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take place at Tacubaya in commemoration of the murders of prisoners and other persons committed there in the month of April, 1859, by order of Generals Miramon and Marquez, I deemed it a fitting moment to call the consideration of the Mexican Government to the claim of the widow and family of the unfortunate Dr. Duval

Señor Zarco, in a note of which I have the honour to inclose a translation, informed me that the President was willing to assign nationalized property of the value of 25,000 dollars for their benefit. Conscious of the all but impossibility under which the Government laboured of finding other means, I conceived it important to the interest of Dr. Duval's family to place the offer of Señor Zarco in the hands of a respectable person, Mr. Knight, as their representative to carry it into effect; but at the same time I deemed it right to guard myself in my reply, of which a copy is herewith transmitted, against the possible presumption of haying admitted the disclaimer contained in Señor Zarco's note of pecuniary responsibility on the part of the Government. I have, &c. Lord J. Russell.

GEORGE B. MATHEW.

(Inclosure 1.) -Señor Zarco to Mr. Mathew. (Translation.)

Mexico, April 12, 1861. The Undersigned, &c., in reply to Mr. Mathew's note respecting certain indemnity for the family of Dr. Duval, has the honour to inform him that, notwithstanding their desire to meet his wishes in the present instance, the Mexican Government neither are nor can be held responsible, whether they be judged by international law, the laws of Mexico itself, or by general principles of justice, for the crimes of certain people calling themselves a Government, and lately in possession of the capital, much less when such crimes come under the category of murders, as in the case of the unfortunate Dr. Duval. Consequently, the Undersigned cannot but feel that Mr. Mathew will perceive how impossible it would be for the present Government, with the principles they hold, to impose upon the country the pay- . ment of such indemnities as could not fail to give rise to a responsibility quite inadmissible.

Nevertheless, the Constitutional Gorernment, from feelings of humanity and justice, would not be indisposed to grant some kind of voluntary indemnity in such instances as the present one, and, as regards the family of Dr. Daval, would be willing to set aside house property to the amount of 25,000 dollars, the sum specified by Mr. Mathew, an arrangement that could be carried out either in actual houses or in convent property, the latter having been secularized.

The Undersigned, &c. G. B. Mathew, Esq.

FRANCISCO ZARCO. (Inclosure 2.)- Mr. Mathew to Señor Zarco.

Mexico, April 18, 1861. The Undersigned, &c. begs to acknowledge the notes addressed to him by his Excellency Señor Don Francisco Zarco, &c. under dates of the 12th, 13th, 15th, and 16th instant.

He feels most fully assured of the sentiments of reprobation with which the Government of whom his Excellency is a justly distinguished member must regard any acts of outrage and exaction from which Her Majesty's subjects in Mexico may have suffered, and for which they naturally look to that country for the compensation due to them; still less can he doubt the indignation with which they must view such atrocious and cowardly acts of assassination as that of which the unfortunate Dr. Duval was a victim-deeds, whose advisers and perpetrators will yet, he trusts, meet condign punishment.

The Undersigned has received with sincere gratification the notification that his Excellency the President has determined to assign immediately property of the value of 25,000 dollars for the benefit of Dr. Duval’s widow and family, and has requested Mr. Knight, as their agent and friend in this capital, to wait upon his Excellency Señor Zarco, and to concert with him all necessary steps for carrying his Excellency's benevolent commands into immediate effect.

The Undersigned, &c. Señor Zarco.

GEORGE B. MATHEW.

No. 6.- Lord J. Russell to Sir C. Wyke. SIR,

Foreign Office, May 30, 1861. Her Majesty's Government approve Mr. Mathew's proceedings, as reported in his despatch of the 19th ultimo, with reference to the proposed assignment of national property of the value of 25,000 dollars to the widow of the late Dr. Duval.

&c. Sir C. Wyke.

J. RUSSELL.

I am,

No. 7.--Mr. Mathew to Lord J. Russell.—(Received June 27.) (Extract.)

Mexico, May 12, 1861. THERE has been but little change in the affairs of Mexico for the last two months. Señor Prieto was succeeded in the Ministry of Finance by Señor Mata, whose previous nomination as Minister to England I had the honour of notifying to your Lordship, and who has only agreed to fill the office until the meeting of Congress. The death of Señor Lerdo de Tejada, the ablest, if not the only financier in the Republic, has been severely felt at the present crisis.

It seems doubtful whether Señor Mata will proceed to London ; the name of Señor Gomez Farias has been mentioned to me by Señor Zarco, in the event of a new appointment.

Señor Fuente, a lawyer of some note, left Mexico by the last packet on a mission to Paris, and probably to Spain; his departure having been long delayed by the difficulty of procuring even the small sum of money necessary for his journey and support.

To this complete deficiency of resources must be attributed the continued existence and increase, in various parts of the country, of guerilla bodies under the Spaniards Cobos and Vicario, and under the infamous Marquez, who pursues still his course of murder and rapine.

Two petty attempts to create disturbances in this capital were discovered and put down in time.

In other respects public tranquillity has not been disturbed, and however faulty and weak the present Government may be, they who witnessed the murders, the acts of atrocity and of plunder, almost of daily occurrence, under the Government of General Miramon and his counsellors, Señor Diaz and General Marquez, cannot but appreciate the existence of law and justice.

Foreigners, especially, who suffered so heavily under that arbitrary rule, and by the hatred and intolerance towards them which is a dogma of the Church party in Mexico, cannot but make a broad distinction between the past and the present.

President Juarez, though deficient in the energy necessary for the present crisis, is an upright and well-intentioned man, excellent in all the private relations of life; but the mere fact of his being an Indian exposes him to the hostility and sneers of the dregs of Spanish society, and of those of mixed blood, who ludicrously arrogate themselves the higher social position in Mexico.

I have already made known to your Lordship my opinion of the objectionable nature of the Federal Constitution now in force; and I have not concealed my fear for the future peace of Mexico, from the utter want of patriotism among the higher classes, and from the demoralisation and restlessness produced among all by the prolonged state of civil warfare. A desire for change is already stated to exist in certain quarters, and the idea of the selection of a Military Dictator has been put forward ; but it is scarcely needful to observe that such a step would be no palliation of the present wants, and no preventive of the future dangers of the country.

General St. Anna was the ablest man of that class Mexico has produced, and the temporary good effect of his energetic character is unquestionable ; but that due appreciation of equal justice, of social rights, and of peaceful prosperity, by which alone nationality can be maintained, cannot be created by the strong hand of arbitrary power.

The hope of Mexico rests upon the maintenance of peace. A wise basis of civil and of religious liberty has been laid down, and peace only is needed for the development of constitutional principles, and for the gradual enlightenment of the people.

But seeing, as I do, so many native and foreign elements at work to disturb the existing state of things, I cannot but entertain a conviction that unless the present Government or principles of government are in some way avowedly upheld by England or The United States—by a protecting alliance, or by the declaration that no revolutionary movements would be permitted in any of the seaports on either ocean-further deplorable convulsions will afflict this unfortunate country, to the heavy injury of British interests and commerce, and to the disgrace of humanity.

I do not believe it possible that the Church party, or that the former rule of intolerance and of gross superstition, can ever be restored to power : so far, at least, has been secured by the result of the last civil war-the first contest for principles, it may be remarked, in this Republic. But the result of the intrigues of various parties with different views and hopes, and the difficulties and embarrassments purposely brought to bear upon a weak and bankrupt Government, may cause an early dismemberment of the Republic, and its divison into many petty States.

The most imminent peril, however, to Mexico, and one which will equally press on any future as on the present Government, is the deplorable state of its finances. On the one hand, the Supreme Government have no power to raise taxes, save with the consent of the States and the country, though possessed of great internal wealth, is, for the present year or more, utterly ruined and exhausted by the late war); and on the other, the resources now receivable by the Government are avowedly unequal to more than half the amount of the expenditure actually requisite.

The chief revenues arise from the import duties, and not only are these gradually but surely diminishing, from the smuggling consequent on the high duties so unwisely imposed on cottons and woollens, and other goods of general consumption, but at this moment, in Vera Cruz, the chief port of the Republic, no less than 77 per cent. are claimed by foreign creditors. Of this amount

27 per cent. are assigned to the London bondholders. 24 per cent. to the “ British Convention," which numbers very

few English holders. 10 per cent. extra to replace arrears. 10 per cent. to replace the money at the Mint of Guanaxuato. 8 per cent. for the French Convention.

79 The Mexican Government has been accused, and not without some reason, of having frittered away the Church property recently nationalized ; but it must be remembered that, while forced contributions, plunder, and immense supplies from the Church and its supporters, have enabled Generals Zuloaga and Miramon to sustain the civil war for three years, the Constitutional Government abstained from suct acts, and have the sole robbery of the conducta at Lagos, towards the close of the war, to answer for. Their resources during this lengthened period were drawn from advances by individuals, on bonds for far larger sums, payable at the close of the war, and from the actual sale of a great part of this property at 25, 20, and even 15 per cent. of its supposed value.

The advantageous disposal of the remainder was most detrimentally affected by the circulation of reports calculated to prevent the restoration of confidence, and the cousequent investment of money in the purchase of nationalized property; and the Government have consequently been obliged by their necessities, after trying in vain every better mode of sale, to dispose of the property on “pagarés" (or promissory notes), to be paid off by instalments extending over several years.

These “pagarés," again, they are compelled to sell by auction, at a heavy discount, to provide for the daily subsistence of the troops, and the maintenance of the Government.

From the foregoing details your Lordship will at once understand the precarious condition of Mexico, and that, without some foreign interposition, the dismemberment of the Republic and a national bankruptcy appear all but inevitable.

The session of the Mexican Congress, after some preliminary time spent in verifying the elections, was opened on the 10th; and I have the honour to inclose copies of the speeches of President Juarez, and of the President of the Congress, on that occasion.

I am sorry to say that I entertain but little hope of much practical advantage from their deliberations ; indeed, I know not that much is in their power, especially with regard to the most pressing danger, the financial position of Mexico.

The bondholders might, perhaps, save their capital by submitting to a temporary suspension of interest; and the establishment of a more equitable tariff, which the Government are pledged to me to urge upon the Congress, may lay down a better future basis of revenue.

But Mexico should, whatever her distress, at least commence at home; and the holders of the immense internal debt should be the first to suffer for the ruin their own folly has caused or abetted. I much fear that the Republic has not produced men of sufficient energy and honour to adopt this course, unsustained by some foreign interposition.

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