that in 1857 the sinking fund should be raised to 6 per cent. and the interest to 4 per cent.

Now it so happened, that two days after Mr. Doyle had signed his Convention, Señor Sayas, Spanish Minister in Mexico, also signed a Convention on behalf of some Philippine missionaries, which is generally known as the "Padre Moran" Convention, and which, singularly enough, was made upon exactly the same bases as our own. Its consolidated fund was 983,000 dollars, the sinking fund 5 per cent., and the interest 3 per cent.

This 5 per cent. and 3 per cent. were to be increased respectively to 6 per cent. and 4 per cent. at a stated period, and to be satisfied, as in our case, by yearly Custom-House assignments, whenever it could be found out what amount of assignments would be neces

sary.

Instead, however, of fixing this amount at the time of ratification, the Mexican Government only did so some two months afterwards by a Custom-House order setting apart 12 per cent. of import duties for paying the sinking fund and interest of both Conventions, but unfortunately without specifying in what proportion this 12 per cent. was to be made.

At first each Convention had its own agent in Mexico, but later on, Messrs. Martinez del Rio, naturalized British subjects, took charge of both, and from that time it would seem the Padre Moran Convention lost its nationality; for we, though until now unaware of the fact, have always collected its portion of Custom-House assignments, as will hereafter appear.

The original Custom-House assignment for both Conventions was 12 per cent. At the end of 1852 it had not been paid, and to meet the deficit the Mexican Government assigned an additional 3 per cent. until it should be made good; but this 3 per cent. had simply reference to the English part of the deficit, as appears from Mr. Doyle's Sub-Convention (forming Inclosure No. 3 in the despatch), for there is no evidence that any steps were taken in this direction by the Spanish Representative; yet as Messrs. Martinez del Rio had previously, on their own responsibility, apportioned to the Padre Moran Convention a sixth part of what the Custom-House did pay in 1852, so also they now made over a sixth part of the additional 3 per cent.

In 1852, therefore, the state of the Conventions was,

British Convention.-Sinking-fund 5 per cent., interest 3 per cent., Custom-House assignment 12 per cent. and 3 per cent. (for arrears).

Padre Moran Convention.-Sinking-fund 5 per cent., interest 3 per cent., Custom-House assignment 12 per cent., and 3 per cent. (for arrears).

In 1857, the interest and sinking-fund of both Conventions became, as originally stipulated therein-sinking-fund 6 per cent., interest 4 per cent.; the only difference in the Custom-House assignment being that the 3 per cent. originally intended to pay off a particular class of arrears, was now merged into the body of assignments, which therefore stood at 15 per cent.

In 1858 the Mexican Government, apparently of their own free will, increased this 15 per cent. to 16 per cent., and Mr. Otway, in the same year, had the interest of the British Convention raised to 6 per cent.

Thus at this period, the following was the progress made in both Conventions:

British Convention.-Sinking-fund 6 per cent., interest 6 per cent., Custom-House assignment, 16 per cent.

Padre Moran Convention.-Sinking-fund 6 per cent., interest 4 per cent., Custom-House assignment, 16 per cent.

In 1859 the arrears on the sinking-fund had accumulated to 1,800,000 dollars, and it was then that Captain Dunlop, senior naval officer in the Gulf of Mexico, obtained an additional 8 per cent. of import duties; and in 1860, when the Custom-Houses of Vera Cruz and Tampico had seized assignments to the amount of 350,000 dollars, Captain Aldham, who had succeeded Captain Dunlop, made a further Convention, by which 5 per cent. more of import duties was to be set aside, though only in the Custom-Houses of Vera Cruz and Tampico. Both the 8 per cent. of Captain Dunlop and the 5 per cent. of Captain Aldham were to cease as soon as they had respectively satisfied the 1,800,000 dollars arrears, and 350,000 dollars ("occupation") above referred to. It is certain. that Captain Aldham's 5 per cent. was upon all import duties from all vessels at the ports of Vera Cruz and Tampico. The 8 per cent., however, of Captain Dunlop would appear to refer to the CustomHouses generally, and to have been upon all import duties from all except French vessels.

Both the 8 per cent. and the 5 per cent. were solely for the specific object above referred to, and were to cease directly that object was attained, so that the regular Custom-House assignment upon all import duties from all vessels was, as has been stated, only 16 per cent.; and yet if the statement (see paper D) made by Messrs. Martinez del Rio be correct, even the original assignment of 12 per cent. has never been paid, much less that of 16 per cent.

Between 1852 and 1861 the proper amount of interest has been paid upon the Consolidated Fund of the British Convention, viz., 1,744,604 dollars 14 cents, and nearly the proper amount of interest upon the Consolidated Fund of the Padre Moran Convention, viz., 320,197 dollars 99 cents, instead of 344,961 dollars 59 cents (see

papers E and F), whereas the Sinking Fund of the two Conventions, which during the same period stand at 2,592,155 dollars British Convention, 511,160 dollars Padre Moran Convention, have only respectively been paid 810,634 dollars, and 157,280 dollars. Of course Convention stock has frequently changed hands in the moneymarket, and this will account for so many of the present holders of bonds being foreigners (see paper G).

Table showing the various changes which have taken place in the British and Padre Moran Conventions between 1851-1860.

(A.)-Pakenham Convention, Agent P de Ansoategui; concluded by Mr. Pakenham, on October 15, 1842, with the consent and approbation of both the British and Mexican Governments, as is proved by the despatches marked in the margin.

(B.) Diplomatic arrangement commenced on behalf of Messrs. Montgomery, Nicod and Co., by Mr. Pakenham, continued by Mr. Doyle in 1843-1844 and concluded by Mr. Bankhead in

(C.) Diplomatic arrangement concluded by Mr. Doyle with the Mexican Government in 1849, on behalf of Messrs. Martinez del Rio, Agents at that time for what was known as the "Tobacco Claims."

Liquidated up to December 3, 1851.

(D.)-Statement of the amount received from all the Custom-Houses on Account of the Convention Fund, from 1852 to 1859.

The annual estimated produce of the import duties is from 7,000,000 to 8,000,000 dollars; but even taking the very low figure of 5,000,000 dollars, it will be seen that in no one year has the original assignment of 12 per cent. been paid.

(E.)-BRITISH CONVENTION, Original Capital 4,984,914 dolls. 84 c.

Dollars c.

(F.)-PADRE MORAN'S CONVENTION, Original Capital, 983,000 dolls.

Dollars c.

1853 June 4

December 4

24,575 0

14,597 55