Evening star., 1922-06-01
81 the AssocIa ted Press.

u
Mexico's financial problems. which has
been held in abeyance since 1914.
when that country ceased the pay
ment of interest on most Of Its inter-
nal and external loans, 10 expected to re-
suit from the conference to be held here
between Adolfo de la Huerta, Mexican
secretary Of the treasury, and dele
cation Of the information committee OF
bankers on Mexico. headed by Thomas
W., Lamont, who arrived from Europe
today.
Mexico's national debt IL approx
mately $7oo:oeo.o0o, not including
claims for property damages against
the government and depreciation Of
nationaiized railroad property. The
direct external debt. as complied by
the international committee, amounts
to $239, the direct Internal
debt to $9O,9S8,29S.13 the bonds guar
anteed by the Mexican government
exclusive Of railway guarantees) to
$43.009,5s1 ss. and the bonded inde5t.
edness of the national railways Of
| Mexico to $320.141,i7S.30, making a
! total of $693,2S6,8 6,826.41. These figures
include interest Appropriated to De-
cember 81, 1921.
i
ment securities have been very active
since the debt refunding negotiations
! were resumed In the first Ave months
of this year Mexican government
5s ranged from 81 to 7011 and the IS
from 39A to SO.
In the week ending April s, when
it was announced that Senior de Ia
| Huerta was coming to New York. tine
price OF the 5s jumped four points -
65. total transactions for that week
heipp 1884 nO0
In 1914, when interest payments
! were stopped. Mexican government
IS sold as(low as "a in April and as
high as IS in June. while the IS varied
| ing IS. In 1920 the 5s dropped to 29&
/! in March and rose to SO in November.
| total transactions for for the year
being $7,540,000.
| S14,o01,0 600 1921 Sales.
In 1921 the IS were quoted at 40 In
January and 59A in September. total
| sales being $14.O61 900.
| Local bankers estimate that we'll
over half of these Mexican govern
| ment bonds and notes are held in
| Europe, where most Of the public Of
ferings took place. The war made II
transactions in these securities. but
| a large percentage of them were held
| originally in Germany. 1t Is known,
however, that large blocks of these
l neIQ securities "cTO SOlu
the London. Paris and New York
markets in the few weeks preceding
the outbreak of the war
| 1t Is reported also that allied and
neutral investors obtained possession
Of others during the war. despite the
fact that trading with the enemy was
forbidden in ALL allied countries. Rep
| resentatives of German interests here
frankly stated that it was impossible
to estimate the present Mexican hold
lings of German investors.
Failure of the Mexican government
! to meet its obligations followed soon
| after the assassination OF President
francesca Madero in 1913. When Gen.
the United States did not recognize
his government. and no payments OF
! interest on outstanding obligations
were made outside of Mexico during
his regime. He was succeeded in the
presidency by Venustiano Carranza-
| During Carranza's administration
the international committee of bank
ers on Mexico was formed. 1t was
organized in New York February "a.
1919, and consisted Of ten American,
with J. P. Morgan as chairman and
Thomas W. Lamont of the Morgan
firm as his alternate. Since then one
American member. Edward F. Swim
and two others. James speyer and R.
G.. Hutchins. jr., were added, consoli-
dating the American interest in the
protection Of holders of Mexican Sc
!! curities.
| Names Added to Group.
Two names also were added to the
British tsn Hnsen that banke 9f
| which gives representation to the
group were added G. Pictet. Geneva
banker. and Auguste Dupont. Ant
civ trov ca q
to the swiss and Belgian interests, re-
| spectively.
Shortly after this international
committee was organized. President
minister of finance, to New York in
an effort to work out a plan OF set
tlement. Several general conversa-
tions were held on the subject. but
nothing came out of them. In the
fall of that year another unsuccess-
full attempt to come to an agreement
| was made when Gen. Salvador Alva-
RADIO came TO New York.
| Luis Cabrera, secretary of the
garded by International bankers as
antagc ~'stic to all their proposals
and he Vas generally blamed by them
| for the failure to come to terms. Last
fall Mr.. Lamont. as chairman Of the
the invitation of the Mexican gov
| ernment and spent two weeks con-
ferring with Mexican treasury Off
ctals. Mr.. Lamont stated upon his
departure that after long discussion
the Mexican government and the IN.
| ternational committee had failed to
| come to a substantial agreement,
| but Adolph de la Huerta. Mexican min
! lister Of finance. was more hopeful.
| While no official statements were
| given out as to the nature of the dis,
| cussions. 1t was reported from gen.
1 orally authentic sources, and never
| denied. that one of the features OF
{; cans was that American oil men
| should purchase these Mexican gov
! ernment securities in the open mar
ket and use them to pay their export
4 taxes TO the Mexican government, the
understanding being that the securi-
| ties would be accepted by the Mexi-
| can government at their par value.
| Viewed with Disfav0r.
! International bankers looked with
disfavor, upon this proposal. which
| they considered would have meant
| countenancing the Mexican govern
| ment in the disregard Of its pledge
! to devote the proceeds of its exports
and import taxes to % the payment p iea 90. OF
terior obligations. They also pointed
out that it would encourage the gov
| ernment, by Withholding current In
come, to depress the price of Its out
standing securities SO as to buy them
In at lower prices for itself, using
| fically. intended for the payment Of
interest on It's foreign bonds.
| Acceptance of the plan by the In
| ternatfonal bankers also would have
placed them in the position. they con-