No. 360.
Mr. Foster
to Mr. Frelinghuysen.
Madrid, July 28, 1884. (Received August 11.)
Sir: I herewith inclose a copy and translation of the law just passed by the Cortes conferring upon the Executive the power to adopt certain dispositions of an economical and mercantile character affecting the islands of Cuba and Porto Rico. It is what is known as the “authorizations,” which the ministry asked of the Cortes to remedy the embarrassed condition of the West Indian provinces, and which were under discussion for two weeks, and after an animated debate were finally passed almost without opposition.
It was conceded on all sides that the situation, especially of Cuba, was critical; that relief in some shape was necessary with as little delay as possible; and the ministry contended that as the Cortes were not willing to remain in session during the heated term sufficiently long to consider and adopt the requisite measures of relief, it would be better to confer upon the Executive full power to concert and carry out these measures during the legislative recess.
The first of the “authorizations” is to make all possible reductions in expenses of the public service. Already the ministry have reduced the budget of expenses $2,000,000 over last year, leaving the total expenses of Cuba $32,000,000. It is contended by many of the senators and deputies from that island that this amount ought to be reduced to $24,000,000 or $26,000,000, but the ministry declare this to be impossible.
The second measure of relief authorized is the transfer to the budget of the Peninsula of the expense of the diplomatic service in America and of the island of Fernando Po, two items heretofore charged to the Cuban treasury, and which have been the occasion of long-continued complaint. It is also contemplated to relieve the West Indian provinces of a considerable part of the mail service now charged to them.
The third authorization is understood to confer upon the ministry the power to make any reductions it may think proper in the tariff of imports and exports or in the other branches of taxation, only being limited to maintaining the obligations of the budget. Sugar is especially mentioned, because it is one of the burdens most complained of; and it is anticipated that the reduction in the import duties would be brought about by means of the commercial treaties contemplated in the seventh authorization. The slight reduction made in the export duty on sugar by the decree of June 5, sent in my No. 232 of the 26th instant, does not satisfy the planters, and an effort will be made to obtain still further reductions.
The fourth authorization is for the purpose of coming to some arrangement with the holders of the Cuban bonds, and other creditors, whereby the debt may be funded at a lower rate of interest. The interest and other annual charges on the Cuban debt were during the last fiscal year $10,186,028, or nearly one third of the entire budget, and a large part of the debt is yet unfunded and no interest is paid thereon.
The fifth relates to the conversion or withdrawal of the paper currency of the Spanish Bank of Havana, which was issued to meet the expenses of the civil war in Cuba, and which was in the nature of a forced loan. It is estimated that there still remains in circulation $41,000,000 of this paper. It bears a heavy discount under gold, and has [Page 497] exerted a most embarrassing influence on all commercial transactions. Coupled with this is the sixth paragraph of the law which authorizes the remission of a portion of indebtedness of tax delinquents and the acceptance of this currency in whole or in part for the remission.
The seventh section of the law authorizes an increase in the Peninsula tariff duties on foreign sugars in the interest of Antillean importation, and to celebrate commercial treaties with other Governments in respect to the trade of Cuba and Porto Rico. The law as originally introduced was unlimited in its application, but an amendment adopted by the Cortes confined the complete authorization as to treaties to the West Indian provinces, but permits the ministry to negotiate treaties a fleeting the Peninsula on condition that they are subject to the ratification of the Cortes. It is understood that this law confers upon the Executive full power to ratify and put the commercial treaties in operation without further legislative action. In the discussion in the Cortes the relations of the Antilles with the United States were frequently referred to, and this section was framed mainly with a view to the execution of a treaty with our Government, although a slight reference was made by the Minister of Ultramar to a possible treaty with Great Britain. It is not believed, however, that it is seriously contemplated to secure a commercial arrangement with any country other than the United States, by which the export trade of Cuba can be improved.
The eighth section relates to the trade between the Peninsula and the Antilles, by which it is contemplated to reduce the tariff on specified articles and to hasten the establishment of coastwise or free trade between the mother country and these provinces; and the ninth has reference to the consumption tax on liquors in Cuba.
Up to this point, the law, as passed, is a substantial adoption of the project submitted to the Cortes by the ministry, but the following sections were added in the Cortes.
The first addition, or tenth section, confers authority to promote the free immigration of laborers to the Antilles. The disorganized condition of labor, especially in Cuba, growing out of the emancipation of the slaves, it is alleged, is one of the chief causes of the present depression of the industries of the island, and it was urged in the Cortes that the best method of remedying this matter was the introduction of free laborers by immigration.
By virtue of the eleventh section, it is contemplated to substitute the tobacco of Cuba for that part which the Government has heretofore obtained from foreign countries for the national monopolies, and by other means to encourage the production and sale of this important article of Cuban growth.
The twelfth section confers upon the ministry full power to reorganize the personnel of the administration of the colonies, establishing a civil service therefor, and making other changes to secure its greater efficiency. Two causes of complaint on this subject have been given great prominence, one being that the service in the Antilles has been reserved exclusively for families of the home Government, and the natives or residents of the islands almost entirely excluded; and the second, that bad administration and corruption, are rather the rule than the exception.
Another great need of the islands is said to be better means of internal communication. To improve this state of things in Cuba, the Minister of Ultramar is authorized to modify the existing conditions for the construction of the Central Railroad.
[Page 498]The last section gives the Executive power to so amend the mortgage law of Cuba as to give greater protection to loans upon estates, and to assimilate that law to the existing legislation of Spain.
The foregoing review will show that almost unlimited power is conferred upon the Executive, and the passage of the law is a striking proof both of the confidence which the Cortes repose in the present ministry and of the conviction that the condition of the Antilles demands important reforms.
I am, &c.,