The ruin of the economic structure of Mexico lies bare for any one to see, and beneath it is the rotted structure of the old financial system. The closing of the banks, the destruction of credit, the shutting off of the relief which might have been given by the use of American currency, seem at the root of most of the ills which then beset Mexico, because they are at the root of the lack of faith of the people and their fear of the caprices of the morrow. For instance, to-day in Monterey, the great industrial center of northern Mexico, there are no banks save two private houses where money can be left on deposit, and a few exchange offices. Where, in 1910, the four Banks of Issue had more than $10,000,000 out in industrial, mining and farm loans, there is hardly as much as $250,000 loaned to-day, and that is by American banks on the border. The safe commercial paper which circulates in Northern Mexico is checks on American banks. The drafts of strong mining and oil companies form the chief basis of money transfer, and are shipped from place to place all over Mexico. Optimists call this a peaceful penetration of American credit into Mexico, and so it is, but all that can be done from outside of Mexico is but a drop in the bucket compared with her financial needs. Credit within and without must be established, and that is a problem which rests with Mexico alone. To understand at all the mountain of distrust which looms before her, it is necessary to set down, briefly, the condition of the Mexican foreign debt. The external government debt is $173,000,000, and on this interest has been defaulted for more than eight years, a total of $50,000,000 remaining unpaid. The internal national debt is $67,000,000 and the defaulted interest $20,000,000. State and other debts (save railroads), which have been guaranteed by the government are $33,000,000 and $10,000,000 in interest. The bonds of the National Railways of Mexico, guaranteed by the Mexican government, total $239,000,000, the interest defaulted being about $75,000,000. With other items, and counting alone the debts guaranteed by the credit of the government, these obligations total $603,000,000, and the unpaid interest thereon is over $155,000,000. Unguaranteed state and city bond issues, the $20,000,000 recognized as due the banks for “loans,” and $8,000,000 with which to redeem outstanding fiat currency bring the total up to a principal of $779,120,915. Nearly eight hundred million dollars, and defaulted interest to nearly two hundred million! From time to time, and government after government, treasury officials have come to New York to arrange for the refunding of this debt. The plan is usually for New York bankers to loan Mexico $300,000,000, refund the whole debt, eliminating some items (notably by a reduction of the bond issue of the railroads) and take as security the Mexican government’s pledge of a portion of the customs duties.