in control, they constitute a check on the spending power of the government and promote promptness of payments. But under normal conditions a responsible government pays even without such guarantees. In time of civil disturbance in Mexico none of the passing governments has apparently felt the agreements to be ones it must obey. At the only time when reliance needed to be placed on the special guarantees they did not serve, and the bondholders find themselves in a position in which it appears the local government does not recognize its responsibility nor can they force it to do so by calling on their home governments to aid in securing the fulfillment of the contracts.
It is true, of course, that the Mexican debt service clauses may at any time be held to mean more than has appeared to be the case. The debts went into default just before the outbreak of the World War, and had peace continued elsewhere during the later period of the revolution it is possible that pressure would have been put upon the government of Mexico to live up to its contracts.
If this is not the case, it appears clear that the form of guarantee found in Mexican loan contracts is of little value whenever a government wishes to disregard it, whether in time of peace or of civil disturbance. If a guarantee cannot be secured, which means that the foreign government shall have a right to see to its enforcement, and if the enforcement by the foreign government cannot be considered reasonably certain, then investors in the securities of unstable countries must consider their money risked in a speculative venture for which they
