The sun., 1899-07-08
TO CONVERT MEXICO'S DEBT
BIG USDERTdkING ~ H1NDS OFF
hMERICIN EJNANCIERS.

j. =. Morgan Co. mt the Head of the En-
terprise-Pnrt of the New Issue Of aII3,-
bOO.OO0 Likely to Be offered for sale In
This Country-Dctnils OF the Transaction.
THE Sun is indebted 10 the courtesy Of the
editor OF the Financial ChrOuirlc for pcrmis-
sion to print the following editorial article
which appears In the Financial Chronicle this
morning:
CONVERSION or MEXICAN DEBT.
The announcement was made this week
that n syndicate OF bankers. comprising j. =.
Morgan & Go. Of this city. j. $. Morgan 4 Co.
OF London. the Deutschc Bank. the Dresdener
Bank. and y. Bloichrodcr Of Berlin. havo un-
dertaken the conversion OF the entire foreign
debt OF the republic OF Mexico This debt con-
sists OF E1O 100000 of tho loan Of 1859. $1,000
600 OF the loan Of 1890. aud E3.OOOOOO Of tho
loan Of 1894. all bearing u per cent. interest. and
f2.70O.OOO OF the Tehuantcpcc Hallway , per
cent. loan Of 1SSS' and subsequently. making
atotal OF 22.2OO.OOO. or about Sill .OOO. 900.
The new issue OF bonds. as Officially reported
from Mexico. is to be G22. 100000. about $ll3.-
bOO.OOO. payable in gold, bearing interest at
the rate of pcr cent per annum. redccmable
In forty-fvo years and ucoHv"rtiblc for ten
years. or the amount stated. El3 900. 900 will.
II is reported. DO taken at 9j less l per cent.
commission. and the remainder as an option
at O7 less per cent omnission. the OPTION to
hold until March. 1900.
Tho Ohcidl Gazptte OF tho Mexican Govern
mcnt reports TINT the new bonds will be de-
voted exclusively to tho conversion of the y
per cent. and 5 per cent. loans above men
toned. and TO expenses neccsstatod by such
conversion. The only guarantee made by the
Government. tho Otfcidl Gukeite says. is that Of
G2 per cent. OF import and export duties and 10
per cent. agreed upon in previous contracts. in
case the former assignment should not he sui-
fcient to meet the debt service. Tho 10 per
cent. agreed upon as above is on the lSSS loan.
which has an additional lien on the direct
taxes collected ,in'thc city Of Mexico and its
" il is estimated that the import and export
6s1ss SsnHc HnTy% th osr ment2nHm WI nr1a%G at 2%
as much as is required for the interest on the
now . per cent loan. There is thus. it is
claimed. abundant margin for, expenses and
sterling ate value Of the dollar .PIelow % pence,
Mexsan bnqsot .T% next ' ysnr, + at '2 4&so53S &
lar. including the first nstamcnt Of the III" sink INK
ing fund on the Te ehunntcp"e. bonds and al! OK
s fe%s per % 6r ama he @%SS s"%S
pn GT %o%m Ra &c q
53O. cost Of the present foreign debt service. ns
above. Their" would. howeyer, be q distinct
gate nominal sum of the foreign debt of the re-
public is slightly increased.
Though the new bonds are ms above stated,
to he devoted exclusively to tho conversion Of
the old loan. IL is expected that some portion
OF the new bonds will he offered for sale in this
country. What amount will be so offered how
ever. II Is impossible to sthtc this week Tho
striking feature OF this conversion negotiation
Is that II has been undertaken by an American
banking firm, j. +. Morgan Co, md that
these bankers have cooperating with them the
most substantial American and European
financial interests. As Sehor Iimantour. tho
Mexican Finnnce Minister in announcing the
in 10 .Nnh1 In tl,a.I I.Itat
ment: 1t raises Mexican funds to the Govern
ment rank q International securities OF the