Page:Mexico and its reconstruction.djvu/98

80 must be compensated by high interest rates or low rates of issue or both.

That such a basis for the financial rehabilitation of Mexico would be unfortunate is clear. If the debt service guarantees furnish a basis upon which other countries may help her to help herself, she may secure domestic order and a responsible government sooner than would otherwise be her lot. If those debt service contracts now in existence do not furnish such a basis and the Mexican government refuses to enter new ones that will do so in the future, then it must borrow on the chance which it has, unaided, of being able to meet the obligations it assumes. It will perforce load the people with greater obligations than would be necessary otherwise and delay the real reconstruction, which every friend of Mexico must hope may soon begin and rapidly progress. Some sort of effective international guarantee of the foreign loans seems highly desirable, not only for the protection of the investor and not even principally for him, but for the benefit of Mexico and of her people.

The basis on which debts should be paid in justice to the lender often bears a strong contrast to that which is practical. What has occurred in a number of instances in the past may again prove to be the case in Mexico. At first sight even the highest figures discussed do not appear to be an overwhelming load for the nation to bear. Compared to the burden that the World War has put upon many Western nations, the debt seems small. Even assuming that the total may be as great as $1,500,000,000 Mexican, the debt per