the fact none the less remains that the declarations which it made, and the dispositions which it took, remain for the holders of Mexican stock. Those do not come and say to the French government at the moment when Mexico—from causes beyond her control, we are prepared to admit—fails in her engagements: “We are your creditors—we have your guarantee.” In effect it is not so. But it must be allowed that the holders of Mexican securities will hardly forget that if the French government is not bound to them by a material guarantee, it is so by its moral acts.

[Untitled]

The latest device invented by the advocates of the Mexican bondholders for redeeming the “moral guarantee “of the French government without charge to the French budget—a task about as practical as the search for the philosopher’s stone—is the following: A bill is to be presented to the Corps Legislatif authorizing the government to advance funds for payment of interest of the debt, (as was done in the case of Greece,) the produce of the Mexican customs, secured by the convention of July, being assigned as security; and the collection of these customs being admitted to be uncertain, the 34,000,000 impounded to accumulate at compound interest for the purpose of paying off the capital of the Mexican debt in fifty years would be “such an ample collateral guarantee as to cover the French treasury against all risk of not being repaid its advances.” It is obvious that the scheme is mere thimble-rigging. Whatever payments might be made to the bondholders under it would be taken out of their own money. No contract with the public was ever more positive than that these 34,000,000 should remain a sacred fund, untouched, to secure, in the very worst case, the repayment of the principal of the loan in fifty years. To touch that fund now for the purpose of preventing grumbling about the non-payment of dividends would be confiscation. Besides, the Moniteur insisted only two days ago, by way of consolation for the announced suspension of dividend, that this fund insured the safety of the capital. I cannot think any minister would have the face to present such a monstrous measure as the one suggested to the Corps Legislatif, after M. Rouher’s explicit declaration, made to stop the mouths of the opposition deputies who objected to the encouragement given by the executive to the Mexican loan, that France would never in any way be either directly or indirectly liable. Remembering this, it is impossible to agree with the Patrie when it says to-day that, though the bondholders have no legal claim on France, they have an “equity.” Not so; equity is all the other way, and should be steadily appealed to to protect the tax-payer. Nothing can be more “immoral” than the pretended “moral” guarantee.

An English official statement of Maximilian’s finances.

The sudden arrival of the empress of Mexico heightens the interest which so many Englishmen have reason to take in the affairs of that country. It is natural to suppose that the emperor Maximilian would not have permitted the partner of his throne to make a sudden voyage to Europe in the ordinary French mail steamer unless the business on which she came was extremely urgent. The empress Charlotte is no merely ornamental appendage of a court; she is a woman of courage and dignity, of capacious understanding and practical aptitude, formed in all respects to figure with distinction in the great world. She has had a full share of the responsibilities as well as the perils attending her husband’s remarkable adventure in the New World; and now that that enterprise has reached its crisis, the public will not be far wrong in supposing that the emperor Maximilian, tired of the periphrasis of diplomacy, has permitted his other self to visit the distant source and centre of his power to learn at first hand what further aid he was to expect from the creator of his throne and empire. There can be no doubt that this was the wisest step he could take; if the truth is to be got at, the empress will find it. The Emperor of the French, however, may justly complain, if he will, for it is rather sharp practice to introduce feminine naïveté and persistence into an affair so mysterious and sacred as diplomacy without a moment’s warning. The empress left Mexico before the great events which have recently taken place in Germany could be known there. Unless the emperor Maximilian had better information than was accessible to the European public two months ago, he must have been expecting when he parted with the empress to hear soon that Marshal Benedek had chastised Prussian insolence in the neighborhood of Berlin. The empress would probably receive intelligence of the battle of Sadowa, though scarcely of its vast political consequences, on her way to Europe. She finds the Emperor Napoleon preoccupied with affairs compared with which the Mexican enterprise was a holiday diversion. No one in France now thinks of the laurels which Marshals Forey and Bazaine have gathered in the New World, and it is to be feared that the empress will not be able to dazzle Napoleon with prospects that will withdraw him from the cares that now crowd upon him in Europe. The empress of Mexico is a sensible woman, and will take in the situation at a glance. She will be able to judge for herself what are the chances of her husband receiving succor from Europe. The French army and the French treasury have been the reserve on which the emperor of Mexico has freely drawn for these two years. The empress will perceive that this is a crisis in which the imperial banker at Paris must in justice to himself draw together all his resources, close outstanding transactions, taking from his debtors whatever they are able to pay, but on no account parting with more. If the Mexican empire can stand when the French troops have been recalled, and supplies of French money have ceased to flow, well; if not, the empress will hardly find it worth while to make another voyage across the Atlantic.

The political, military, and financial condition of Mexico has been sketched with a masterly hand by the present French minister of foreign affairs in more than one despatch since the beginning of the year, and the facts constitute a full justification of the resolution announced by the French government to withdraw from its intervention in Mexico. But there are certain results of that intervention which will remain after the final settlement of accounts between the two emperors, and which greatly concern the British creditor. At the beginning of the year Mr. Middleton, secretary of the British legation in Mexico, sent home an approximate estimate of the amount of the revenue and expenditure of the Mexican empire to be calculated on for the year 1866. We reprint it:

Mr. Middleton suggests that the customs revenue may produce a million dollars more than the amount stated above; but when he expressed that opinion he did not know that the French occupation, which had given such an impulse to consumption and importation, was about to cease. On the other hand, he points out that the cost of the French contingent is not included in the estimate. He observes, moreover, that “owing to the little progress being made in the pacification of the country,” the amount set down for military expenditure will not prove sufficient. The charges of the public debt remain to be added. They are as follows:

Here, then, we find the Mexican government, in the third year of the French expedition, with an annual deficit nearly equal in amount to the gross revenue. But this is not all. Since Mr. Middleton wrote, the French government has come to an agreement with that of the emperor Maximilian, under which the debt owing to France for the expenses incurred in setting up the emperor Maximilian’s throne is taken at ten millions sterling, upon which sum interest is to be paid at the rate of three per cent. So, then, it comes to this, that the French intervention, which was to have regenerated Mexico, but which, in fact, has merely intensified all the evils previously existing there, has saddled Mexico with an additional annual burden of two and a half millions sterling—a souvenir of the French occupation which the Mexicans will doubtless be careful to preserve.

[Correspondence of the London Times.]

The holders of Mexican debentures are beginning to make some stir; they consider that the French government, who set them the example of confidence, and thus encouraged them to lend their money, is morally bound to bear them unharmed. Of the encouragement given by the government there is no doubt; and the consciousness that they may have to make good the unavoidable shortcomings of Mexico may be one of the reasons why the Emperor Napoleon is unable to give further financial assistance to that country. The grounds on which the creditors found their claims are obvious.

In April, 1864, the Archduke Maximilian took possession of the throne; and his first, or one of his first acts of sovereignty was to authorize a loan purporting to yield a revenue of near ten per cent. It was issued in Paris and in London; and the French government, with a view to inspire confidence in the solidity of its own work, took the new stock to the amount of 54,000,000 francs on account of its own claims on Mexico. In spite of this high patronage the loan did not succeed. In his report of 1865 the director of the credit mobilier said: “We have shrunk from no sacrifice to better the condition of our clients, but we regret to say that our efforts have brought us nothing but serious loss.” Only a portion of the loan was realized, and the French treasury had, as security for its advances, stock completely unproductive.

Twelve months later the necessities of the Mexican government grew so pressing that indispensable military operations could not be continued vigorously. The emperor Maximilian was unable to raise money, and he naturally looked to France for help. The French government had only one of three things to do: to renounce the enterprise of founding a government in Mexico and recall its troops, to pledge the credit of France for the advantage of Mexico, or to give publicly such encouragement to a new loan as to insure its success. It chose the last as the least difficult and the least onerous. The illusions of the government were not dissipated, and whatever the majority of the legislative body may have thought individually, they seemed by their vote to partake them, and scouted the objections of the few who were well informed of the condition of Mexico as part of the systematic opposition. The condition of the loan, together with the lotteries, corresponded to an interest of 12 per cent. A week or ten days before the subscription opened a debate took place on Mexican affairs in the legislative body. A member of the house, M. Corta, who had been some time before sent to Mexico for the purpose of collecting exact information, completed his mission and returned. He was present in the house when the debate began, and he was requested to give his opinion. He did so. Nothing could be more reassuring than his account of the resources of the country, and of the future reserved for it under the new monarchical regime. The opposition, not convinced by this, flattering description, expressed their doubts of its accuracy, but the minister of state, M. Rouher, finished with a few vigorous touches the sketch which M. Corta had drawn. The minister’s speech was, like all his speeches, copious, earnest, and eloquent. He pictured the crowds of immigrants who were about to pour into Mexico, the numerous banks that were to be founded, the commercial and navigation companies that were only waiting to be formed, the great manufactories that were to be opened, the mines of gold and silver, of iron and of coal, that were to be worked; “and as for the finances of Mexico,” he said, “has not the information just given us by M. Corta satisfied the chamber beyond the possibility of a doubt as to the resources of the country? Have no fear, gentlemen; the able administration of the emperor Maximilian will restore and secure real prosperity to the finances of the empire, and give undoubted guarantees to those who lend him their money.” The majority of the chamber applauded. It is right to observe that the minister of state added: “There is here no question of the responsibility of the French government. France gives no guarantee, direct or indirect, in the matter of the Mexican loan.” The minister could not have said less. Had he uttered only one word implying a positive guarantee of the French treasury, the debentures would have risen at one bound from 340 to 1,000 francs. The government desired and expected the success of the loan without the direct intervention of the treasury. A member of the opposition, M. Picard, objected: “The subscribers have already lost 20 per cent. on the first loan, and you speak now of a second;” to which the minister replied:

“You are thinking of the loan about to be made, and certainly if the holders who will read your speech have confidence in your assertions, they will be slow to give their money. This mistrust, this distrust, the criticism expressed by an irresponsible person, which spread disquiet and alarm in the country, will be powerless and vain. Your words will not be listened to, and they who do not listen to them are perfectly right.”

These words were again applauded vociferously.

The second loan was issued by the comptoir d’escompte, and the comptoir d’escompte is debarred by its statutes from opening subscriptions of the kind without the special authorization of the minister of finance. The receivers general throughout France were authorized by the minister, whose immediate subordinates they are, to receive subscriptions. The Mexican finance commission, under the presidency of M. de Germiny, senator, formerly minister of finance, and formerly governor of the Bank of France, took charge, at the instance of the government, of the funds collected and of the payment of the interest. A member of the council of state, M. Langlais, was sent by the government to Mexico for the purpose of introducing order in the Mexican finances. During the time the subscriptions were coming in, the confidence of the public was constantly kept up by the favorable accounts the Moniteur published every fortnight of the state of affairs in Mexico; and these accounts were regularly reproduced in the French papers.

The French treasury held, on account of its own claims, 54,000,000 francs in paper of the first loan; and it became necessary, with a view to reduce the floating debt, to realize that sum. The operation was not easy. Mexican credit was so low that the stock of the first issue, yielding more than 12 per cent. at that period, was not salable. The conversion of that stock, or rentes, into debentures, or obligations, with premiums and lotteries, was effected, and the minister of finance transferred his unproductive rentes into obligations. In his report to the Emperor, on the 20th of December last, he stated that he had utilized, “not without loss, the stock of which he had been the holder.” The minister evidently thought that the new Mexican obligations which were thus thrown on the market were a safe investment.

From a statement published by M. Cochut it seems that the mode in which the funds raised for Mexico have been employed is as follows:

“The French government, in the first loan of 1864, received 6,600,000 francs of rente in payment of expenses incurred and to meet private claims.

“From the net amount several sums were retained for different objects—for the reconstitution of the capital at the end of fifty years, for interest reserves, premiums, and lotteries, dividend due to Europe—forming a total sum of 212,000,000 francs, so that Mexico received only 34,000,000 francs of her loan. There remains at present in the French treasury 114,000 francs Mexican bonds not realized, 47,000 francs held in reserve for indemnities to be paid to French subjects, and about 83,000 francs, representing the portion of the first loan unconverted, and which remain in the hands of the Mexican commission. The number of bonds held by the public is, therefore, about 756,000 francs, distributed over 300,000 families. Those people it is who have alone provided the necessities of the French army, and who even aided in reimbursing certain English creditors.”

The creditors, then, look to the French government, whom they consider to have morally guaranteed the Mexican loan by the quasi official character given to the subscription, for relief.

[Untitled]

The Paris papers that copy the above document from the Moniteur add the following interesting remarks:

The Liberté asks what are the resources of Mexico to carry on the government, and says:

“According to documents furnished by the Constitutionnel a few weeks ago, the budget of receipts was fixed as follows:

“Custom-houses of the Gulf, 38 millions; of the Pacific, 15 millions; other sources, 42 millions; making a total of 95 millions.

“Mexico had already appropriated 75 per cent. of the Pacific revenues, and now gives 25 percent.; therefore 15 millions must be deducted from the budget. In the second place, Mexico having given up 49 per cent. of the customs revenues to extinguish the English and Spanish debt, and now giving 50 per cent. of the same revenues, there remains but one per cent. on the Gulf custom-houses. The budget will then remain thus:

“Thus 42 millions is all the Mexican empire has to pay the internal debt with, to keep up the army, to endow public services and to pay the civil list.

“Where are these 42 millions except upon paper? We cannot tell; we think them problematical. Everybody will agree with us, then, in saying the Mexican empire cannot last, and that the convention of July is equivalent to abdication.

“On the other hand, what are the custom-house revenues now worth? As much as 38 millions in the Gulf? Perhaps so, if Tampico and Matamoras—two ports out of the three— were not in the hands of the rebels.

“And what will Maximilian’s assignment be good for after the fall of the empire and the evacuation of Mexico by our troops?”

The Avenir National is alarmed to see the French flag engaged for an indefinite time in Mexico. It says:

“Who does not see that if the French remain in Mexico to secure the payment of interest and the extinguishment of the Mexican debt, they cannot quit when they please? It is not possible to preserve freedom of action, and measure the exercise of rights by the exigencies of its policy, curbed by the convention of the 30th of July, which is nothing less than the continuation of that great error called the Mexican expedition. Now France would like to quit, for fear of danger in that direction; and we think she would prefer to have, instead of the convention of the 30th July, some arrangement to incur a present sacrifice, to save greater ones in future.”