Synthesized answer
Based solely on the provided passages, the proposed 150,000,000 peso loan is presented as a necessary measure to address an immediate emergency, but the text does not offer enough information to assess whether it is a comprehensive and sustainable solution or merely a temporary fix. The loan is described as "exclusively destined to cover the deficit" [2] and as "the only effective way to meet this important emergency" [1], suggesting it is a stopgap. However, the passages also acknowledge that the real deficit is larger than the stated monthly figure because it omits a "great floating debt" and ongoing "pacification" expenses [2], indicating the loan may not fully address the underlying problem.
The passages do suggest some long-term optimism, noting that when peace and normal railway service are restored, "the discrepancy between income and expenses will gradually diminish" [3]. This implies the loan is intended to bridge a temporary crisis until revenues improve. However, the text also states that major obligations like "public exterior debt" and "claims on account of damages caused by the revolution" are being postponed [4], meaning the loan does not address these future…
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From the book
the day in which the discrepancy, which is now one of the most serious difficulties of the Government, shall disappear. "As the indispensable bases for these objects can be realised in the effective liquidation of the present deficit, since its existence would indefinitely retire the equilibrium desired, the Executive believes the time has come when it is necessary to obtain a loan exclusively destined to fill such objects, and hopes that the National Congress, sharing with him the conviction that such a means is the only effective way to meet this important emergency, will at once grant…
000,000 pesos to be exclusively destined to cover the deficit appearing in the national budgets until they are adjusted. The text of the important bill to which we refer, and which will soon go before Congress, states as follows: "The Congress of the Union has been already informed by the Executive that the budgets of the federation at present show a monthly deficit of about 5,000,000 pesos. "To make up this figure we took into account only the normal expenses of administration, omitting the great number of small obligations of the Government which were not considered urgent, but which in any…
very force of circumstances be put off until later, and should therefore be excluded from consideration for the present. "On the other hand the present incomes, in spite of the fact that conditions of the country have not yet resumed normality, are in comparison greater than those which were being received in the period before the revolution and in view of this fact, which has some significance as showing the vitality of our people, it is logical to hope that when peace is re-established in the whole of the Republic and railway service and communication in general are completely normalised,…
necessitating constant expenses, the supposition that the real deficit will exceed the amount above is not exaggerated. "In order to arrest the gravity of the foregoing considerations it is sufficient to state others in respect to the future which makes a favourable solution of the financial problems appear less remote. "On the one hand for some time the Government has not believed the time has come to pay divers claims which may be presented on account of damages caused by the revolution, although it is now studying the particular way to recognise and liquidate them, and in due time will…
he second loan which Mr. Carranza seeks amounts to 50,000,000 pesos to be used to rebuild and reconstruct the railroads. The third loan, for which the authority of the National Congress is asked, is for 100,000,000 pesos to establish a "bank of issue." Something of the financial crisis facing Mexico may be gathered from these brief figures: In May, 1916, the estimated revenue of the Constitutionalist Government was four million pesos, about two million dollars a month. Fourteen months later the estimated revenue was 107,000,000 pesos annually, but the budget called for an expenditure of…
More questions about this book
- If you were explaining Mexico's immediate financial crisis and the proposed solution to someone unfamiliar with economics, how would you describe the problem of the "monthly deficit" and the 150,000,000 peso loan in simple, everyday terms?
- The text mentions a 'great floating debt' resulting from omitted 'small obligations.' How does the existence of this uncounted debt fundamentally alter the true severity of Mexico's financial situation beyond the stated 5,000,000 peso monthly deficit, and what future challenges might it create?
- The Executive expresses a strong preference for an 'interior' loan but anticipates potential justification for a 'foreign' one. What specific economic, political, or nationalistic reasons might drive this preference, and what does this reveal about the Executive's strategic priorities for Mexico?
- The text lists 'high cost of living,' 'raising wages of public employes,' and 'work of pacification' as factors exacerbating the deficit. How might these seemingly disparate issues be interconnected, and what do they collectively suggest about the underlying instability or challenges Mexico faced in 1917?