No. XXV1L

SPAIN CANNOT PAY EVEN HER REDUCED DEBT. TO THE EDITOR OF THE SPECTATOR.

Paris. Rh October 1834.

SIR—In my last letter, dated 30th September, I showed you that the REvE- NUES of Spain were not equal to meet her expenses, and to pay even t per cent. interest, instead of 5 and 3 per cent. on her Foreign and Home Debts, amounting as they do to 170 millions of pounds sterling, or, at 5 per cent, in- terest, to Bi millions of pounds sterling per annum. Before! proceed to show you that the PROPERTY or CAPITAL of Spain-1 mean of national property and of national capital—are unequal to furnish the sum required for wiping off this enormous debt, I purpose showing you, first, how the Debts of Spain amount -to 170 millions of pounds sterling ; and second, to examine the conduct of some individual Procuradores, of the Commissions, of the Minister of Finance, and of the votes of the Chamber of Procuradores to this day. I must therefore, reluctant though I am so to do, postpone the question of the "capital" or dis- posable "national property" of Spain, to my next letter. 1 had fully in- tended that this should be the last ; but I am so disgusted at learning that there are bankers and capitalists in London to be found, who intend to offer to Spain a new 5 per cent. Loan of four millions of pounds sterling, at 70,— relying, of course, on the British public to supply the money,—that! really feel it incumbent on me to do all I can to prevent at least that public from so acting in ignorance of the facts of this deplorable case.

The SPANISH DEBT, which amounts to 170 millions of pounds sterling, may be divided as follows- 1st. The Debt actually bearing interest, and which is inscribed and ar- ranged; and 2d. The Debt not inscribed nor arranged, and which yet bears interest. But to this might be added, 3d, the arrears of the Public Debt due in 1818, on the Juros, the Canilleja, Temporaledades, Cremios, Emprunt of Aragon, ace. and the interest due thereon ; also the arrears due from 1818 to 1833 on Loans made during the war against NA potEov, on the Debts contracted by the First Restoration, on the capital of sequestrations and confiscations, and on ten years' arrears of the Constitutional Loans.

If these arrears should be added to the floating Debt of the Treasury, under the First Restoration, and before 1808, and to that of the Constitutional Govern- ment and Second Restoration,—I say, if these be added to the four billions of francs of capital due from Spain, as we shall see hereafter,—then the four billions would amount to sevaa,billions, or 280 millions of pounds sterling ; the interest of which at 5 per cents'would be fourteen millions of pounds sterling per annum.

And indeed, if the account were made out as between Spain and. all her real or pretended creditors, either foreign or domestic,—and if every one were paid all that is really or not really due as nominal capital and interest thereon,—It is a fact, that the total capital amounts to very nearly twenty-eight billions of reanx, or seven billions of francs, or 280 millions of pounds sterling. But as doubts might be raised as to this third portion of the Debt, and dis- putes be indulged in, I shall confine my syllabus of the Debts now owing by Spain, or claimed from her, to those items about which there can be no discus- sion, especially on the part of those who maintain with AL DE TORE No, that all the Debts, or pretended Debts, Loans, and arrears of interest, due on all these claims, ought to be paid or liquidated by the new Spanish Government. They indeed are bound to admit debts to the extent of seven billions of francs.

I know that many of your readers wiil feel some surprise at the enormous amount of Spanish Debts or liabilities. They have beard of the FOREIGN Dear, but of nothing else. Why does not DE TORE NO negotiate a loan with Spanish capitalists and Spanish bankers? Because Ds TOREN° is aware, that the Spanish finances are understood in Spain, but not out of Spain. It was one of the tricks of the Spanish and French Restorations, to mystify both the French and English public on the resources of Spain. Their great affair was to capti- vate the confidence of Foreign capitalists. The English and French press, de-. mived by the jugglers of the two monarchies, was alike ignorant of the real debts due by Spain as of its pretended resources. In ignorance, it talked on, and has continued to talk and yet the capital owing by Spain, if once the principle of recognition be adopted, amounts to SEVEN BILLIONS OF FRANCS, OR 280 MIL- LIONS or ectuNias STERLING. Although, to avoid controversy, I consent not to take into account the arrears of interest and floating debts, to which I have re- ferred, and thus reduce the Spanish debt to 41 billions of francs, or 170 millions of pounds sterling; still, if the principle of recognition adopted or pretended to be adopted by M. nr Tortriso were carried into effect, the total of the present actual public Spanish Debt would amount to seven billions of francs, or 280 millions of pounds sterling. As my estimate of the Debt so vastly exceeds that which passes current in England, I shall now supply you with the particulars of this large sum ; merely premising, that in estimating it at 4i billions of francs, as in my last letter, I took the smallest suns, so as to avoid all controversy, and not the larger sum of -seven billions of francs, which I might have taken, and which I am entitled to do, the moment the principle of recognition is proclaimed. In one word—if Spain is to pay all the extravagant and unprincipled debts of all her extravagant and un- principled Governments, and is so to pay them in full (whether that full be "active " or "passive," does not matter to the argument), then is Spain liable to the amount of seven billions of francs for all capital and all interest. I have already said that this principle I do not adopt, and I have already protested against it. But being adopted, then let no juggling be carried on any longer ; but let all the world know all the claims which Spain is liable to recognize and liquidate, the moment the Procuradores proclaim that the acts and debts of former anti-national Governments are not to be attacked, but are to be con- skirted as good and as valid acts and debts by a national and representative Government.

And now for the account, If any details are required by any of your correa

spondent,s relative to the items of this account, I shall always be ready to supply them. In the mean time, remember, first, that the admitted claims ( n Spain amount to 4i millions of francs; and second, that the total claims amount to nearly seven millions of francs.

la. DEBT BEARING INTEREST.

CAPITAL. INTEREST. Francs.. Francs. 1,719,099,165 Debt prior to 18th March 1808 62,724,988 50,000,000 Debts contracted by the First Restoration 2,500,000 .f Constitutional Loans, after des'aicting one- 405,746,879 fifth for the portion exchanged for New 24,000,000 Stock 677,448,666 Loans of the Second Restoration 30,622,777 80,000,000 Claim of France 4,000,000 15,000,000 English Debt, or d'Ofalian Certificates 750,000 10,000,0001 French Indemnities, by virtue of Treaty of} a Pails of 1815 500,000 {Liquidation of the " Junte de Reemplasos ;"

hest deducting the 90 millions comprised in 0,.., ofin AnK 74'021'223 the valuation of the Debt of the First '''''''—'—

Restoration

(Total of capital, and of interest for one year,

3 ,031,315,933 due on the Debts which bear interest, and 148,104,270 which are inscribed and admitted

2d. DEBT NOT INSCRIBED AND SETTLED, BUT BEARING INTEREST. (Amount of Contracts due and not paid, Arrears

825,000,000 of Pay, Indemnities, and General Expenses 24,750,000 of War of Independence

(Amount of Indemnities due for Confiscations

125,000,000 and Spoliations sustained by the Spainards 6,250,000 since 1814 1 Total of capital, and of interest due for one --... 3,981,315,933 year on the Debt insciibed and agreed to, 179,104,270 or not inscribed If, then, the capital of 3,981,315,9:33f.

be added to merely one year's interest 179,104,270f.

4,160,420403E.

we have the sum of nearly 41 billions of francs, about which there can be no question. But besides this, we have 3rd. THE GENERAL ACCOUNT IF ALL SHOULD BE PAID.

1st. Capital of Debt bearing interest Francs 3,981,315,983 2nd. Arrears of Interest on Public Debt 2,537,050,574

3rd. Floating Debt before 1808 123,655,243 4th. Floating Debt of First Resotation 225.000,000

5th. Ditto of Constitutional Government and Second Restoration 125,000,000

••■••■■••INI

Grand Total of the Public Debt Francs 6,992,021,730

I have thus shown, first, that the admitted Debt, and one year's interest only, amount to neatly 4-1 billions of francs ; and second, that the whole claims both Foreign and Domestic, and interest, amount to nearly seven billions of francs. It is now time to turn to the proceedings of the Ministers of CHRISTINA, of the Procuradores, and of the Finance Commission, and to look to the votes which have been comet° by the Chamber. And 1st. I observe, that the project of DE ToRENO, and those of the Cote- tnissioneis, as well as the speech of Tons No, the speeches of CA arta sco the renegade, and of all others at Madrid, keep out of sight all the Interior or Home Debt, and speak exclusively of the Foreign Debt. 2d. That this is a mere trick, to get out of English and French bankers and capitalists all the money they can ; knowing that in Spain not ten realm would be subscribed in the shape of loan or advance by any one hanker or capitalist there. The Foreign Debt is alone spoken of, in order to gull fureigners ; as the Cortes Bonds are recognized, not to be paid, but only to raise the market, and induce other speculators to invest their motley in them.

3d. That the conduct of M. GARCIA CA RRASCO, in first of all recommendiog

the Procuradoes nut to pay either capital or interest of any of the illegal, anti- national, and unconstitutional Loans contracted by FERDINAND—and then aftarwards counselling the House, after the Guebhard Loan had been annulled, to acknowledge in fail all the other Loans—has exposed him to the worst sus- picions, and has ruined his character in the eyes of every friend of Spain 4th. That the annulling of the Guebhard Loan, about which so much fuse has been made—just as if its annulling would save Spain from bankruptcy— is only a deduction of 781 millions of francs capital from the admitted capital of 4i billions of franca; leaving now, after this annulling, 4 1-5 billions of francs due, instead of 4 1-4billions. The deduction is too small to be noticed or felt in such a large total.

5th. That the Chamber of Procuradores, in corning to a resolution to ac- knowledge all the Foreign Loans, and then afterwards annulling one of them, has acted with great injustice and absurdity ; injustice, to those who bought Spanish Stock on the faith of their first decision—absurdity, since the first vote was made without any reserve or exception.

6th. That the Chamber of Procuradores .in recognizing two thirds of the Rente Perpetuelle, both Five and Three per Cents, us Debt " active," and one third as Debt "passive," has acted with bad faith and dishonesty; since it is well aware that Spain CANNOT pay either the two thirds or the one third of what is claimed from her.

7th. That the Chamber has so acted, according to the admissions of De ToreEiso and of GARCIA CAR RASCO in their speeches, with the view of gee. ting more money, and making a new loan at London ; and not with the hope of eventually paying those demands which now, for the sake of obtaining more money, they acknowledge.

8th. That the conduct of M. na TOREN°, of M. Caaaasco, and of the other Members of the majority of time Finance Commission, who went over from the majority to the minority, without any one good reason, has been so disre- putable not to say atrocious, that no confidence can be placed in men who avail themselves of their official position in order toinfluence the prices of the Rentes- who send special couriers to Paris to their relatives, in order to buy and sell Stock upon the faith of what they themselves mean to propose; and that he who shall lend one dollar to be confided to such men in the shape of a new loan, will deserve to suffer the total loss of every farthing he niay invest. My next letter will be devoted to showing, that as the revenues of Spain are inadequate to meet the interest of her Debt ( which I have shown already in my last letter), so likewise the alleged disymable property or capital of Spain is inadequate to meet the capital of her Debt, or of the claims made upon her. By that time also, we shall have the finale of the votes of the Procuradores, and shall know to what we have to trust as to the Foreign Debt—though not ao to the Flame claims, which are so enormous. In the mean time, I am, Sir, your obedient servant, O. P. Q.