cinco de mayo--3/17/2026

17 Mar 2026

cinco de mayo--3/17/2026

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Today's selection--from Mexico by Paul Gillingham. Debt and the Mexican Holiday “Cinco de Mayo”:

“Debt had plagued Mexico since the London stock market collapse of 1826. That disaster, largely the fruit of British financiers' incompetence and dishonesty, left Mexicans paying the bill for decades. The companies founded in the bubble had gone bankrupt, and Mexican: bonds had become worthless overnight, leaving a country without significant tax income owing high interest payments on assets that ha, effectively ceased to exist. The $15 million the US paid Mexico under the 1848 peace treaty went straight to debt service. By the end of the civil war Mexico owed foreigners over 80 million pesos, and a single year's interest payment to the British alone was 2.5 million pesos. Shut out of sovereign credit, Mexican governments turned to extortionate private loans; the flailing conservatives took on an obligation for 15 million pesos from a Swiss financier, Jean-Baptiste Jecker, in return for $750,000 in immediate funds. When Juárez came to power he repudiated the Jecker loan, recognizing the validity of all other debts and Mexico's inability to service them. On July 17, 1861, he suspended all payments, with the assurance that it was a temporary measure.

“It wasn't just British debt; the Spanish and French had made lesser loans, and key members of the French government were involved in the swindle of the Jecker bonds. The French had considered military intervention to collectMexican debt decades earlier. On October 31, 1861, they formed a coalition with the British and Spanish, formalized in a Convention of London, under which the three powers' warships would seize the customs houses of Veracruz and Tampico and divert taxes on Atlantic trade directly to debt service. In the past it would have been a risky move, given the naval power of the United States and the Monroe Doctrine's prohibition of European adventures in the New World. But the US had been at war with itself since April 1861, and in July the government had lost the first pitched battle at Bull Run. The South was trying to establish good relations with the Juarez government; Coahuila and Nuevo Leon even raised the prospect of joining the Confederacy. When Lincoln mooted assuming five years of Mexico's debt service in exchange for European nonintervention, Congress turned him down. It was a propitious moment for muscular informal imperialism; some thought the mere arrival of the warships might restore debt payments.

Battle of Puebla, 5th May 1862, by Francisco P. Miranda

“Yet the Emperor of France, Napoleon Ill, was thinking more in terms of formal imperialism, a ground invasion of Mexico to install a European monarch. His wife, Eugenie, originally a Spanish countess, had been chatting to down-at-heel Mexican monarchists for years; in September 1861, reviewing minor European royals for a suitable candidate, she, Napoleon III, and a conservative Mexican diplomat called José Manuel Hidalgo y Esnaurrízar came up with an underemployed Habsburg. Archduke Maximilian was the younger brother of the current Austrian Emperor Franz Josef and was at a loose end. The plan got a chilly reception from British prime minister Lord Palmerston, a wily realist, and the Convention of London included a clause prohibiting the joint force from interference in Mexico's domestic politics. Seizing the customs houses if necessary was as far as the alliance would go. Napoleon III agreed and then inserted a get-out-of-jail-free card, a further clause that gave field commanders the discretion to respond to fast-moving events as they saw best fit. He then secretly ordered the French admiral to occupy Mexico City whatever happened.

“The fleet arrived in early 1862 with seven thousand troops (Napoleon III, a cheapskate, provided less than half of them), who occupied Veracruz without much fuss. When Juárez agreed to resume debt payments the British and Spanish withdrew; the French installed a puppet conservative émigré as president and advanced on Mexico City. For anyone who had studied past invasions–and the French had, drawing up a map of what the US had faced in 1847–it was clear that invaders had to leave the lowlands quickly, before tropical disease set in, and should expect stiff Mexican resistance. The French found both out in short order. When General Élie Frédéric Forey arrived in the autumn he set out for healthy Orizaba too slowly, leaving behind 200 sick in Veracruz; out of his remaining 515 men less than half survived. And Forey was a new commander in chief, bringing in fresh troops, because the first French regiments had been savaged by guerrillas and lost a set-piece battle at Puebla.

“Puebla was the gateway to the central valley, and the Mexicans garrisoned it scientifically with twelve thousand men. Outside the city they turned two former monasteries into forts; inside the city they dug trenches and built parapets on rooftops. On May 5, 1862, the French, overconfident, launched an all-out frontal assault on the well-organized defenses and were massacred. In the capital Mexicans launched the first-ever Cinco de Mayo celebrations. The French only returned to Puebla a year later, after raising their own army to twenty-eight thousand men. This time they abandoned elan and inched forward behind siegeworks; it took them two months to capture the city, and only after agreeing to let the Mexican rank and file go free. Juárez's government left the capital for San Luis Potosi, and on June 10, 1863, the French finally marched into Mexico City.

“Nine months later Archduke Maximilian accepted the imperial crown, and on June 12, 1864, he arrived in the capital of his Mexican Empire redivivus. He was backed only by Napoleon Ill and King Leopold of Belgium, his father-in-law. Napoleon III was a self-made emperor, a naturalized Swiss citizen, a 'parvenu' to Maximilian, ' princely lumpenproletariat' to Karl Marx. King Leopold was a recent invention too, a princeling who accepted the newly invented crown of Belgium after turning down Greece as a bit too risky. In the royal scheme of things, Maximilian had more legitimacy than either; his family had once ruled Mexico for nearly two hundred years. He nevertheless conditioned acceptance on a vote to confirm everyday Mexicans' agreement, and Napoleon III duly provided the numbers, claiming without any ballot papers that five and a half million Mexicans desired a Habsburg restoration. In reality there was a petition with six names. One gimcrack emperor installed another.

"There were well-placed skeptics to whom Maximilian might have listened. Napoleon III tried to bribe General Miguel Miramón into joining the first expedition; the ex-president refused because, he explained, there was no monarchist party in Mexico. After losing the Battle of Puebla the French commander reported to Paris that he had 'never met a single supporter of monarchy?' The main monarchist emigre, José María Gutiérrez de Estrada, was clueless and utterly marginal in Mexican politics: He had been in exile for more than twenty years, after publishing a pamphlet-partly in English-calling for a foreign prince; he was from Yucatan, he married into a family of Spanish aristocrats, and his neck was saved by the French consul. He wasn't even charismatic; when someone asked Napoleon III what he thought of Gutiérrez de Estrada, the reply was 'Nothing at all.'"