of finance availed himself of the gloomy prospects to extort from the bondholders a large abatement on the usuriously swollen capital, together with a reduction of the interest from five to three per cent, in consideration of a draft on the United States treasury for two and a half million pesos. The total of the regular foreign debt, contracted at London, was thereupon fixed at £10,241,650, with an assignment on the custom-houses for the payment of the interest.[1]
Encouraged by this successful transaction, Minister Payno proceeded with somewhat blind confidence to consolidate the interior debt into one fund, with uniform bonds, and an interest of three per cent. This was decreed by law of November 30, 1850, under which, in conjunction with an insufficient representation of creditors, a rather arbitrary discount was imposed upon the different classes of debt, the remainder being allowed an interest of three per cent from the fund assigned of twenty per cent on the custom-house revenue, with an annual redemption of $300,000.[2]
- ↑ Embracing 25 per cent of the import duties, 75 per cent of the export duties from Pacific ports, and 5 per cent of those from the gulf. For the first six years the surplus from the assignments was to be applied to a sinking fund, and subsequently $250,000 a year should be remitted to redeem the bonds. Méx., Piezas Justific. Deuda Est., passim; Mex., Debt Rept, id.; Prieto, Informe Deuda Estran., 1-15. The ministerial reports in Méx., Mem. Hac., 1850 and 1851, Payno, Méx., Espos. Hac., 1-128, Murphy, Deuda Ester., contain full particulars of the transaction, which was effected on Oct. 14, 1850, and in the finance chapter of the next volume the history of the foreign debt will be reviewed. Manuel Payno deserves the credit which he claims for an arrangement which reduced this debt practically from 76 to 51 million pesos.
- ↑ Any surplus from the assignment was to be applied to increasing the interest at the half per cent every five years till it reached 5 per cent. All bonds must be exchanged for the new uniform issues, within six months for Mexico and twelve for foreign parts. Creditors who refused to accept this compromise would be disregarded for ten years, and so with non-classified credits. The discounts were applied as follows: Debts antedating the independence would lose 50 per cent of the capital and 80 of the interest; the twenty per cent bonds would lose the interest in arrear, and a million and a half of capital, receiving in compensation $500,000 from the U. S. indemnity of 1851 and 1852; the copper fund remained intact, and also the money loaned at not above legal interest, which was to be paid, half from the U. S. indemnity, half with bonds from the new fund; debts due to employés would be recognized for 80 per cent, if in the hands of the original claimant or his heirs, at 15 per cent if in the hands of speculators; debts due on administered property would receive 30 per cent from the indemnity and 70 in new bonds; the obligations of this class bearing interest were reduced to 6 per cent, of which only half would be paid with the new bonds; of the debt
