José Maria Bassoco to The Chief Clerk of the Department of Treasury, January 2, 1868

No. 6.

In compliance with what we had the honor to state to the minister of the treasury in our memorial of the 24th of December last, and with what our regulations prescribe, we have called a general meeting of the creditors of the Spanish convention, in order to inform them of the resolution taken by the President, and they have unanimously agreed in authorizing us to employ all legal means for the purpose of demonstrating the justice that sustains us, at the same time with all respect to the supreme orders. As one of the means that is proper is that of representation, we may be permitted to set forth some reasons in defense of the interests committed to our charge.

His excellency the minister, in the supreme order of the 21st of December last, has been pleased to state that the President has well-founded motives for considering as insubsistent the treaties that unite Mexico with the powers who, after having recognized the government of the republic, recognized also the imperial government attempted to be established by the French intervention, it being those powers who broke the treaties, among which figures the Spanish convention.

It does not belong to us to discuss the conduct observed by our government in entering into relations with the imperial authorities, and much less to attempt to define the effects that this act may have produced, but we think we can assume that the Spanish convention of the 12th of November, 1853, ratified on the 30th of May, 1854, subsists and should be complied with.

It is well known that among the writers upon international law the question has been discussed whether the rule, that war puts an end to all treaties between the contracting powers, has not some exceptions, and the greater number agree that there are cases of exception, and even cite some examples.

We believe that there has not been war between Spain and Mexico, but only a suspension of relations, which we indulged the hope would be of short duration. But whether there may have been a state of war between the one nation and the other, or a suspension of relations that may be assumed to put an end to treaties, properly so-called as those of friendship, alliance, or commerce, which relate to general and permanent interests, the same cannot be the case with conventions like the Spanish, which only relate to the interests of private individuals, and which, if adjusted between the two governments of Spain and of Mexico, was only to assure more firmly what was stipulated with reference to such interests. The obligation contracted between the parties celebrating the convention did not remain dependent or subject to the political occurrences that might take place. The convention is nothing more than a contract between the government of the republic and that of her Catholic Majesty, by which the former performed an act of justice by assigning a part of the product of her maritime custom-houses during a term of years for the payment of the sums due to Spanish subjects, and the latter agreed that its subjects should accept the delay in payment in consideration of said assignment.

If the convention was at an end, the creditors would recover immediately the unquestionable right of asking the payment in full of their credits, as the arrangement would be at an end by which they agreed to wait and to accept annual payments. We make use of this circumstance to demonstrate the justice with which we claim that the convention is still in force, and that we do not in any manner admit that it has been terminated.

It must have been so understood by his excellency the minister, and for this reason, without doubt, in the said supreme order he was pleased to state that the republic recognizes the obligation of paying the sums due to the Spanish creditors, but that a sum would be assigned for the purchase of said credits at public auction. We believe, however, that the purchase of credits at public auction is legal only when it is so stipulated between creditor and debtor; but if the latter imposes the same by force he does not comply with his obligations, but pays less than what he owes, injures a right legitimately acquired, and attacks that of property in violation of the principles set forth in all of the constitutions which have ruled in this country from that of 1812 to that of 1857, and in all foreign legislation Which have laid down the principle of the inviolability of private property. No law authorizes the debtor to fix the mode of payment of his obligation after the same have once been admitted and recognized.

In the present case, although the supreme government merits all respect and due consideration, it has the character of a contracting party, as the state in the matter oi contracts individualizes itself and is subject to the civil law.

It is also equally certain that the public auction of credits can only take place when it is so agreed, and that in article 7 of the Spanish convention it is stipulated that of the eight per cent, assigned in article 3, there shall be paid first the three per cent. of interest accrued, and the remaining five per cent. shall be applied to the redemption of the capital, making this by public auction to the best bidder, and fixing as a minimum price the rate of one hundred dollars in coin for one hundred and thirty dollars in bonds.

In the present case, no auction for the redemption of capital could be proceeded with, because there remains unpaid the interest of more than seven years.

To the reasons already set forth we believe it convenient to add a fact, which should receive the respectable attention of the President and incline his just mind to direct the revocation of the said supreme order of the 21st of December, 1867.

By articles 3 and 4 of the convention of 1853, the Mexican government engaged to pay to the Spanish creditors three. per cent. annually of interest, and five per cent. of redemption of the consolidated capital, assigning, for the purpose of meeting this obligation, eight per cent. of the duties of importation collected in the ports of the republic, and authorizing the agent of the convention to receive directly from the customhouses the sum so assigned.

It was also stipulated that if the said eight per cent. should not be sufficient for the payment of the interest and redemption of principal, the general treasury, without the necessity of any further order, should annually cover the deficit with the first drafts received from the maritime custom-houses.

According to this stipulation there should to-day be covered all of the interest, and some of the principal redeemed. But neither has the interest been covered, nor has a single dollar of the capital been redeemed, nor has the general treasury covered any of the deficit.

Notwithstanding this, the creditors have not said a single word, nor have they addressed the slightest complaint to the government of the republic for the non-compliance with the stipulation of article 4, but they have taken into consideration the difficult circumstances in which the country has been placed, and have kept silent, to the prejudice of their interests.

The thirty thousand dollars and upwards that in coin and drafts exist in the agency, and that it has been ordered shall be returned, are applicable to the sixteenth coupon, which fell due in the month of February of 1860, and which debt is therefore of the epoch of the government of the republic.

The circumstance that our government held regulations with that of the empire should not operate to the prejudice of the creditors, who neither directly nor indirectly had any part in said relations, nor in the intervention. In receiving from the customhouses the eight per cent, which the government of the republic assigned them, they exercised only a legitimate right, disposing of money which belonged to them in full property. By such act they have not committed any fault whatever, nor can they merit the penalty of returning the $34,184 86 applicable to the payment of overdue interest.

For the reasons that have been expressed, we have again to solicit that you will be pleased to appeal to the President to accord that the said order of the 21st of December may be revoked.

If, as we trust may not be the case, its revocation be denied, the committee and the agent believe it to be their imperative duty to protest before the supreme government, with all due respect, that in making the delivery of the $34,184 86, which, in money some time collected, and in drafts awaiting payment, they hold, destined to the payment of coupons due more than seven years back, they make such delivery under compulsion and pressure of the supreme authority.