No. 536.
General Sickles to Mr. Fish.
Madrid, October 27, 1873. (Received November 14.)
Sir: Among the noticeable features of the situation the condition of the Spanish finances is a circumstance not to be overlooked. The 3 per cent, consols of the foreign debt are quoted at twenty for a hundred. “Inscriptions in the great book of the consolidated debt,” or interior rent, are sold at sixteen, or less. No interest on these funded obligations has been paid since December last. The coupons which matured in July, of this year, are only worth 43 per cent. Those of December, 1872, are at a discount of 49 per cent.
The last loan put on the market at twenty-eight, shortly before the abdication of Amadeo, was only in part taken up by public subscription. At present any further loans are deemed impossible. A negotiation has been for some time pending in London to raise twenty millions of dollars, at a high rate of interest, on the pledge of various securities, including scrip for a hundred and twenty-five millions of exterior consols, but so far it has not been successful.
A mass of liabilities, constituting what is called the “floating debt,” and amounting to more than a hundred millions of dollars, consists in part of bills payable at fixed dates, secured by the hypothecation of valuables; these bills having matured and gone to protest, the Cortes compelled their removal and forbid the sale of the collaterals which were deposited in the Bank of Spain. This measure has compelled the government to go abroad for money, where special securities maybe available in default of payment.
In truth, the public credit of this country is now lower than that of any other nation. It is nevertheless proposed to assume the payment of some fifty millions of dollars of the notes of the Bank of Havana, issued to the authorities in Cuba and disbursed by them during the past [Page 846] five years, in addition to the enormous revenue raised from the island. You will remember that last year an attempt was made to fund this amount in 8 per cent, bonds issued on account of the Cuban treasury. A small sum was taken in Havana only, and the scheme was abandoned. Much alarm is felt here lest the financial crisis in Cuba, of which this large sum of irredeemable paper is the immediate cause, may yet more seriously hinder the government in its efforts to put down the insurrection. This, perhaps, is the real object of the journey of the colonial minister, who is preceded by a newly-appointed intendant of the treasury, Mr. Cancio Vilaamil, a former incumbent of the oifice, and said to be a competent person.
In order to raise the means for the prosecution of the wars in Spain, and to carry on the government, extraordinary imposts are levied, and the principal contributors in the provinces are compelled to subscribe to a loan reimbursable in taxes; or, in other words, to pay three or four years’ taxes in advance. This measure naturally provokes complaint; yet if it has become impossible to borrow money elsewhere, and Spanish civil wars must be supported by cash drawn annually from the people, a remedy might be sooner found for the chronic disorders that afflict the country.
I am, &c,