with inclose, addressed by them to Mr. Mathew, in reference to this subject, is proof enough that a doubt must always have existed in their minds as to the propriety of claiming British protection for a Convention with which we had nothing in the world to do.

It is useless for these gentlemen to assert that in issuing one order the Mexican Government intended the two Conventions to draw from one and the same fund, that the proportion of the Custom-House assignments to those Conventions was naturally in the ratio of the two debts, and that consequently their conduct can be justified.

If such, indeed, was the intention of the Mexican Government, surely it could not also have been their intention to make one Convention responsible for what belonged to another Convention, and that other Convention of a totally different nationality. This would have been absurd, and I fear, therefore, that but one construction can be put upon the whole affair; the order on the CustomHouses was simply a piece of trickery on the part of the Mexican Government, nobody took the trouble to counteract it, and we alone have been the dupes to our own prejudice, but to the profit of others.

There is one fact which cannot be disputed. A certain order, the very essence, if I may use the expression, of both Conventions, but which does not exist at the time of ratification, becomes by anticipation an actual part of both. By that order, not a separate one, be it remarked, for each Convention, 12 per cent. of import duties is to be set apart for satisfying the demands of both Conventions; consequently there enters an idea of partition, the entire 12 per cent. being the sole property of neither Convention: we, therefore, have no right to the whole, nor has the Spanish Convention any right to it, but we have been made responsible for the whole, and our agents have applied to us for protection when the whole was not given to us; moreover, Mr. Doyle in his Sub-Convention states positively that the whole is ours in virtue of the actual Convention, while the actual Convention proves it is not ours by Article IV, for that Article and the original Custom-House orders are, I might almost say, synonymous terms, and the latter distinctly states that it is not ours.

The 12 per cent. of import duties then is ours, and is not ours: it is ours, because we have claimed it and our claim has not been questioned; it is not ours, because whenever it has been obtained a sixth part has always been taken away from us.

It is now perhaps too late to remedy the evil that has been done, but henceforward it will be our fault if Spain does not look after Spanish and England after English interests, whenever the moment arrives for reinstating the Conventions in the position they lost

through the Government Decree of the 17th ultimo, which amongst other payments suspended those belonging to Diplomatic arrange

ments.

Far be it from me to make any direct accusation against those who have been principally to blame in this matter, but I cannot acquit Messrs. Martinez del Rio of great and culpable negligence. As agents of the British Convention fund they ought to have known that whatever may have been the object of the Mexican Government in issuing but one Custom-House order for two Conventions, it never could have been intended that the British Legation alone was to see that order carried out, to the prejudice of its own and the profit of Spanish interests; it was their bounden duty to have called the attention of the Legation to the existing state of affairs, and they left that duty undone.

I need not, of course, assure your Lordship that in thus accusing Messrs. Martinez del Rio of great negligence, I have no intention or wish whatever to cast a slur upon their character as honourable men: still I feel that, in the interests of all parties concerned, it would be much better, for obvious reasons, to place the agency in other hands; and I do not think I can recommend to your Lordship a better or fitter person to succeed Messrs. Martinez del Rio than Mr. Consul Glennie, who is now auditor of the fund, and who, I feel sure, has the esteem of all those who are connected therewith. It appears to me, too, that it would be more becoming for the Convention to have its agency in our Consulate, and I cannot help thinking that such an appointment as the one I have now the honour of proposing to your Lordship would tend greatly to diminish the existing causes of complaint.

I have only now further to call your Lordship's attention to the fact that there are but few Englishmen holders of Convention stock at the present time; it has passed on 'Change into other hands, principally Mexican, and I have, for purposes of reference, accompanied my Memorandum on the Convention with a list of those who were bondholders when the first dividend took place, as well as of those who are now holders of Convention stock; and it is worthy of remark, that even during the first 6 months after the ratification of the Doyle Compact, bonds were eagerly bought up in the moneymarket, so great was at that time the confidence inspired by an agreement for the due fulfiment of which Great Britain was supposed to be a responsible party.

Such, my Lord, is the account of the British Convention, past and present; its length may, perhaps, seem to require some apology on my part. Had I, however, curtailed it, I much fear I should have failed in the original object I had in view, and that so far from being useful at a future period for reference, this despatch and

its inclosures would merely have added to the difficulties connected with the Convention.

While, then, I sincerely trust that, in its present state, this will not be found to be the case, may I request your Lordship, should my proposals meet with your approbation, to be good enough to send me such instructions as will admit of immediate action, not only as regards the future agency of the British Convention, but also as regards the restoration of the Spanish Convention to the protection of its rightful owners ?

Everything connected with the so-called British Convention has got into such a tangle of confusion, that it would have been impossible for me to have understood the actual state of the case without the assistance of Mr. Walsham, whose experience here, joined to the untiring assiduity he has displayed in elucidating the whole question, and putting the numerous inclosures of this despatch into proper order, have been of the greatest service in enabling me to transmit a statement which I hope may hereafter prove useful for reference, whenever the subject of this Convention and its numerous complications shall again be brought under the notice of the Foreign Office.

Lord J. Russell.

I have, &c.

C. LENNOX WYKE.

(Inclosure 1.)-Memorandum on the British Convention.

Mexico, August 20, 1861.

ON the 15th of October, 1842, Mr. Pakenham signed a Convention with the Mexican Government, in which it was stipulated that certain recognized claims, amounting to about 250,000 dollars, should be formed into a Consolidated Fund, to be paid off, capital and interest, by a percentage on the import duties at the maritime Custom-Houses of Vera Cruz and Tampico.

This Convention was not carried out by the Mexican Government; and on the 4th December, 1851, Mr. Doyle signed a fresh one, in which not only the claims under the Pakenham Convention (see annexed Paper A), but others, which had been recognized by both the English and Mexican Governments, and had indeed formed separate Diplomatic arrangements, were included (see Papers B and C).

By Mr. Doyle's Convention the claims, amounting to 4,984,914 dollars, were likewise formed into a Consolidated Fund, the Mexican Government obliging itself to pay thereupon 5 per cent, as sinking fund, and 3 per cent. as interest, until the debt should be paid off.

To meet this 5 per cent. and 3 per cent., it was agreed that a certain portion of the annual Customs revenue should be set apart, and half-yearly dividends take place; and it was further stipulated

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 314,961 dollars 59 cents (see