A Promise of Stability: The Origin of Foreign Debt in Mexico, 1823-1827

Abstract

After years of struggle, the long-awaited freedom and independence from colonialism in which Mexico was immersed were achieved, however, it caused a new problem: debt. The now-independent nation had to eliminate and suppress some of the taxes and instead add a few more, those that were decided to be suppressed were linked to the colonial period during the Bourbon regime, and although this was seen as one of the great steps to be a strong nation through financial reconstruction, it only made the economic problems that Mexico had to face be perceived. The taxes, to tell the truth, helped stabilize the nascent country after the multiple losses that had arisen during the War of Independence, eliminating the main source of income forced the government to initiate a debt of external origin. The beginning of said debt constituted a specific moment in Mexican history where the foundations of the government and the State were weak and shaky; many researchers call this period the “difficult times”. Tenenbaum, on the other hand, calls it “the era of the agiotistas (loan sharks).” This paper seeks to elucidate the reasons why it was decided to initiate the foreign debt, as well as the situation caused by the people who were sent to ask for loans from English firms and who were called “agiotistas.”