New Britain herald., 1922-06-02

representatives. OF German interests
here frankly stated that 1t was i'm
possible to estimate the present MeH-
can holdings Of German investors.
When Failure Started.
Failure of the Mexican government
to meet its obligations followed soon
after the assassination of President
francesca Madero in 1918. When
General Victoriano Huerta became
president the United States did not
recognize his government and no pay
mentRsof interest on outstanding OBJ
legations were made outside of Mexi-
CO during his regime, He was sue
ceeded In the presidency by Venu-
tiano 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 cisisted OF ten American,
FIVE French and five British bankers,
with ]. P. Morgan as chairman and
Thomas w. Lamont OF the Morgan
firm as his alternate. Since then one
American member, Edward F. Swim
ney, Of Kansas City. Mo-. resigned
and two others, James speyer and r.
G. Hutchins, Jr., were added, consol-
idating the American interest in the
protection OF holders OF Mexican Sc
curities.
Two names also were added to the
British group, including that of C. E.
ter Meulen, Amsterdam banker, which
gives representation to the Dutch in
terests. To the French group were
added G: Pictet Geneva banker. and
Auguste Dupont, Antwerp banker.
Shortly after this international
committee was organized President
Carranza sent Rafael Nieto, acting
Minister Of Finance to New York in
an effort to work out a plan of set
Element Several general converse
tons were held on the subject, but
nothing came out Of them. In the
fall Of that year another unsuccessful
attempt to come to an agreement was
made when General Salvador Alvarado
came to New York.
Lamont Confers.
Luis Cabrera, secretary of the
treasury, under Carranza, was regard
ed by international bankers as artagz
onistic - all treir proposals and he
was generally blamed by them for
the failure to come to terms. Last
fall Mr.. Lamont, as chairman Of the
committee, went to Mexico City at the
invitation of the Mexican government
Mexicon treasury officials. Mr.. La
mont stated upon his departure that
after long discussion the Mexican
government and the international
committee had failed to come to a
substantial agreement but Adolfo de
la Huerta. Mexican Minister of
Finance, was more hopeful.
While no official statements were
given out as to the nature of the dis
cussions it was reported from ga
orally authentic sources and never
denied, that one of the features of
the agreement proposed by the Mex
leans was that American oil men
should purchase these Mexican gov
eminent securities in the open market |
and use them to pay their export taxes
to the Mexican government, the I'M
derstanding being that the securities
would be accepted by the Mexican |
government at their par value.
Dislike Plan.
International bankers looked with
disfavor upon this proposal, which
they considered would have meant
countenancing the Mexican govern
ment in the disregard of it's pledge to
devote the proceeds of its exports and
import taxes to the payment of sink
ing funds on certain of its exterior
obligations. They also pointed out
that it would encourage the govern
ment, by withholding current income,
to depress the price of it's outstand-
lower prices for itself using for this
purpose the revenues specifically in
tended for the payment of interest
on its foreign bonds.
Acceptance of the plan by the in
te~national bankers also would have
placed them in the position, they con-
,~ued of going to the persons to
whom they sold the bonds at or near
par and of inducing them to part
with their bonds at deprecated prices
While negotiations for settlement
were Temporarily halted by Mr.. La
mont's return. they were not aban-
doned. Informal communications
passed back and forth between Mr..
Lamont and Mexican officials. Early |
in April of this year it was an
nounced that Senior de la Huerta
would come to New York late in May
to discuss reimbursement of the Mex
lean debt with Mr.. Lamont and dele
cation of the International committee.
Soon afterward Mr.. Lamont sailed for
for preliminary discussions
with his British and French associates,
prior to the conference with Senior
de la Huerta in this city.