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II. Debt
An arrangement was made on June 23, 1886, between the Mexican Government and the bondholders of different Mexican debts in London, the details of which will be be found in the "Statesman's Year-Book" for 1889, p. 642. The total amount of the English debt recognized by Mexico was £22,341,322, and that arrangement reduced it to £13,991,775; Mexico, therefore, being relieved by £8,349,597. On July 1, 1889, in accordance with this arrangement, 4114 per cent. of the whole outstanding debt was redeemed, viz.,
40 per cent. for the capital as per agreement of June, 1886, and 114 per cent. for the interest of the half-year.
On June 11, 1888, the conversion was primarily closed and another delay given, with the following results (January, 1890):-
Of the £10,241,640 of the 1851 bonds £10,194,000 were presented to the conversion, £47,650 thereby remaining as deferred. In exchange of the arrears of interest of the above bonds, new converted bonds of 1886 were given to the amount of £912,632 IS. 3d. Of the £4,864,000 of 1864 bonds £4,792,200 were presented to the conversion, and in exchange of them new converted bonds of the value of £2,395,971 155. were given; balance not presented is £63,400
With other classes of bonds the total of the new converted bonds issued in London by the Mexican Financial Agency was £4,585,000 which, added to the 1851 bonds-£10,142,400.-give a total of £14,727,400.
In March 1888 the Mexican Government contracted a loan in London and Berlin for £10,500,000 in six per cent. bonds. Of these £3,700,000 were issued at 78½, and the proceeds applied by the Mexican Government to the payment of the outstanding floating debt of the Republic since the year 1882. The remainder, £6,800,000, according to the contract for the loan, was taken at the option by the contractors before July 1, 1889, at 861½ per cent. The contractors gave in exchange one part in converted bonds, and the proceeds of the other part were applied to effect the redemption at 4114 per cent. of all the outstanding converted bonds in July 1889. The object (which has been realized) of this part of the loan was to redeem the 1851 debt and the converted bonds at the rate of
40 per cent., according to the agreement made between the Government and the bondholders, and referred to above, on June 23, 1886. The conversion of all the internal debts of the Republic, which is being carried into effect in Mexico, has reached $38,900,000, and very little more remains to be converted. The interest on the internal debt for claims not presented for conversion is from 1890, at three per cent. All coupons have been punctually paid since 1886. On May 27, 1890, the conversion of the old debts were closed. On September 12, 1890, a new six per cent. loan for £6,000,000 was issued at 93½ in London, Berlin, and Amsterdam, the proceeds to be applied to paying off arrears and balances of railway subventions amounting to $40,000,000, assigned in the form of percentages of customs revenue. Including this loan the total foreign debt amounts to £16,500,000. The total debt including internal debt and obligations of all kinds, amounts to £22,720,000. The Mexican Government proposes, by the sale of the national lands, to liquidate the whole or part of the debt, one-third of the price of land acquired by colonists or companies being payable in bonds of the public debt. DEFENCE.
The army consists (1891) of infantry, 17,307; engineers, 655; artillery, 1,604; cavalry, 5,484; rural guards or police, 1.950; gendarmerie, 244; total, 27,244. There are over 3,000 officers. The total fighting strength, including reserves, is stated to be 131,523 infantry, 25,790 dragoons, and 3,650 artillery. Every Mexican capable of carrying arms is liable for military service from his twentieth to his fiftieth year. There is a fleet of two despatch vessels and two unarmored gun-vessels, each of 450 tons and 600 horse-power, and armed with two 20-pounders; there is also a transport of 1,200 tons, a police steamer, and a 7-knot gunboat. A steam training-ship is under the direction of British naval officers.