USA > Texas > The history of the republic of Texas, from the discovery of the country to the present time; and the cause of her separation from the republic of Mexico > Part 28
Note: The text from this book was generated using artificial intelligence so there may be some errors. The full pages can be found on Archive.org (link on the Part 1 page).
Part 1 | Part 2 | Part 3 | Part 4 | Part 5 | Part 6 | Part 7 | Part 8 | Part 9 | Part 10 | Part 11 | Part 12 | Part 13 | Part 14 | Part 15 | Part 16 | Part 17 | Part 18 | Part 19 | Part 20 | Part 21 | Part 22 | Part 23 | Part 24 | Part 25 | Part 26 | Part 27 | Part 28 | Part 29 | Part 30 | Part 31 | Part 32 | Part 33 | Part 34 | Part 35 | Part 36 | Part 37
" In vain do they tell us that this loan project is abandoned. It is a new suare to catch the credulous. Every thing is secretly prepared. Notifications, expostulations, coupons, actions, &c., &c. all are ready to dazzle with the usual noise. But we hope we have succeeded in putting public credulity on its guard against the sinister and mystified efforts thus incessantly employed to entrap the unsuspecting."
This expose not only thwarted General Hamil- ton's schemes by opening the eyes of the French DD 2
404
OPINIONS OF THE FRENCH PRESS
people, but it also led the French press generally to take up the subject, and on the 14th June, 18441, the subjoined article appeared in La Presse :--
" THE TEXAN LOAN.
" THE COMMERCIAL BANK OF LAFITTE AND COMPANY.
"The project of a loan on the part of the republic of Texas, at first publicly announced under the auspices of M. Lafitte, then withdrawn after the declaration made by the French government in its official lists, appears to be definitively and irrevocably abandoned. It is, however, not so; and the bait is presented anew to the cupidity of stock-jobbers, and the ignorance of an- nuitants, with a charlatanism unparalleled.
" The question of national interest is the first point in which we ought to regard this unjustifiable attempt. What ! Is it at a moment, when our finances are deeply encumbered-the very day after the Government and the Chambers have refused to ap- portion a sum for iron railroads, in the fear that the issue of vouchers with interest at 4 per cent., would create a competition in state securities-when the minister of finance is calling upon the French capitalists to supply our deficits and secure our ser- vices-is it at such a moment, we say, that Paris is to be inun- dated with an issue of thirty-seven millions to benefit a foreign republic ? And the banker who has the temerity to give the sanction of his name to this anti-national scheme, is M. Lafitte ! M. Lafitte, who, after having succeeded in acquiring a long and prodigious popularity, would now make it appear that he is no Jonger proof against former delusions, the last glimmerings of which were extinguished at the bottom of the quarry of the Plusterer's Society and in the mines of Chaney Saint Stephen.
"But we turn from this part of the subject, on which the pub- lic cannot be too sufficiently edified, and address ourselves to a rigid examination of the Texan loan, a dry inquiry, but never- theless an useful one in a moral sense, and more especially useful
405
ON THE TEXAN LOAN.
for the evil that may be averted by the exposition. What is the destination of the loan ? What are its conditions? What the guarantees ? What is M. Lafitte's position in the speculation ? Is the affair profitable to the borrower and the lender; or on the contrary, is it disastrous to both, and excellent only for M. Lafitte ?
" The loan, says the prospectus, is destined to the extinction of the old debts of Texas, which are represented by the bonds issued during the war with Mexico, and by a debt contracted with the United States bank. In consequence of these dispo- sitions the liquidation of the Mexican debt ought, in reality, to turn to the advantage of the English, who hold the securities. This is a result that ought necessarily to follow the act of media- tion of the 14th of November, 1840, between Mexico and Texas, interposed at the instance of the British government. This act stipulates, in effect, that ' if the republic of Texas shall obtain, through the mediation of her Britannic Majesty, an armistice and a treaty of peace with Mexico, she will consent to charge herself with one million sterling (25,000,000 francs) of the foreign debt contracted by the republic of Mexico.'
" The destination of the money demanded by M. Lafitte of the French capitalists is thus fixed by the document just cited, the result of which is, that the loan to be raised in Paris will be turned to the benefit of our excellent allies the English.
" The loan is to be divided into 37,000 bonds of 1000 francs each, thus representing a nominal debt of 37,000,000 francs. These bonds are to be divisible into 37 series, redeemable at par, by an annual withdrawing of at least 1000 bonds. The capital advanced for each bond is to be only 750 francs in exchange for title to 1000 francs. The annual interest is to be 6 per cent. on the nominal amount of the bond. Of the produce of the nego- tiation, 50 per cent. only of the nominal capital (500 francs per bond) will be lodged with the Texan government, a deduction to be made of 6 per cent for the first year's interest. The 25 per cent. of the surplus will be reserved as an account current by M. Lafitte, to be placed at the disposal of the Texan government
-
w
406
OPINIONS OF THE FRENCH PRESS
after the liquidation, in capital and interest, of one-fourth part of the loan.
"The mechanism of these combinations surpasses every thing that could be conceived by the most cunning usurer in a private transaction, as the following calculations will demonstrate :---
" The republic of Texas delivers 37,000 bonds of -1000 francs, representing a capital of 37,000,000 francs ; but on each bond 750 francs only are to be advanced by the subscriber. Here, in the onset, is a loss of 25 per cent. to the borrower on a sum of 9,250,000 francs. Such is Combination the first !
" The interest stipulated at 6 per cent. to save appearances, is due, and ought to be paid on the nominal sum and not on the amount advanced. The fictitious rate of 6 per cent. is thus in reality placed by that of 8 per cent. Combination the second !
" Of the sum of 750 francs advanced by the subscriber, 250 francs are to be remitted to the borrower at a very remote period, probably not less than nine years. Here is then a second sum of 9,250,000 francs, which will not reach the Texan republic. This sum of nine millions two hundred and fifty thousand franes is to remain, for at least nine years, in the hands of M. Lafitte. Combination the third !
" Of these 9,250,000 francs not at the disposal of the Texan republic, she pays to the subscribers six per cent. interest, while M. Lafitte, in his account on this deposit, allows FOUR per cent. The borrower thus loses a difference of interest of two per cent.+ for at least nine years on this enormous capital, which he is pre-
" This ' combination' reminds me of one of the many instances of success that attended the late Mr. Rothschild's financial opera- tions. In contracting the Brazil loan of two millions, Mr. R. made net €89,000, viz. two per cent. commission, €40,000, and the first half-year's dividend, $59,000 ; the contract having been made in January, 1825, with interest from the 1st of October preceding, whereas he issued it with interest from the 1st of April. 1825 !-- N. D. M.
407
ON THE TEXAN LOAN.
cluded from making use of in any manner whatever. Here is a real loss of two. millions. Combination the fourth !
" In fine, on the fifty per cent. of the loan at the disposal of the republic, the interest of the first year, six per cent. is retained in advance. The borrower thus paying interest upon interest. Combination the fifth !
" So that in reality by reducing all the above 'combinations' to their simple and true meaning, the Texan government will receive only 440 francs net for every obligation of 1000 francs ; in other words, less than a moiety ! Is not this the act of a child that deserves banishment ?
" Let us now place before the reader a veritable picture of the annual charge which Texas thus imposes upon herself by this loan :----
Francs.
1. Redemption, at par, of 1,000 bonds every year 1,000,000
2. Interest at 6 per cent. on one moiety of the loan
(18,500,000 francs) . 1,110,000
3. Interest at 6 per cent. on one-fourth of the loan not contributed by subscribers .
· 555,000
4. Loss of 2 per cent. interest on one-fourth of the
loan, remaining in trust in Lafitte's bank. . 185,000
5. Commissions to M. Lafitte, which can be at present only named as Memorandum
2,850,000
" The Texan Exchequer will then have to pay every year the sum of 2,850,000 francs for a capital of 16,280,000 francs, which it will have received at the rate of 140 francs for each of the 37,000 bonds issued. In a word, if Texas fulfil her engagements, she will have redeemed at the end of six years a loan which will oppress her in a decreasing ratio, we admit, for thirty-seven years !
" The prospectus announces that the produce of the customs, and five millions of acres of land are to be specially set apart as the guarantee for the loan. But, in the words of M. Lafitte, as expressed in the first edition of the prospectus, from some
408
OPINIONS OF THE FRENCH PRESS
inexplicable motive carefully omitted in the second, 'What is the product of the customs of a country born yesterday ?' What im- portance can attach to the commercial relations of Texas, after the tedious warfare it has sustained, and will doubtless yet have to sustain against Mexico ?
" The five millions of acres given as a guarantee for thirty-seven millions of francs, represent a value of 7 francs 40 cents per acre, (18 francs 28 cents per hectare). But is this estimate of 7 francs 40 cents. the precise value of the land ? In a word, if it were desired to sell the five millions of acres, would it be easy to realise 37,000,000 francs ? Certainly not. In order to give an undue importance to this part of the guarantee, M. Lafitte estimates the acre ar 7 francs 40 cents ; this being the computa- tion which exactly covers the amount of the loan. But, by the side of M. Lafitte's allegations, we have those of a company formed for the sale of lands in Texas, which affirm that 7 francs 40 cents per acre is much too high a rate, considering the sales that have been already effected by that government. There is something still worse, namely, that the lands sold by government may be sold with their public liabilities, which are worth only 25 per cent., and which government will be obliged to take at par. It necessarily results from this circumstance that the lands sold by government at the rate of 24 francs per acre, will be better disposed of than those sold subject to the loan guarantee at the rate of 7 francs 40 cents. Since the purchaser at 21 francs will be free from the public liabilities, the effect of which is a loss of 75 per cent.
" Finally, as to the solidity of the security. Suppose the value of the ceded land should cover the whole of the loan, there would exist a still stronger reason for inquiring into the nature of the property. Texas is a country ' born yesterday,' a country in a state of rebellion, which was conquered by the success of its arius, a sort of independence which has been acknowledged by a few nations scarcely two years. Is there not good ground for antici- pating that Mexico will renew the contest ? Nay, but recently it was announced that Mexican troops were actually on their march
409
ON THE TEXAN LOAN.
against Texas to recommence hostilities. In such a case what would then become of ' the beautiful and fertile lands'-the public domain which, according to M. Lafitte, is to him alone a source of immense wealth ? What, we ask, will be the fate of that country to which most of the public journals invited attention some months since with a zeal which reminded one of those halcyon days when a well-known financier disposed of a part of the press for the purpose of puffing off the Spanish loans ?
" The prospectus is indited in the most seductive terms, and does not disdain to employ a falsehood for the purpose of having it believed that the risk of the lender is reduced to 50 per cent., and that the redemption of the capital and interest is, during the first five years, completely protected against all casualties.
" How could Lafitte's bank have descended to such means to allure the confidence of the credulous ! How indignant must cvery one feel on reading sentences fraught with such formal assurances, the utter falsehood of which is apparent upon the slightest examination. We have written the word and we repeat it. IT IS FALSE THAT THE RISK OF THE LENDERS IS REDUCED TO FIFTY PER CENT. It is also false that the redemption of the capital and interest may, during five years, be completely pro- tected from all casualties if the Texan government should not fulfil its engagements.
"We say to those of whom the money is solicited, that the risk is upon the whole sum subscribed, and that the payment of the interest and capital is not secured for five years.
"II. D."
It appears also from the following article, pub- lished in the Times of August 31, IS41, that the Texans themselves think that a loan would not extricate them from their present embarrassments, but on the contrary, that it would involve them beyond all redemption :--
Má
410
OPINIONS OF THE LONDON PRESS.
"At New Orleans the money market was quiet. The specu- lators in Texan currency (paper) would not pay the prices that had formerly ruled, premising that the loan would never be com- pleted; and that if it was, no part would be made available to pay off the outstanding liabilities of the republic.
" On the subject of the Texan loan a private letter has been received from Galveston, which, originating as it does from the Texans themselves, shows that while their neighbours are doubt- ful whether they will get the loan, they themselves are not anxious for the completion of the obligation, and are far from satisfied at the accommodation afforded them by their friends in Paris. The conditions of the loan being, that Texas is to receive 750 francs, or about 150 dollars for shares of 1000 francs, or 200 dollars, paying 6 per cent. on 35,000,000 francs, mortgaging her custom revenues for ten years, selling 3,000,000 acres of her best lands, and leaving the deposit of 25 per cent. for two years at Lafitte's for the further guarantee of the shareholders, the calcu- lation is made as follows :- The amount of 35,000,000 francs is set down in dollars at 6,510,000, (the nominal amount being 7,000,000 dollars,) from which, deducting the discount of 25 per cent., the sum of 4,882,500 dollars is left. This is the value at 75 per cent. ; but again deducting the sum which is to lie for two years at Lafitte's, it is reduced to 3,255,000 dollars, (for which they have to pay two years,) the remaining 1,627,500 dollars is to be paid at the end of the two years. Thus they say they borrow 3,255,000 dollars, for which they have to pay two years' interest, amounting to 810,000 dollars, or above 13 per cent. per annum, leaving in their hands 2, 115,000 dollars. The arrival of the remaining part of the loan will give them 4,012,000 dollars, for which they will pay a yearly interest of 120,000 dol- lars. After this detailed calculation a hope is expressed that the loan, which is regarded as an infliction instead of a blessing, may never reach Texas."
In order to obtain money, even on the ruinous terms set forth by La Presse, the proposed treaty
411
THE " UNRATIFIED " TREATY.
between England and Texas, which was to silence the Mexican cry of justice, was brought forward, and every effort was made to induce the world to believe that the treaty had been duly ratified by the two contracting parties, my Lord Palmerston and the adroit slave-holder, General Hamilton ; but the treaty between England and Texas, of which the following is a correct copy, has not been ratified, nor can her Majesty's government entertain any proposition to that effect in the face of passing events, and with such a beacon as that contained in Lord Durham's report on Canada.
" TREATY OF COMMERCE AND NAVIGATION BE- TWEEN THE REPUBLIC OF TEXAS AND GREAT BRITAIN.
" THE Republic of Texas and her Majesty the Queen of the United Kingdom of Great Britain and Ireland, being equally desirons of affording every facility and encouragement to their respective citizens and subjects engaged in commercial intercourse with each other, have nominated as their plenipotentiary to con- clude a treaty for this purpose, that is to say :
" The Republic of Texas, General James Hamilton, &c. &c.
" And her Majesty the Queen of the United Kingdom of Great Britain and Ireland, the Right Honourable Henry John Viscount Palmerston, Baron Temple, a peer of Ireland, a member of her Britannic Majesty's most honourable Privy Council, a Member of Parliament, Knight Grand Cross of the most honourable Order of the Bath, and her Britannic Majesty's principal Secretary of State for Foreign Affairs :
" Who, after having communicated to each other their respect-
412
THE " UNRATIFIED" TREATY
ive full powers, found in good and due form, have agreed upon and concluded the following articles :--
" ARTICLE 1. There shall be reciprocal liberty of commerce and navigation between and amongst the citizens of the Republic of Texas and the subjects of her Britannic Majesty ; and the citi- zens or subjects of the two countries respectively, shall not pay in the ports, harbours, roads, cities, towns, or places whatsoever, in either state, any other or higher duties, taxes or imposts, un- der whatsoever name designated or included, than those which are there paid by the citizens or subjects of the most favoured nations ; and the citizens and subjects, respectively, of the two high contracting parties shall enjoy the same rights, privileges, liber- ties, favours, immunities and exemptions in matters of commerce and navigation, that are granted, or may hereafter be granted, in either country, to the citizens or subjects of the most favoured nation.
" No duty of customs, or other impost, shall be charged upon any goods the produce of the country, upon importation by sea or by land, from such country to the other, higher than the duty or impost charged upon goods of the same kind, the produce of, or imported from any other country ; and the Republic of Texas and her Majesty the Queen of the United Kingdom of Great Bri- tain and Ireland, do hereby bind and engage themselves not to gruit any favour, privilege, or immunity, in matters of commerce and navigation, to the citizens or subjects of any other state which shall not be also and at the same time extended to the citizens or subjects of the other high contracting party, gratuitously, if the concession in favour of that other state shall have been gratuitous, or on giving as nearly as possible the same compensation or equi- valent, in case the concession shall have been conditional.
" ART. 2. No duties of tonnage, harbour, lighthouse, pilotage, quarantine, or other similar or corresponding duties, of whatever nature, or under whatever denomination, shall be imposed in either country, upon the vessels, or upon any articles the growth, produce, or manufacture of the other, in respect of voyages be- tween the two countries, if laden, or in respect of any voyage, if
413
BETWEEN TEXAS AND GREAT BRITAIN.
in ballast, which shall not be equally imposed in like cases on national vessels, and in neither country shall any duty, charge, restriction, or prohibition, be imposed upon, nor any drawback, bounty, or allowance be withheld from any goods imported from, or exported to, any country in the vessels of the one country, which shall not be equally imposed upon or withheld from such goods, when so imported or exported in the vessels of the other country.
"ART. 3. The citizens and subjects of each country shall enjoy full liberty to go to the ports and harbours of the other country, where other foreigners are allowed to enter, to unlade their mer- chandize therein, to hire and occupy houses, and peaceably to conduct their respective trades and professions.
" The ships of war of both countries, respectively, shall have the liberty to enter freely and touch at all such ports in each country into which the ships of war of any other nation are per- mitted to enter; subject, however, to the regulations, laws, and statutes of the respective countries.
" ART. 4. The stipulations of the present treaty shall not be considered as applying to the navigation and carrying trade be- tween one port and another, situated in the dominions of one contracting party by the vessels of the other, as far as regards passengers, commodities, and articles of commerce. Such navi- gation and transport being reserved by each contracting party to national vessels.
" ART. 5. The high contracting parties reserve for future ne- gociation, at such time as they may mutually agree upon, the condition upon which the trade and navigation shall be regu- lated between the Republic of Texas and her Britannic Majesty's colonial possessions in Europe, Asia, Africa, and America.
"ART. G. Whereas in the present state of Texan shipping the Republic of Texas would not enjoy the full benefit of the reci- procity intended by this treaty, if no vessel were to be admitted into British ports as a Texan vessel, unless it had been built within the territory of Texas, it is therefore agreed, that for the space of eight years, to commence from the date of the exchange
-
414
THE "UNRATIFIED" TREATY
of the ratifications of this treaty, any vessel, wheresoever built, being bona-fide the property of, and wholly owned by, one or more citizens of the Republic of Texas, and whereof the master and three-fourths of the mariners, at least, are naturalized citi- zens of the said Republic, or persons domiciled in that Republic by act of the government as lawful citizens of the Texan Repub- lic, to be certified according to the laws of that country, shall be considered as Texan vessels. Her Majesty the Queen of the United Kingdom of Great Britain and Ireland, reserving to her- self the right, at the end of the said term of eight years, to claim that the provisions of the British navigation act relative to the nationality of foreign vessels, shall be strictly applied to Texan vessels in British ports.
"ART. 7. The consuls and vice-consuls of each country shall, within the territory of the other, enjoy all the rights, privileges, and immunities which are accorded to such functionaries by the law of nations; and it is provided that in the ports of each country, especially, the authorities shall give all due legal assist- ance and protection for the apprehension, safe keeping, and deli- vering of all deserters from the ships of war and trading vessels of either country ; and all the powers and privileges granted in re- spect to the matters to which the stipulations of this article relate, by either of the contracting parties to any other nation, shall be granted by such contracting party to the consul, vice-consuls, ships of war, and trading vessels of the other.
" ART. S. If any ships of war or merchant vessels should be wrecked on the coasts of either of the high contracting parties, such ships or vessels, or any parts thereof, and all furniture and appurtenances belonging thereunto, and all goods and mer- chandize which shall be saved therefrom, or the produce thereof, if sold, shall be faithfully restored to the proprietors, upon being claimed by them, or by their duly authorized factors; and if there are no such proprietors or factors on the spot, then the said goods and merchaudize, or the proceeds thereof, as well as all the papers found on board such wrecked ships or vessels, shall be de- livered to the Texan or British consul, in whose district the wreck
415
BETWEEN TEXAS AND GREAT BRITAIN.
may have taken place ; and such consul, proprietors, or factors, shall pay only the expenses incurred in the preservation of the property, together with the rate of salvage which would have been payable in the like case of a wreck of a national vessel ; and the goods and merchandize saved from the wreck shall not be subject to duties, unless cleared for consumption.
"ART. 9. The exercise of the rites of religious worship and freedom of conscience, shall be reciprocally secured to the citizens and subjects of each country, by the government of the other. The rights of sepulture shall be reciprocally accorded by each of the contracting parties to the other ; and there shall be no law passed by either government that shall violate the rights of pro- perty, or limit the power of bequeathing personal estate by will or testament.
" The citizens or subjects of the one country residing in the `other, shall not be liable, under extraordinary warrants or other- wise, to compulsory services, or to forced loans; and on all questions affecting the rights of persons or property, the courts of judicature of the one country shall be impartially open to the citizens or subjects of the other.
" In the event of war between the contracting parties, the citi- zens or subjects of the one country residing in the other, shall, reciprocally, have twelve months, after a formal declaration of the same, to depart with their property and effects, and without any hindrance or disturbance whatsoever.
" ART. 10. The present treaty, when the same shall have been ratified by the President of the Republic of Texas, by and with the advice and the consent of the senate, and by her Britannic Majesty, shall be binding and obligatory on the contracting par- ties, for eight years from the date of its signature ; and further, until the expiration of twelve months after one of the high con- tracting parties shall have notified to the other an intention to terminate its duration.
Need help finding more records? Try our genealogical records directory which has more than 1 million sources to help you more easily locate the available records.