The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1856-08-31


independence of the Spanish States of South Ame-
RIGA by the English ministry in spite of the remon.
strances Of the King Of Spain, confidence In their
future stability, and the temptation Of new and
profitable markets for its industry, gave an i'm
mediate and powerful impulse to the spirit OF
speculation in England. The conduct Of the
government in appointing Charges to those
overture, and large investments in goods for
expectation, machinery for mining purposes, and
acquisitions Of lands for emigrants, were rapidly
made Capitalists rushed forward to take ad-
vantage of this fresh field Of enterprise, and en-
couraged applications for loans from the new
borrowers. Of the many negotiated for Euro
pean States between 1917 and 1923, none had
in 1921, while the fall Of interest at home had
been 20 great that new opportunities Of invest
ment were eagerly sought after, and they were
considered perfectly safe. In 1924 and 1925
about nine millions of pounds sterling were sub
scribed in loans to Brazil, Guatemala. Gaudela-
jara, Mexico and Peru; but in short time after
wards, such was the change in monetary affairs
almost an entire loss Of the sums paid in was
tanned by the holders Of scrip, and a general
panic endangered the existence Of even the Bank
of England, and the joint stock banks crumbled
all around.
In 1884, owing to the recurrence Of great com
mercial prosperity in England, South American
bonds again attracted the attention Of specula-
~, md tbarl
of similar character found their way into the
London market. Still, with very few exceptions,
they were unable to keep up to their first quota
tons; the borrowers were negectful Of their obli
cations, and they became source Of anxiety,
trouble and loss to those unlucky enough to hold
them at any price. The Mexican debt is one Of
this character After it was compromised and
re-adjusted by the decree Of the l4th of October,
1850, it became the right Of the bondhoiders to
appoint their own agents in Mexico, to receive
those portions of the revenue, " consigned spe-
cially" to their use directly from the officers of
customs at the different ports. Under this agree
ment five half yearly dividends were realized and
RENTED Six, however, down to- and including
the interest due July /, 1885, remain unpaid;
and in the meantime, the Mexican government
has suspended the functions Of these English col
lecting agents. collected the revenues through its
own officials, and has kept the bondholders out
Of their money. In the case of the Venezuela
loan, pretty nearly the same thing has happened,
and similar delinquency has occurred.
Under these circumstances it has become
question as to the proper remedy to be taken by
the British creditors to enforce the performance
of the contracts Of these defanlting govern
ments, and the subject is under grave discussion.
Dr. Phllimore, celebrated civil jurist, has given
an opinion, sustained by the expositions Of
vattel, that defaulting State may be compelled
TO fulfil its engagements to the subjects Of another
State; and Lord Palmerston, in his circular Of
ls4S to the British representatives in foreign
countries has expressed the opinion that such de-
linquencies should be laid before the home gov
eminent, and its intervention in behalf of the
bondholders should be requested.
We are not aware that any intervention has
taken place under any other form than that Of
diplomacy except in the instance of the late
difficulties between Spain and Mexico. One
would have supposed that Spain would have
been the last country in the world to resort to
such an expedient. For long years struggling
with financial embarrassments, paying up old
loans at a discount, with new loans yet unpaid,
she has discovered an audacity quite surprising
in turning round upon a second class debtor,
though at the same time setting precedent
which may not be lost upon her British credi-
tors.
The feet sent by her to Vera Cruz TO coerce
Mexico into settlement of her claims returned al
most as soon as il went, and 1t Is understood she
has waived the payment of two millions out Of the
five millions demanded, confessing by this act
that the transaction, as asserted by the Mexican
government, was 30 far a downright swindle
The financial operations Of Santa Anna being, to
this extent dIscredited, the real debt OF The
country to Spain is reassumed and provided for
And there is at hand simple and advan,a-
geous method for the payment Of this debt. The
sale of the enormous property Of the church--in
amount far beyond its wants, and forced by ecce-
siastical power and influence from suffering
population furnishes ready supply for the oc-
casion, and not only for this debt to Spain, but
for whatever else she may owe foreign creditors
General Comonfort unquestionably understands
the advantage Of bis present policy in this re-
speet, and we trust he will faithfully adhere to
It. II will be the resurrection Of the credit and
influence Of his unhappy country, and will place
its financial affairs in an enviable position.
With regard to the question raised by the vene-
zuelan bondholders, and decided by DR.. Phiil-
the ruling Of vattel and the ntimations Of
Lord Palmerston as We find them in the English
papers, we doubt very much their correctness, or
their sincerity. When individual capitalists
lend money TO foreign State, they receive back
its obligations in their individual capacity, and
their rights are only those Of individuals They
are bound TO look out for those whom they trust,
and to ascertain their responsibility as much in
such transactions as in any other. The profit il