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 consequent 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.

The effort will always be made to make the foreigner the chief sufferer from the undoubtedly bankrupt state of the country.

One of the first acts of the Congress will be to verify the election of the President, which has recently taken place throughout the country unless one of the candidates has a majority of all the votes cast, the Congress selects; and it is thought very possibly that by this course Señor Juarez, though highest on the list of candidates, may be defeated, and that General Ortega may be named.

Her Majesty's Envoy Extraordinary and Minister Plenipotentiary, Sir Charles L. Wyke, and Mr. Johnston, arrived safely in this capital on the 9th instant.

Lord J. Russell.

GEORGE B. MATHEW.

No. 8.-Sir C. Wyke to Lord J. Russell.-(Received June 27.) (Extract) Mexico, May 27, 1861. IN a long conversation I had with Señor Guzman I dwelt on the astonishment that would naturally be felt by Her Majesty's Government when informed that no steps had yet been taken for the payment of the 660,000 dollars, which we must insist on being refunded to the parties from whom it had been stolen. I added that the honour of the Mexican Government was directly concerned in this matter, and therefore fully expected to hear from him some explanation.

Don Leon Guzman was profuse in his professions of being willing to do all that could in justice be required of him, but whenever I attempted to get him out of generalities, he avoided the difficulty by stating that until I was formally installed as Her Majesty's Minister here, he could not officially treat the question with me, but again expressed his willingness to render every satisfaction when the proper time for so doing should arrive. As soon after the departure of the mail as possible I shall put his sincerity to the test.

The term of delay granted for the repayment of the money stolen from the "conducta" by General Degollado expires on the 11th of next month, and I have every reason to believe that they are not prepared to meet the demand that will then be made upon them.

Lord J. Russell.

C. LENNOX WYKE.

No. 9.-Sir C. Wyke to Lord J. Russell.—(Received June 27.) (Extract.) Mexico, May 27, 1861. It will be very difficult, if not impossible, to give your Lordship a correct idea of the present state of affairs in this unfortunate

country, so utterly incomprehensible is the conduct of the Government which at present presides over its destinies.

Animated by a blind hatred towards the Church party, the present Government has only thought of destroying and dissipating the immense property formerly belonging to the clergy, without, however, at the same time taking advantage of the wealth thus placed at their disposal to liquidate the many obligations which at present weigh them down and cripple their resources.

The Church property has generally been supposed to be worth between 60,000,000 and 80,000,000 Spanish dollars, the whole of which appears to have been frittered away without the Government having anything to show for it. A considerable amount has, doubtless, been spent in repaying advances at exorbitant interest, made to the Liberal party when they were fighting their way to power; but still enough ought to have remained after satisfying their creditors to have left them very well off, and in a better position as to their pecuniary resources than that held by any other Government.

Since their Declaration of Independence, according to a Decree issued by them some time ago, anybody denouncing Church property has the right to purchase it on the following terms: 60 per cent. of the value of such houses or lands are to be paid in bonds of the internal debt (which bonds are in reality only worth 6 per cent.), and the remaining 40 per cent. in "pagarés" or promises to pay hard cash, at 60, and even 80 months' sight. These "pagarés," of course, were subsequently discounted at an enormous sacrifice, as the Government was pressed for money, and willing to pay any nominal value to obtain it without delay. In this way 27,000,000 dollars' worth of Church property has been squandred in this city alone, and the Government, now without a 6d., is endeavouring to raise a loan of 1,000,000 dollars to pay their current expenses.

The Church party, although beaten, are not yet subdued, and several of their Chiefs are within 6 leagues of the capital, at the head of forces varying from 4,000 to 6,000 men. The notorious Marquez is one of these, and he has lately defeated several bodies of Government troops sent against him.

The religious feelings of a fanatic population have been shocked by the destruction of churches and convents all over the country, and the disbanded monks and friars wandering about amongst the people, fan the flame of discontent, which is kept alive by the women, who, as a body, are all in favour of the Church.

Those well acquainted with the country watch this movement with anxiety, and say that unless promptly checked, it will lead to the downfall of the present Government, and renew again all the horrors of a civil war.

In the meantime Congress, instead of enabling the Government to put down the frightful disorder which reigns throughout the length and breadth of the land, is occupied in disputing about vain theories of so-called government on ultra-liberal principles, whilst the respectable part of the population is delivered up defenceless to the attacks of robbers and assassins, who swarm on the high roads and in the streets of the capital. The Constitutional Government is unable to maintain its authority in the various States of the Federation, which are becoming de facto perfectly independent, so that the same causes which, under similar circumstances, broke up the Confederation of Central America into 5 separate Republics are now at work here, and will probably produce a like result.

This state of things renders one all but powerless to obtain redress from a Government which is solely occupied in maintaining its existence from day to day, and therefore unwilling to attend to other people's misfortunes before their own. The only hope of improvement I can see is to be found in the small moderate party, who may step in perhaps before all is lost, to save their country from impending ruin. Patriotism, in the common acceptation of the term, appears to be unknown, and no one man of any note is to be found in the ranks of either party. Contending factions struggle for the possession of power only to gratify either their cupidity or their revenge, and in the meantime the country sinks lower and lower, whilst its population becomes brutalized and degraded to an extent frightful to contemplate.

Such is the actual state of affairs in Mexico, and your Lordship will perceive therefore that there is little chance of justice or redress from such people, except by the employment of force to exact that which both persuasion and menaces have hitherto failed to obtain. Lord J. Russell. C. LENNOX WYKE.

No. 10.-Sir C. Wyke to Lord J. Russell.-(Received July 29.) (Extract.) Mexico, June 24, 1861.

IN my despatch of the 27th ultimo, I stated that I should take an early opportunity of testing the sincerity of Don Leon Guzman, the new Minister for Foreign Affairs, with reference to his assertion to me that the Mexican Government were most anxious to atone, by any means in their power, for the outrage committed at the British Legation in November last.

My interview with him took place on Saturday the 1st instant. He said that legal measures had been instituted against the persons who had stolen the 660,000 dollars on that occasion, and that if they were condemned by the courts, their property would be confiscated, and the proceeds thereof employed towards paying off that sum.

This I told him I had nothing whatever to do with, having merely to insist on the repayment of the money stolen, without in any way being concerned in the means by which it was to bo procured.

I pointed out to Señor Guzman that the speedy repayment o the sum above-mentioned was essential, not only for the honour and credit of the Mexican Government, but also for the maintenance of friendly relations between the two countries.

Don Leon then assured me that before the departure of the next mail he should be able to furnish me with such explanations relative to this matter as would prove satisfactory to Her Majesty's Government.

With regard to the money robbed from the "Laguna Seca" conducta, he informed me that it should be paid at the end of the 4 months named as the term for liquidating this claim.

On the Monday following, that is to say the 3rd of June, appeared in most of the newspapers a decree issued by the President, under the authority of the Congress, whereby all payments to the creditors of the National Treasury were suspended for the space of one year, with the exception of the claim commonly known as that of the "Laguna Seca" and of the Diplomatic Conventions.

As the claim arising out of the Legation robbery was not specified in the list of exceptions to non-payment, I addressed a note to Señor Guzman on the subject, copy of which, together with a translation of his reply, I have the honour to inclose.

Not deeming the latter satisfactory, I again wrote to him on the 7th instant, in order to maintain the position I had taken, as well also as to prove to him that I was perfectly justified in demanding an explanation as to the omission of all mention of the Legation robbery claim in the Decree of the 29th ultimo, which I herewith inclose for your Lordship's information. Copy of this note I likewise transmit, together with translation of his reply, in which he endeavours to establish by inference the principle that the actual perpetrators of the Legation outrage are alone responsible for the wrong done on that occasion.

Seeing the necessity of at once checking this attempt to shift the responsibility from off the shoulders of the Mexican Government, I again addressed Señor Guzman on the 14th instant, which note had the effect of producing a reply, showing considerable temper, and in which it is plainly asserted that they will do nothing that they are not strictly bound to perform by the agreement made with Mr. Mathew at the time of his recognition of the Juarez Government.

The tone of this communication was, taking intc, consideration [1861-62. LII.]

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