The sun. [volume] (New York [N.Y.]) 1833-1916, 1898-10-30

Z 1925 about S1OO,O0O.OOO had been PAID IN suD-
sidies. the payments taking the form some
tImes Of cash. sometimes Of bonds and some
times OF certlhcates. The policy OF President
Diaz has been 10 give a railway subsidy to
everybody asking for II, on the theory that, IL
the road should be built, the country would get
the benefit Of Il, while, II it should not be built
nothing would be lost. there being In all granite
q clause to the effect that, n no building should
DO done within a given timo. the grant should
be forfeited.
The fret telegraph line in Mexico was built
in 1852 by private company, assisted by
the Government. It extended from Vern Cruz
20 the Federal capital. In 1863 another line
was established to Leon. in the State Of Guana-
juato, and in 1886 q line was completed to San
Luis Potosl. In 1S80-60 q private corporation.
called the Jalisco Company. established the
line between the City OF Mexico and 0uadRlas
lara. which was soon after extended TO Man
zanillo and San Bias. After the restoration Of
the republic. in 1887. the Federal Government
began to construct lines between the principal
centres Of population. In 1890 It bought the
Jalisco line. and four years later the Vera
Cruz. Between 1869 and 1879 thu State Gov
ernments Of Mlchoacan. oGxaca and Zaeatecas
established several lines within their respec-
tive jurisdictions. In 1886 the Federal Govern
! ment transferred to the States Gratuitously all
the telegraph lines which wero considered OF
| only local interest. retaining such as might be
deemed trunk lines. On APRIL 1897, the total
length OF the Federal lines was upward Of $4,000
| miles, while that OF the State lines, private
company lines and railroad lines. was upward
OF 10000 miles. Up to 1880 there was no cable
communication between Mexico and foreign
countries. Since then. however. the Mexican
Gable Company has laid cables from Galveston
to Tampico. Vera Cruz and Coatzacoalcos on
the Gulf Of Mexico, and a teleRraphic line from
Coatzacoalcos to Salina Cruz on the Pacific,
which has been extended to Central and South
America. Cables have also been laid between
Jicalango and FL Carmen. and between the
rivers Grijalva and Coatzacoalcos. Through
these. Mexico is now In direct communication
withthe United States and Europe.
Up to q relatively recent date the rates OF
exchange between cities in Mexico were ex-
ceptionally high. sometimes reaching 10 per
cent. The rates have been reduced consider
| ably since the railroads we're built, but even
now It costs / per cent. to draw money from
the City OF Mexico to the city OF Oaxaca. Where
money has to be sent to smaller places the rate
Of exchange 10 much higher. Under the cir
cumstances we are not surprised to hear that
banking Is very profitable in the Mexican Con-
federation. The National Bank Of Mexico.
which was established in the City Of Mexico In
1882. and which has branches In the principal
| cities. possesses q monopoly for the issuance OF
notes In the capital. which Is only shared
by such banks as were In existence before the
date Of its charter. such establishments,
for instance, as the Bank Of London and
Mexico. or the Mortgage Bank. The capital of
the National Bank OF Mexico was originally
$3.000.000 It has been increased to $6.0OO.-
000. and there is a reserve fund of $5.5U0.000.
During the Ave years from 1891 to 1895. in
elusive. the annual dividend averaged % per
| oanf Thu nvaro1 annual dividend 0f tho Rank
OF London and Mexico during the same period
was 10 per cent. On June 3. 1895. q general
banking law was enacted by the Mexican Con-
Rress establishing the conditions under which
banking institutions may be organized This
law. OF course. does not affect the right OF the
National Bank and other banking establish
ments in the City Of Mexico which had been
chartered before the date Of the law.
The public debt for which the Mexican Fed
eral Government is responsible is represented
by bonds drawing different rates Of interest.
some payable In gold and others in silver.
In 1926. very soon after the attainment
of independence. the Mexicans contracted
two loans In London. most Of the pro-
ceeds Of which were used for buying war;
ships and war material. On account OF the
disturbed condition OF the country. the inter-
est on that debt could not be paid punctually,
and the bonds naturally fell to u nominal price.
In 1851. after the war with the United States.
the debt just mentioned was refunded in new
bonds, tho interest on which was reduced from
B to 3 per cont. Even now, punctual payments
proved impractlcable. Finally. in 1888. this debt
was readjusted. and gold bonds bearing 9 per
cent. interest were issued: as the interest
has been regularly paid. theee bonds have
reached par. We should next note that. from
1849 TO 1855. Mexico issued bonds to pay
claims Of EnRlIsh. French and spanish subjects,
under certain conventions signed with the
Governments concerned; such Uonds Eave
been exchanged at different rates Tor the g per
cent. gold bonds Of the foreign debE.' To builtl
the Tehuantepec RailwAythe Mexican Govern-
ment procured in London In 1888 another
gold loan for 3.000.0 900 sterling at 8 per cent.
interest. Originally the subsidies granted to
railway companies we're payable in silver.
but in 1890 the Mexican Government OBJ
tanned In London q gold loan at g per cent.
interest, with which 1t paid the subsi-
dies due up to that date to most of
the railway companies. In 1850 and at vari-
Gus subsequent dates. what were termed do
nestle or interior bonds were issued at 8 and
3 per cent. interest. payable in silver. All such
debts have been consolidated into new bonds
at the same rate Of interest. payable In the
same medium. We add that such railway sub
sides as were not paid out OF the proceeds Of
the loan OF 1890 have been since paid through
bonds drawing o per cent. interest. both capital
and interest being payable in silver. It is. OBJ
viously onerous for Mexico. which is on q silver
basis. to pay the interest Of It's foreign debt In
gold. which the Federal Government has to
buy at current prices. In 1895 the total
amount Of the Federal debt payable In gold
was STA. 1875. 600. while that Of the debt paya-
BILE in silver was SS0.b4e. 900.
1t is satisfactory to note the Improvement
which. since 1877. has taken place in the 1nan-
cial condition OF Mexico. The Federal revenue
has reached. finally. an amount amply sufficient
to defray all charges. At the close OF the fiscal
year which ended June 80. 1896. there was. for
the first time In the history Of Mexico since the
attainment Of its Independence. a surplus
amounting to $6.000.000. Advantage was
taken OF the surplus TO abolish the obnoxious
tax inherited from the Spaniards and known as
dlcabdEas: these interstate duties on domestic
and foreign had proved q great draw
back to internal trade. The Federal income Of