The situation which I have just outlined is economic, but back of the economic and basically more important is the financial situation. The cause of the economic bankruptcy is to be found in the new conception of the financial organization of Mexico which the Carranza officials have pronounced, and upon which Mexico has been acting for the past seven years. Let us look for a moment at the financial side of the foreign investments in Mexico, for recent activities on the part of the government seem to admit that Mexico recognizes that an important factor in the present national bankruptcy is the loss of foreign capital. This damming up of the flow of foreign investments has been the result of two distinct situations. First is the outrages, the wanton destruction of foreign property and foreign lives by bandits and revolutionaries. The other is the enactment and partial enforcement of drastic anti-foreign laws. One of the strongest pillars of the material prosperity of the Diaz time was foreign investments. The bonanza mines had to become paying low-grade business propositions in order to preserve mining as a national asset. The barren agricultural lands had to be irrigated, with water that fell in mountains hundreds of miles away. More than that, Mexico had to begin to build an industrial machine of railroads and factories which would create new national wealth--the economists of even a generation ago realized that no land, however rich, could prosper from her natural resources alone. These were the axiomatic bases of the economic need of foreign money. The financial need for foreign capital was yet more pressing. At the beginning of the Diaz rule, the trade balance against Mexico was apparently insurmountable, and although year by year it was cut down through the economic development of the country, each year the trade balance has to be evened up. This was the function of foreign investments, and this was the financial reason for its continued encouragement under Diaz. To the last year of his reign, this inflow of foreign money kept coming evenly, in tens and twenties of millions annually. As it came in, balancing the outgo of interest on the national debt and on private loans, it became itself a producer of Mexican wealth, so that in time it would have eliminated the necessity of further forced-draft encouragement for outside investment. That time had not come in 1911, however, when Diaz left Mexico. But the net result of the stoppage of foreign investment in the revolutionary period which followed is to be found to-day in that unpaid interest of nearly $200,000,000 on government securities alone.