Papers Relating to Foreign Affairs, Accompanying the Annual Message of the President to the Second Session of the Fortieth Congress
Mr. Plumb to Mr. Seward
Sir: During my stay here I have occupied some of my leisure in reading a work which has accidentally fallen into my hands, containing the official publication by the Mexican government of the correspondence connected with the rupture between France and Mexico that occurred in 1838–’39,and which was followed by the attack by the Prince de Joinville on Vera Cruz.
I find one of the prominent points of complaint then urged by France was that of “forced loans,” which formed the second principal point in the ultimatum then presented. In the recent demands of France and of the allied powers on Mexico, that point has not formed a subject of special correspondence or mention, nor do I know what has been the treatment of the subject by our own legations previous to 1861, but since that period all that has transpired relating to it is what I referred to in my official note to the department of the 8th instant. I have, therefore, thought that as the topic is one of some interest, and may have to form the subject of future and perhaps early correspondence, the views of the French government as presented at the period I have referred to, and the stand taken by the Mexican government at that time, might not be altogether without interest as a matter of reference.
I have consequently made a translation of such portions of the correspondence as most clearly show the character and interpretation given to what are termed “forced loans,” and the views of the respective governments upon the subject. The views then taken are equally pertinent to the discussion of the subject at the present time, and the concession of the whole question offered to be made by the Mexican government may be important.
To this latter point I would beg respectfully to call attention.
I am, sir, with the highest respect, your most obedient servant,
Hon. William H. Seward, Secretary of State; Washington, D. C.
Baron Deffandis to the Minister of Foreign Affairs.
The undersigned, minister plenipotentiary of France, has read in the public papers, first, a decree of the general congress of the 17th of this month, which authorizes the government to impose, for the purpose of covering the deficit existing in the public revenues, a forced loan of $2,000,000, which is to be apportioned upon all the extent of the republic, and in such a manner that the maximum of each contribution shall not exceed $1,000. Second, an order of the supreme government, by which the contributions which are to be exacted are divided into four classes, the first of $1,000, the second of $500, the third of $250, and the fourth of $100. Finally, a list addressed to the minister of treasury which contains the names of 200 firms or individuals established in Mexico, upon whom is imposed the maximum of $1,000.
The undersigned reserves to himself to present at a later moment to the Mexican government general observations against forced loans, which, among all means of procuring money, are the most contrary to the principles of political economy, as well as of equity, and which rather appear contributions imposed in time of war and with the idea of penalty, by a victorious army upon its enemies, than imposts exacted in time of peace and for the purpose of the public utility by a regular government from its citizens. But the undersigned believes it to be his duty to abstain at present from such discussions.
On the one hand he has been a witness for a short time past to the efforts which the administration has made with congress to obtain the establishment of a system of finance more in harmony with the present state of civilization and of science, as well as with certain recent portions of the legislation of Mexico, and he therefore hopes the system of forced loans approaches its termination. On the other hand he cannot deny that the present extraordinary [Page 379] circumstances in which the republic is placed demand prompt and extraordinary measures, and this last consideration is sufficient to lead him to maintain silence.
The sentiments of friendship which unite France and Mexico, also, do not permit the undersigned to discuss too readily with the supreme government the measures of public policy to which it may be obliged to resort. He will not, therefore, present any objection against the principle of the present forced loan; he only believes it his imperative duty to address to Señor Monosterio his representations with reference to the apportionment which has been made of the loan by the list addressed to the minister of the treasury.
The undersigned would have desired to await the subsequent lists, in order to judge and discuss with more precision the sum total and the general apportionment of the part that has to be collected in Mexico. But he finds himself obliged to hasten his reclamations by reason of the short term of eight days conceded for the payments; and being obliged to believe, at the same time, that the future lists will be conceived in the same spirit as the one already published, he will proceed to argue upon that natural hypothesis.
Of $200,000, the total of the sums the collection of which is ordered, by the ministerial list, in Mexico, more than 340,000 are to be paid by foreigners; that is to say, these are called upon to pay more than the fifth part of the impost. If, then, as is unquestionable, the apportionment of an impost, whatever it may be, cannot have more than two equitable bases, to wit, the number and the fortune of the contributors, it is easy to prove, by the most simple calculation, established upon these two bases, that the foreigners, and consequently the French, are enormously overcharged.
1. The undersigned will not pretend to make a comparison between the number of the foreign population and the total population of Mexico. This comparison would not be logical, because the greater part of the indigenous population are in a condition that renders it absolutely impossible that they should pay even the least part of the impost, and consequently they cannot enter into any calculation. But limiting himself, as is just, to establishing a comparison between the number of the foreign population and of all that portion of the national population that are in condition to bear their part of the taxes, it is evident that the foreign population, far from contributing toward the present forced loan in the proportion of one-fifth, should pay scarcely the twentieth.
2. If, further, the question is examined under the aspect of the comparative riches of the two classes of contributors, natives and foreigners, the conclusion deduced will be even more unfavorable to the ministerial apportionment. In fact, the religious corporations of the capital alone, who do not contribute more than the sum of $11,000, are immensely richer in capital and even in income than all the foreign population united, who are called upon to pay more than $40,000. It is sufficient, to ascertain this, to cast a glance over the statistics attached to the report presented to congress by the minister of ecclesiastical affairs in 1833.
Adding then to these riches of the religious corporations the very considerable and well-known wealth of the Mexican citizens who appear in the ministerial list, and adding further, as is necessary, the property of ail other persons who are in a condition to bear a part of the impost, it is impossible not to arrive at least at this conclusion, that the foreign population, in place of paying a fifth part of the loan, ought to pay scarcely a fiftieth part.
The projected apportionment of this loan is, therefore, in so far as relates to foreigners, and, consequently, in so far as relates to the French, beyond all the limits indicated by the two sole bases upon which an apportionment of this character can be equitably adjusted.
It also appears a consequence entirely contrary to justice to establish a maximum of $1,000, and still more a minimum of $100, which have been assigned, respectively, as the limits of the individual quotas.
In fact a maximum of $1,000 cannot be equitable, except in so far as it applies exclusively to persons for whom it is an insignificant charge, and perhaps only deprives them of a small part of their superfluous income. If, on the contrary, there is a necessity to apply it to persons for whom it is a very heavy burden, and whom it deprives not only of an essential part of their income, but sometimes of a portion more or less considerable of their capital, it is evident that this maximum has been fixed upon false calculations, and that, theoretically conceived in a spirit of moderation, it is practically supremely oppressive.
With reference to the minimum of $100, in no case can it appear equitable. If it should be applied to the generality of contributors, it would produce infinitely more than the loan decreed, and would be totally ruinous for a multitude of persons. If, on the contrary, as is probable, it is not applied except to a small number of individuals, it will result that the greater part of the population that are in a condition to pay some part of the impost will pay nothing. Why this unjust privilege? Such persons as cannot contribute with $100, might, perhaps, with $80, §60, §40, $20, $10, or $5.
These small quotas would be so much the more proper to re-establish justice in the apportionment of the impost by the diminution of the higher quotas, as it is always the small contributions that yield the greatest sums; as is proved by the history of finance in all countries.
Under grave circumstances, such as those in which the republic is now placed, an apportionment of imposts which should exact only from every person interested in the security and tranquillity of the country such sacrifices as are in proportion to the means of each, would be a measure so necessary and just that no one would have a right to complain. In this manner, in his own country, which has bad its periods of misfortune, the undersigned [Page 380] has seen all the inhabitants, who had the means to do it, hasten to the succor of the state; from the king who gave his millions to the laborer who gave five francs. But an apportionment of contributions which scarcely touches large fortunes, and does not reach in any manner the poorer, but which annihilates the middle class, or those whom it is pretended are such, cannot but give rise to unusual and well-founded reclamations. Thus, the undersigned has received the most earnest complaints from his compatriots with reference to the apportionment of the present forced loan, and he can do no less than to listen to these complaints and become their organ. Besides, with all confidence, the undersigned submits the preceding considerations to the intelligence of the supreme administration, and expects from its justice an apportionment contributions founded upon bases entirely different, at least so far as relates to the subjects of his majesty, and he especially solicits Señor Monasterio to co-operate with all his influence towards this just end.
The undersigned renews, &c.
Señor A. Monasterio, Charged with the Department of Foreign Relations.
[Untitled]
The last forced loan of two millions imposed in Mexico has called the most serious attention of the government of France to the general question with reference to this class of imposts.
Perhaps there is no country in the world where the government has not been obliged to resort, beside the ordinary and permanent contributions to those of an extraordinary and temporary character; and it is without doubt by reason of this example that the different administrations which have succeeded in Mexico since the independence, have come to establish, beside the fixed imposts, their forced loans. On the other hand, foreigners have submitted to these loans by virtue of the general principle according to which strangers established in whatever country should, outside of certain known exceptions, bear the same charges as the native citizens.
But such measures and such doctrines, which are perfectly just under certain circumstances, may be entirely inadmissible under different circumstances.
First. In all nations regularly administered, extraordinary and temporary contributions are never exacted except in special cases of extreme necessity, and excessively rare.
Thus it is that no contribution of this class has been collected in France since the year 1816—that is to say, for 21 years.
In Mexico, on the contrary, forced loans appear to be the favorite combination of the ministers of finance. In the month of December, 1835, (in order not to cite acts entirely recent,) the first forced loan was decreed; in the month of June, 1836, it was followe dby the second; and finally, in the month of December of the same year, 1836, a ministerial proposal (which fortunately did not receive the legislative sanction) sought to establish, in fact, the third loan, under the appearance of an augmentation of the quotas of the second.
In this manner, the extraordinary imposts, which in other nations only create a momentary embarrassment to the contributors, are here a constant and continuous source of ruin.
Extraordinary contributions, whether they rest upon all the territory and upon all the population capable of sustaining the charge, or whether it appears more just to exact them only in certain localities and from certain particular classes of society, are apportioned, in all countries, in so far as possible, according to the legal, proportionable, and consequently equable bases which are adopted for ordinary imposts.
This, for example, is what occurred in France with reference to the extraordinary contribution already mentioned, of 1816, placed upon the city of Paris.
In Mexico, on the contrary, the apportionment of the forced loans is made by estimates purely administrative, without fixed basis, and necessarily accompanied by a multitude of instances of injustice, and this injustice in apportionment is another source of ruin to the persons from whom they are exacted.
Third, and finally, foreigners, besides being subjected here in the exaction of forced loans to the general grave inconveniences just mentioned, have a special reason for complaint.
In place of paying in Mexico, as in other places, such part of the forced loans as is in proportion to their fortunes compared with those of the citizens of the country, they have constantly to support the heaviest part of these imposts. This result, so little in conformity with natural equity and the principles of public right from which it is derived, arises from the fact that on the one hand there are found only a small number of native citizens comprehended in the apportionment of the loans, while very few foreigners are omitted from it; and on the other hand, that the greater part of the native citizens comprehended in it are not made to pay, while all foreigners found in the same case are prosecuted with the greatest rigor.
These facts are of public notoriety. The proofs are within the knowledge of all, and one of the most notable instances has lately occurred in the failure to comply with the legal dis position [Page 381] which requires the publication of the lists of the persons who have paid their quotas in the forced loan of 2,000,000.
According to the special instructions which have been received by the legation of France the considerations which precede have appeared to the government of his Majesty more than sufficient to take the resolution of which the undersigned has been charged to inform the Mexican administration, which is, not to tolerate the application to French subjects of any forced loans, under whatever denomination that may be established.
But the government of the King has observed that it can, besides, found its determination in this sense upon article 9 of the declarations of 1827, and it has blamed the undersigned for not having appealed to this article when the loan of 2,000,000 was first levied.
With reference to this loan in particular, the government of his Majesty, from sentiments of loyalty which, perhaps, will be found worthy of note, has not withdrawn from the concessions of principle which its representative here, without instructions and even against those he had, has taken upon himself to make.
It would not, therefore, have asked that the French subjects should be indemnified for the quotas that they have paid under the loan of 2,000,000 if the loan had been established upon a common agreement, and according to the legal, proportional, and equitable apportionment proposed by the undersigned. But the legation of the King is ordered to demand, in the most positive manner, the restoration of the sums of which his subjects have been thus violently deprived.
The undersigned requests Señor Monosterio to have the goodness to communicate to him the definitive determinations of the supreme government upon the two questions, the one general, and the other special, treated of in this note, and has the honor to renew, &c., &c.
BARON DEFFANDIS.
Señor O. Monosterio, Charged with the Department of Foreign Relations.
Second point of the complaint of France in the final ultimatum presented by the French plenipotentiary from the anchorage at Sacrificios, March 21st, 1838.
“II. The collection, by means of violence, of forced loans, contrary in their nature as well to public law as to the existing treaties, and not less opposed to the principles of equity by reason of the unjust partiality of their apportionment.”
Demanded by France as a treaty stipulation, article 4, clause 2.
“Not to impose in any case in the future, upon the subjects of his Majesty, either contributions of war of any class, or imposts similar or analogous to those known under the denomination of ‘forced loans,’ whatever may be their purpose or object.”
Final project of a convention presented by the French plenipotentiary in the conferences at Jalapa, November 20th, 1838, just before the outbreak of hostilities.
Article 1. Until a treaty of amity, commerce, and navigation, based upon the common interests of the two countries, shall establish in a definite and invariable manner the relations between France and Mexico, these relations shall be provisionally governed by the act known by the name of the declarations of 1827, (although not yet ratified,) principally to what relates to articles 7, 9, and 11 of said declaration.
Article 9 of said declaration is as follows:
“In all that relates to the police of the ports, the loading and discharging of vessels, security of merchandise, property, and effects, the inhabitants of the two countries shall be respectively subject to the laws and statutes of the territory where they reside. They shall be equally exempt from all forced military service of sea and land, and there shall not be imposed especially upon them any forced loans. Their property, also, shall not be subject to other charges, requisitions, or imposts than those paid by native citizens.”
MEXICAN VIEW.
Exposition, published after the war had commenced, by the minister of foreign affairs, Don. Louis G. Cuevas, upon the differences with France, being a résumé of the course pursued in the negotiations, and the stand taken by the Mexican government. Mexico, January 10, 1839.
[Extract.]
With reference to forced loans, France should have proceeded with frankness and learned the real sentiments entertained by the government with reference to this species of taxation.
Forced loans, as all know, have been imposed in circumstances of difficulty and of extraordinary want of resources for the nation.
Whenever this measure has been taken, it has given rise to heated discussions and has been looked upon with repugnance by both foreigners and natives.
[Page 382]The government, notwithstanding, compelled by necessity, has not been able to do less than to adopt means as well known to be undesirable as regretted by all.
The existing treaties do not prohibit forced loans where they are general, and though the foreign text of some appears to prohibit them generally, the Spanish proves in the most irrefragible manner that the prohibition only extends to special forced loans, and not to those which comprehend all classes.
It cannot, be doubted, also, that the government should consult the Spanish text, nor should it be restrained in any manner by the stipulation relative to the declarations of 1827, for besides the fact that the Spanish of these has the same signification as that of the treaties, it is very obvious that, as the said declarations have not been ratified, they are of no force or value.
Notwithstanding this, the good intention of the government, its equity, and the desire with which it was animated to make known to that of France that in the adjustment of the existing differences it would never abandon the principles that it believed most in conformity with the universal practice of civilized countries, required that in this point it should manifest a disposition favorable to satisfy the demand relative to France.
Forced loans, in fact, indicate by their very name an arbitrary act and an attack upon property: the violence by which they may be exacted, and the difficulty of an equitable and proportionate application, have rendered inevitable measures as alarming as disagreeable for Mexicans and foreigners. They have been viewed, also, in a very unfavorable manner by other governments of friendly nations, and, indeed, have appeared little in conformity with the principles of order and civilization of all representative countries. In view, therefore, of these observations, as well founded as politic, this point ought to be ceded, but in such a manner as shall not be understood to be a special concession to the government of France, but taken as a general resolution not to impose forced loans in the future, the reclamation with respect to the French will at the same time be satisfied.
This declaration would not in any way impair the legality of these loans in the past, nor give rise to reclamations from other powers, because, although on the part of Mexico it should be agreed not to impose them in the future, no responsibility would be assumed for the past, with respect to which the reasons on which the declarations would be founded would be solely that of public convenience and policy, and not of rigorous right nor of strict justice. The present administration can proceed upon this point with all the more liberty from the explanations that have already been made in congress by the organ of the ministry regarding the inconveniences of forced loans, and the desirableness that they should not hereafter be decreed by the legislative body. Thus, notwithstanding the extraordinary scarcity in the treasury in consequence of the blockade of the ports of the republic, there has not been initiated during my administration any such measure, and there have been only proposed such as were in conformity with the indisputable right of the nation, to provide sufficiently for the public expenditures.
The article of the convention of Jalapa relative to this subject avoided all difficulties, was in conformity with all that could be desired in the adjustment by the governments of friendly nations and by the Mexicans themselves, and has manifested equally that on the part of Mexico all would be ceded that it was possible to yield, and the convenience of facilitating the desired adjustment was recognized.
Final proposition of convention submitted by the Mexican plenipotentiary at Jalapa, November 26, 1838.
Article 6. The Mexican government being agreed that forced loans shall not be imposed either upon natives or upon foreigners, the demand of the government of France in this point with respect to French citizens is, consequently, satisfied.
Spanish text.
Articulo 6. Estande conforme el gobierno Mexicano en que no se impongan préstamos forzosos ni á nacionales ni á estranjeros queda en concecuencia satisfecha, en este punto la demanda del gobierno de Francia respecto á los ciudadanos Francesas.