MEXICAN FINANCES.
DISORDER OF MEXICAN FINANCES--ENORMOUS USURY.--CHARACTER OF
FINANCIAL OPERATIONS.--EXPENSES OF ADMINISTRATIONS.--ANALYSIS OF
MEXICAN DEBT--COMPARISON OF INCOME AND OUTLAY--DEFICIT.
The distracted political condition of Mexico since 1809, has contributed
largely to the proverbial impoverishment and financial discredit of a
country, which, nevertheless, has during the whole intervening period,
been engaged in furnishing an important share of the world's circulating
medium. The revolutionary and factious state of parties; the
unrestrained ambition of leaders; the violence with which they displaced
rivals; their short tenure of office when they attained power and the
consequent impossibility of maturing any permanent scheme of finance;
the ordinary reliance of statesmen upon a large army, and the immense
cost of its support; the continual and habitual recourse to loans at
ruinous rates of usury; the comparative ignorance of domestic resources
and their failure of development in consequence either of intestine
broils or the ignorance and slothfulness of the population, together
with the plunder of the treasury by unprincipled demagogues and despots,
may all be regarded as the basis of Mexican misrule and pecuniary
misfortune. For nearly forty years every minister of finance has been
taxed to discover means for daily support. Let us illustrate the system
commonly pursued.
On the 20th of September, fifteen days before the treaty of Estansuela,
the administration of president Bustamante offered the following terms
for a loan of $1,200,000. It proposed to receive the sum of $200,000 in
_cash_, and $1,000,000 represented in the _paper_ or _credits_ of the
government. These credits or paper were worth, in the market, nine per
cent. About one-half of the loan was taken, and the parties obtained
orders on the several maritime custom houses, receivable in payment of
duties.
The revenues of the custom house of Matamoros, had been always
appropriated to pay the army on the northern frontier of the republic,
but during the administration of General Bustamante, the commandant of
Matamoros issued bonds or drafts against that custom house for
$150,000, receivable for all kinds of duties as cash. He disposed of
these bonds to the merchants of that port for $100,000--and, in addition
to the _bonus_ of $50,000, allowed them interest on the $100,000, at the
rate of three per cent. per month, until they had duties to pay which
they could extinguish by the drafts.
Another transaction, of a singular nature, developes the character of
the government's negotiations, and can only be accounted for by the
receipt of some advantages which the act itself does not disclose to the
public.
The mint at Guanajuato, or the right to coin at that place, was
contracted for, in 1842, by a most respectable foreign house in Mexico,
for $71,000 _cash_, for the term of _fourteen years_, at the same time
that another offer was before the government, stipulating for the
payment of $400,000 for the same period, payable in annual instalments
of $25,000 each. The $71,000 in hand, were, however, deemed of more
value than the prospective four hundred thousand. This mint yielded a
net annual income of $60,000.
These are a few examples presented in illustration of the spendthrift
abandonment of the real resources of the country; and the character of
the transactions at once discloses the true origin and continuance of
national discredit. The demand of the hour was irresistible, and if the
minister or the president was unable to comply with it, his political
fate was sealed, perhaps forever. The _isolated_ good or evil measures
adopted by financiers, have only tended to augment the confusion. Each
government, of the thirty or more which have swayed Mexico since her
independence, has been forced to contend not only with its own errors
but with those of its predecessors; and hence the public has naturally
lost faith and hope in politicians as soon as they assumed the helm of
state. No matter what the personal character, or what the financial
talents of ministers might be, the people believed them to be
immediately compromised or paralized by circumstances and political
necessity.
We will present the reader a view of Mexican _national expenses_,
according to ministerial estimates during a series of years between the
establishment of the federal constitution in 1824 and the war with the
United States. This statement, in regard to a country which has been
stationary in population and industry, with an augmenting outlay of
money, is somewhat remarkable:
1825 the national expenses were $17,100,000
1826 " " " 16,666,463
1827 to 1828 " " " 13,363,098
1828 to 1829 the national expenses were 15,604,000
1830 to 1831 " " " 17,438,000
1832 to 1833 " " " 22,392,000
According to report of commissioners to
Chamber of Deputies in 1846, 21,254,134
Period of Santa Anna's administration, 25,222,304
These dates, it will be observed comprehend epochs in which the country
has been governed by the federal system as well as those in which
extraordinary powers were conferred on national magistrates. In the
preceding yearly amounts, it should be recollected, that a few of them
comprise occasional sums paid on account of the foreign and domestic
debt; but, on an average, thirteen millions of dollars may be considered
as the annual outlay.
In consequence of this costly government of so small a nation, a large
foreign and domestic debt has been created, in addition to the
liabilities of New Spain _prior_ to independence, which are calculated
at nearly forty-two millions.
In considering this interesting subject we have taken pains to obtain
the best authorities from Mexico, and, from the reports of the ministers
of finance, we reach the following results in regard to that republic's
financial condition in the year 1850. Her foreign debt amounts to
$58,889,487; her home-debt to $48,934,610; and her debt, prior to
independence, to $41,983,096, making a total of pecuniary liabilities,
with interest, to the 1st of July, 1849, of one hundred and forty-nine
millions, eight hundred and seven thousand, one hundred and ninety-three
dollars;--the annual interest on which, alone, amounts to nearly nine
millions of dollars.
Inasmuch as the clear _income_ of Mexico in 1849, was not calculated at
more than five millions five hundred and forty thousand one hundred and
twelve dollars, while the _expenses_ were rated at thirteen millions
seven hundred and sixty-five thousand four hundred and thirty-five
dollars, there would necessarily be an annual deficit, in the mere
_current_ finances, of eight millions two hundred and twenty-five
thousand three hundred and twenty-three dollars. This sum, added to the
actual _interest_ on the national debt, shows the total yearly _deficit_
in Mexico, of seventeen millions two hundred and thirteen thousand seven
hundred and fifty-four dollars;--a sum larger than the present yield of
all the mints in the republic.
This frightful picture of national finances is now absorbing the
attention of the Mexican people and congress; and it is to be hoped that
some wise plan may be devised to extricate the nation from ruin and
that the government may be sufficiently strong and enduring to carry it
into effect.
ANALYSIS OF NATIONAL DEBT AND RESOURCES, 1850.
1st. THE FOREIGN DEBT.
The foreign debt of Mexico, or the liability of the
national treasury to citizens or subjects of other
countries, according to the statement made and approved
by the meeting of _bondholders_ in London on
the 24th of June, 1846, was £10,241,650, or, in
Mexican currency, at $5 the £, to $51,208,250
This capital, according to agreement with the bondholders,
bears an annual interest of 5 per cent.
from the 1st of July, 1846, which amounts yearly
to $2,560,412, and, up to the 1st July, 1849,--to
the sum of 7,681,237
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Total foreign debt to 1st July, 1849, $58,889,487
2d. HOME DEBT.
The debt, the liquidation of which is founded upon an
assignment of 26 per cent. of the income from mercantile
duties, amounts to $15,030,466
Interest on this sum to 1st July, 1849, 2,745,947
Debt created for the redemption of the old copper currency
of Mexico, 2,083,205
Interest due to 1st July, 1849, 574,992
Due for indemnities, credits and contracts, 3,500,000
Due to civil and military _employées_ and pensioners, 25,000,000
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Total home debt, 1st July, 1849, $48,934,610
3d. DEBT BEFORE NATIONAL INDEPENDENCE.
National debt anterior to independence, interest to}
1st July, 1849, } $41,983,096
SUMMARY.
1. Foreign debt, $58,889,487
2. Home debt, 48,934,610
3. Debt prior to independence, 41,983,096
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Total debt of Mexico, $149,807,193
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The annual interest on which, at 6 per cent. is $8,988,431
_Estimate of the Income of Mexico from the 1st July, 1848, to 1st
July, 1849, according to the calculation of the Mexican minister of
Finance._
Income from MARITIME DUTIES, $4,488,000
" from INTERNAL DUTIES, TAXES, &c., &c., 2,224,000
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Total, $6,712,000
Deduct from this the cost of collecting this revenue} 1,171,888
and for various prior partial assignments of it, }
Total income for the year, $5,540,112
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EXPENSES OF THE GOVERNMENT FROM 1ST JULY, 1848 TO 1ST JULY, 1849.
Expenses of Legislative department, $720,300
" Department of Foreign and Domestic relations} 898,029
" Department of Justice, 135,550
" " of Finance, 5,411,984
" " of War, 7,769,342
" " Supreme Court of Justice, 330,230
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Total, $15,265,435
Deduct from this the sums that may be saved by
economical administration of the departments and
by the improved condition or reduction of the
army, say, 1,500,000
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Total expenses of government, $13,765,434
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SUMMARY.
Total of National Expenses, $13,765,435
" " Income, 5,540,112
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Deficit, $8,225,323
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Deficit on yearly expenses, $8,225,323
Interest on debt, 8,988,431
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Total yearly deficit, $17,213,754
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