Message of the President of the Union., June 1, 1866

Message of the President of the Union.

EXECUTIVE POWER OF THE UNION.

Citizen Senators and Representatives: I had the honor to give you a statement of the contract for a loan celebrated in England with Messrs. Robinson & Fleming, in accordance with the bases fixed by the law of May 28, 1864, and returned it to congress, as I had annexed for security one more hypothecation, that of the reserves of the Panama railroad.

The faith and responsibility of the government and of the nation being bound by reason of a legal mandate, it was not to be expected that this saving measure, the base of public happiness and foundation of a complex system of administration, should have the opposition that has been presented to combat my foreign proceedings, when competent judges in matters of finance have wondered that Colombia has been able to obtain this loan with better conditions than other nations, as Egypt, Turkey, Austria, and Brazil, and that the credit of Colombia has been sustained from my arrival in London, as may be seen from the quotations from the exchange of said city.

This mode of proceeding is incorrect. The republic receives actually and positively £1,185,000, or $5,925,000, which, at an interest of 7¼ per cent., produces $451,781 25, interest very common in Europe and an advantage not obtainable in Colombia. The republic by this contract pays six per cent. annual interest on $7,500,000, the sum of $450,000, or $1,781 25 less than 7 ⅝ per cent. of the money actually received in the loan.

The capital received commences to gain, according to the contract, an interest in the bank or banks in which it is deposited; and deducting from the $5,925,000 which they receive, $925,000, which is transferred at once to Colombia, leaves $5,000,000 gaining five per cent. or $250,000 annually. The republic, on the transfer of $925,000 for deposit in a bank and to form with it the support of internal improvements, will possess 4 per cent. premium, $37,000; that is to say, the republic will receive $962,000.

The payment of interests and the gradual liquidation of the first year is not a discount; it is an expenditure, as that of the $925,000 which is destined for internal improvements in the first year; and if this sum is reduced equally, the loan remains reduced to $4,170,875. And finally, when all is converted to internal improvements, “the republic has lost $7,500,000 and paid annually the enormous sum of $450,000 interest, and the gradual liquidation of five per cent.”

This mode of reasoning, citizen senators and representatives, is only proper to this opposition, passionate and systematic, which rises in the first days of my administration, when encharged with the government I find all the revenues pledged, claims drawn against the custom-houses exceeding $300,000, employés unpaid, the mortmain property in a dilapidated condition from bad sales, the income of the salt mines ruined, and a treasury debt of nearly two millions of dollars. In Europe I well knew this situation. However, I resolved to come and take charge of the government, because the nation called me to rescue it from the conflict in which it was met, since in my administration from 1845 to 1849 I inaugurated industrial improvements, as the president of congress indicated in his discourse of my inauguration.

Yes, gentlemen, I knew the situation of the country, but, feeling my powers, I believed that, relying as I ought to rely on a congress that represented at least the will of the States of Bolivar, Bojaca, Cauca, Cundinamarca, Magdalena, Santander and Tolima, I am sustained. As I was elected by a great majority after I had manifested how I understood the programme of the liberal party, which called me to power and filled the formulas of the democratic representative governments, the representatives of the people and the senators from the States have no other duty to express than the will of their constituents.

There are the United States and the Swiss Confederation among republican nations where the democratic representative system is known by practice. There alone, where the mandate abandons the programme presented, he is called to order and opposition is made.

That the deputation from Antioquia which represents the conservative party defends other opinions is not strange. That the deputation from the State of Panama which represents an opinion opposed to my election combats my ideas, does not surprise me. Although, by the message directed to me by the president of Antioquia, I have a right to believe that that people, filled with life and industry, are in accordance with my views of peace, union, and progress, and I am certain that the isthmus of Panama, country of my predilection, would have voted for me, if a revolution had not changed the vote of the people. The senators and representatives of this State know full well the deference that I must have for this country, worthy of better fortune, and which calls my attention under different points of view, economical and political.

Republican frankness is not consistent with the dissimulation of politicians who conceal their views, and I, as a republican, ought not to recur to that which is called machiavelism to govern, and I address myself to you with the loyalty of a tree man and friend of progress. Loans are ruinous where they are acquired for the ordinary expenses of the administration; but when they are converted to industrial pursuits which bring an augmentation of riches, and are a great benefit, then augmenting the production gives revenues to pay the interests of the money and as much per cent. for its liquidation. The United States, without the loans contracted in Europe, could not have attained the gigantic progress which has elevated this nation to a power of the first order. There is no occasion, gentlemen, to enter into a “polemica-economica,” because the axioms of the science of government teach that certain economical doctrines cannot be applied to the practice of public administration, in the same manner that national handicraft is unequal to industrial.

The loan obtained, congress has the facility to resolve the problem which I have given in another message, to wit: to meet the public expenses and evade national bankruptcy, or, better said, to remedy without imposing new contributions.

With the security of the loan, congress can ordain the issue of treasury notes as national money, with an obligation to receive for the payment of treasury dues and to meet public expenses, but leaving the commerce to fix the price of effects as also of gold and silver. These notes would be admissible in all the public offices for their nominal value, except in the custom-houses, whose dues would be paid in gold, to the end that commerce, by the necessity of acquiring it, would not depreciate the value of those documents.

To bring the first $925,000 for investment in internal improvements, one-half of the effective fund could be put in a bank of issue and discount and a European bank, whether the Bank of South America and Mexico or in another an equal sum, which I say to congress I have security to obtain. With this fund of $1,850,000 the government can ask the emission of another equal sum, hypothecating the revenues and changing the treasury for bank notes. In this manner the credit will rise, the country be saved from bankruptcy, peace be secured, and a new way opened for progress. With new and good roads production would be augmented, and in four years the $5,925,000 will give not only the 7⅝ per cent. it costs, but 12 per cent.

Moreover, with the creation of new industries by the facility of communication, the exportation from Colombia will not fall short of twenty millions in the next few years, and the importation will not be less than $25,000,000 with the credits; thus the 20 per cent. of the rights of the custom-houses will give $5,000,000 by importation, with which will be met the interest of the foreign and interior debt, and the expenses of the administration. Ten per cent. of the supposed right of consumption would give to the States $2,500,000 for their expenses, dividing among the base of the population calculated at 3,000,000, and would have a contribution by no means oppressive of $7,500,000, that is to say, $2 75 for each person, in the consumption of foreign merchandise annually.

If this project is adopted for the sale of the government interests in the railroad, means will be obtained to meet the hypothecations which they offer. A financial combination will give such credit that we will be able to undertake an enterprise of new regulations over our foreign debt, which will be reduced 33 per cent. at least.

The pressure of time and the necessity of addressing this message to-day does not permit me to extend it. Before the end of the session I will be able to give you a statement of the condition of the country, whatever may be required, and my ideas for its salvation.

I have confidence in Providence, that governs the world, in the good judgment of Colombians, and your patriotism, for assurances that if you give me the laws and authorities I have solicited, I will save the republic; for this I respond with my life and with my honor.