20 



The National Geographic Magazine 



of consumption entering the city, a sys- 

 tem still in force in many of the coun- 

 tries of Europe. 



The reduction made in the various 

 branches of taxation has large^ dimin- 

 ished the receipts of the national treas- 

 ury, having brought them down to 

 about $60,000,000 annually, but this 

 sum proves more than sufficient for all 

 the current needs of the public service, 

 as at the end of each fiscal year a con- 

 siderable balance remains subject to 

 appropriation for special purposes. 



This financial revival brought upon 

 the administrative departments multi- 

 plied work and new problems to solve, 

 and President Diaz sorely felt the need 

 of a man of business capacity, of thor- 

 ough uprightness of character and in- 

 dustry for the portfolio of Secretary of 

 Finance, and he was most fortunate in 

 his ultimate choice. Jose Yves Liman- 

 tonr is a gentleman of culture and in- 

 herited wealth, to which he has largely 

 added by his skillful business manage- 

 ment. He had no taste for political life, 

 and when the call came to him to accept 

 this post he was reluctant to do so, and 

 only yielded from a high sense of pa- 

 triotic dut}'. To him greatly is the 

 President indebted for the splendid suc- 

 cess which has attended the reorganiza- 

 tion of the taxation methods just men- 

 tioned, for the establishment of a well- 

 ordered banking system, and for the 

 rehabilitation of the foreign credit and 

 the public debt. 



THE PUBLIC DEBT 



This latter work has been most suc- 

 cessfully carried out. From the earliest 

 days of independence the public foreign 

 debt has been a fruitful source of em- 

 barrassment and shame for the Mexi- 

 cans. In 1825 loans were effected in 

 London for ^20,000,000, and only a 

 few years elapsed before the recurring 

 revolutions forced default in interest, 

 and for years this debt remained nom- 



inally of no value. In 1851 the cred- 

 itors had to accept a refunding, with 

 loss of accrued interest and reduction of 

 the rate, but this proved only a tem- 

 porary expedient. New foreign debts 

 to English, French, and Spanish cap- 

 italists were added, only to be soon 

 defaulted or repudiated. This latter 

 action brought on the tripartite inter- 

 vention of 1 861 which led to the Maxi- 

 milian Empire. The situation was 

 most deplorable when Diaz came into 

 power, but the financial improvement 

 which he inaugurated soon began to 

 create confidence among European cap- 

 italists, and the rapidly growing rev- 

 enues finally enabled the Secretary 

 of Finance to re-establish the govern- 

 ment credit abroad. By the year 1888 

 he had succeeded in consolidating all 

 the discredited foreign indebtedness of 

 every character whose legitimacy could 

 be established and issuing therefor new 

 gold bonds bearing 6 per cent interest, 

 and from that date the treasury has not 

 failed to pay the interest promptly. 

 This action, with the continued im- 

 provement of the finances, placed these 

 bonds at a premium of 102J4 in London, 

 and advances were made to the govern- 

 ment bv leading foreign bankers to con- 

 vert the foreign gold-bearing debt into 

 a new loan at 5 per cent interest, and 

 this transaction was consummated last 

 year, the bonds being taken by three 

 reputable banking houses of Berlin, 

 London, and New York. The entire 

 foreign indebtedness of Mexico is there- 

 fore now represented by a single 5 per 

 cent gold loan, with coupons pa\'able 

 in the three cities just named, amount- 

 ing to $1 15,178,000. 



This was accepted as a great triumph 

 for the government, and justty so when 

 we recall the depth of utter bankruptcy 

 from which the country has been re- 

 claimed. Its credit is now equal to that 

 of some of the first powers of Europe 

 and much above that of any other of 

 the Latin-American republics. If we 



