Douglas daily dispatch., 1928-02-07
MEXICO SEEKS
TREATY CHANGE
TO MEET DEBTS

The problem of Mexlco's debt is
once more in the linlelight of public
discussion. AS was to be expected, the
Mexican government during 1923 takes
the position it will not be able to full
fill it's internal and external financial
obligations, obligations liked by the
Pani-Lamont treaty of 1925 which
agreement was already change from
the former Lamont-De La Huerta
treaty of 1922, not kept by the MeXi-
can government owing TO the revolu-
tion of 1923 and the resulting pre-
carious situation of Mexican finances.
That the Mexican government cam
not at present carry out its obliga-
tions is clearly shown in a recently
published statement of the Mexican
treasury which clearly points out the
practical impoSsibility for Mexico with
an income of about 280 million pesos
to pay III million pesos as debts with
out greatly endangering its social OBJ
legations, it's educational irrigation,
and road building programs. Already
the budgets of Mexican dependencies
are cut to the extreme and if the
Mexican government, in accordance
with it's plans, is going to be able
during the current year to spend some
20 million pesos for irrigation and
some ten and a half million pesos for
agricultural schools and roads, it can
be seen that such amounts constitute
the limit to which the administration
can go and still assure certain devel-
opment along these lines. Ninety-four
and one-half million pesos alone of
the above mentioned 1T million pesos
is due as obligations on the foreign
debt and it may safely be said that
not even this amount can be paid by
the Mexican government Up to date,
the federal budget allows only 33 mil
lions for debt payments aside from
taxes which may be raised from an
increased oil production and export,
the governments budget for 1923 be-
ing drawn UP without figuring on the
income TO be derived from the oil in
dustry, although it is practically a
foregone conclusion that even this
latter amount could not be expected
to yield the remainder of the debt
obligation.
Under such circumstances. the
easiest way to live up to previously
made promises would have been to
contract new loans with international
finance. This way, however, has been
declined by President Gales with the
result that the only remaining possi-
bility of finding way out of the pres
ent difficulties lies in a change of the
old debt treaties This is said to be
exactly what the Mexican government
wants. The Mexican government has
sent emissaries to New York with au-
-hority to place all necessary informa-
ton before the international bankers
committee as representative of foreign
creditors and negotiate. for certain
changes. To date, it appears that any
possible changes can be effected only
along the lines Of furth,A extension
for all outstanding obligations which
have been steadily accumulating dur
ing recent years and which according
to agreement must all be paid off in
1923. In this connection must also be
noted that debt payments during the
last half of 1927 were only possible
because of the two million dollar loan
advanced hv the international Bank
ers' committee for such purposes and
further that 1925 obligations amount
only to some one-third of those for
1929