LETTERS FROM PARIS, BY 0. P. Q. No XXIV.
TIIE SPANISH FINANCES AND THE APPROACHING BANKRUPTCY.
TO THE EDITOR OF THE SPECTATOR.
Paris, 16th September 1834.
Stn—I am sick, actually sick, of the nauseating nonsense written each day in the Herald, Times, Chronicle, and other English papers, about the Spanish finances, the project of De TOR ENO, and the discussions of the Madrid Com- mission. They have so disgusted me with their eternal reiterations about " honour" and " national faith" and " faith with the public creditor," and " Governments de facto having the right to contract loans simply because they are de facto," that I could with difficulty bring myself to approach this question : and yet we must not suffer the public mind to be kept in error on these matters, nor all the commonplace and satiating jabbering to remain without a reply. Let us then grapple with this question as it should be grap- pled with. Let us tell the truth all round to the Bulls and Bears of London, as to the Coulissiers of Paris, to Roritscinit.n of London, and to AGUA DO of Paris ; to the speculators at the Exchanges of Antwerp, Amster- dam, Brussels, Bolin, and Venice; and above all, let us speak out to the people and the Cortes at Madrid ere it be too late ; and set our faces against all jugglery on ad sides, proclaiming great principles and establishing the rights and the duties of all parties. I cannot hope to effect this in one letter ; but I shall get through the subject as rapidly as I can, ecnsidering the importance of the matter, and the necessity of being correct in our facts and figures, so that the tricksters of the Bourse mayrnot reply to us on unimportant errors, in order to avoid coping with the principles we arc anxious to proclaim. Thirty-seven years ago, France was to a certain extent in the same position as that in which Spain is placed to-day. At that epoch, the various National Assemblies who had succeeded the nee after the other, had made every sort of effort to avert that "hideous bankruptcy" of which Miir,tBE.vu had so great a dread. The Convention itself had given even a sort of constitution to the l'ublic Debt, which exists even in the present times. But in 1797, after the eighteenth Fructidor, the weight had become intolerable. Dividends were only paid by means of new loans, which were injurious to the State creditors, ruinous to the country, and which excited a mad and phrenetic sort of gambling similar to that now existing in the speculations in the Spanish Rentes. It was under these circumstances, and at the approach of a new coalition, that the Directory, in order to meet the difficulties of the time, and to do justice to the country as well as to mere gamblers in National Securities, proposed the reduction of two thirds of the Debt. This measure was adopted. It neither dishonoured France nor ruined France. Her credit is better now than it was during any former period of her history. M. Truants, the present Minister of the Interior in France, has fully justified the proceeding (if it required any justification), in his History of the French Revolution. Take the following extracts front this portion of his luminous and justly popular work.
" The receipts amounted to 616 millions of francs by the various means of taxation then established ; and it became necessary to reduce the expenses to the same sum. The War department, even in the event of a new campaign. was estimated as demand. ing only 283 millions; and the other departments of the public service 247 millions— making a total of 530 millions. Rot for the Debt, the sum of '23.1 millions was requiled ; and if this sum had been paid. the resources of the Republic would not have been equal to its necessary expenses. They proposed, therefore, only to pay one third, i. e. 56 mil- lions. By this means, the various budgets of the public service were paid, arid the s late creditor paid to the amount of one third; the total being 616 millions."
It is unnecessary at the present moment to examine the plan adopted for con- solidating the Debt. I shall refer to this portion of the subject in a future letter. In 1790, when PETION discussed before the National Assembly the question of assignats destined to sreimburse the Public Debt, he expressed himself ha the following manner- " Let us start from certain and fixed points, and which cannot he cow:sled. Ifs owe, and vie have not money. We have property ; but as we cannot divhie our property among our creditors, we must sell our property. But where are the bnyers? They are not to he found. So that to pay. and to purchase. or to sell, are equally inipeaale. What then is to be done ?-10'hy, tee ran do nothinj but—ipue jiver money."
This is the situation of Spain to-day.-:-her precise situation. In consequence of the crimes of her former Governments, encouraged as they were by English and French capitalists and speculators, who lent to those wicked and anti- national Governments money at an exorbitant rate of interest, in order to enable them to oppress the Spanish people—in consequence of the profligate expendi- ture of the public money in profusion, sinecures, and patronage to clergy and monks, encouraged by English and French stockjobbers, who lent their money at enormous rates of interest even to aid these criminal Governments—I say, in consequence of all this, Spain owes, but cannot pay ; and the question arises now, as it did in France, " 'What is to be done?"
And let me begin this subject by reproaching;in no very measured terms, those people in France and in England who have now the audacity to demand of the Spa- nish people twenty shillings in the pound, when they paid even to the criminal Governments who made these loans never more than ten shillings; and who so demand these twenty shillings in the pound, although apprized all the time that these Governments were antnnationah—that the. Spaniards merely submitted till the period of regeneration should arise,—and that they, these usurious ssecu- 'atom lent their money, speculating on the Treaties of Vienna, on the length of time in which Europe might be kept in a state of slavery by virtue of those treaties, and with the pei rest knowledge of the fact before them, that the Spanish nation was resolved at no distant time to chase away the infamous Governments which had so long afflicted and persecuted them. These English I
faith in this rumour, but merely give it as the on dit of the moment. Spanish I and French speculators, who lent their money to put down liberty in Spain, to
Stock has, however, improved io price ; and closes at 52& . The transac- dungeons, and to reexpatriate all Lions in the other descriptions have been quite unimportant. Portuguese Bonds that WAS patriotic and generous from that country, and who so lent their are rather higher ; and a transaction has occurred in the New 6 per Cent. Stock money to pay for the crimes of FERDINAND and his agents, knew quite well that
at 96. all this was opposed to the wishes of the Spanish nation, that all these loans
nations to pay all the debts incurred by Governments, even though those Governments are notoriously anti-national ! It is almost unnecessary on my part to remark, that these observations apply, not to the Cortes Bonds, not to money borrowed by the nation—as that money [mot indubitably was—but ;hat I refer to the loans called " Royal Loans," " Legiti- mate Loans," loans made to oppress and not to deliver—to rivet chains and Ins to unloose them. What should be done, and what justice and reason requite to be done, and even, I will add, what must be done by Constitutional Spain with reference to the Cortes Loans, we will examine hereafter. For the present, I shall merely observe, that SPA IN cannot even pay these loans at present ; that even with reference to them considerable reductions ought to be, and must be made, if Spain is not to be rubbed with impunity; though Spain, on her part, cannot, and will not refuse to pay such sums, and by equitable and such means as are e,itable and convenient as she fairly owes to real banr2,,Ve national creditors. But the situation of all iha other falsely-named " Spanish creditors " is widely different. They lent money to FERDINAND—to the Inquisition—to the priests —to priesteraft—to the monks—to monasteries groaning with wealth and fat- ness : and let them now look, not to Spain, for Spain had made a revolution is order to obtain that freedom and those institutions which these loanmongers had lent money to crush and exterminate. Let these men look to CA LOH A RDE- look to Act; ADO—look to GUERHAIID—look to the priests and monks; and let them learn this lesson, that if they will lend money to such people as FERDI- NAND and his Ministers and agents, they should at least insure their lives to the amount of their loans, out of their enormous gains and'profits. The very prices paid by FERDINAND and his councillors for money, the rate of interest, the terms of the loans, the prices at which they were for Years, all showed to the world at large, and therefore to these French and English, as well as Dutch and Belgian speculators, that the security was thought bad ; that the Government in Spain was looked upon as precarious ; and that the lenders were aware that it was a mere toss up of head or tail whether FERDINAND should or should not be again dethroned, and whether a revofution should or should not again be suc- cessful. These usurers,then, who lent money against liberty and against Spain, have not the right to plead "surprise." They have not been surprised. They were told beforehand, by the fact of a revolution, that Spain desired to he free; and they were well apprized that the Government of FERDINANn had only been reestablished and maintained by French bayonets. Nor was this all . front year to year, and even from month to month, the refugees and the Constitution- alists were constantly making, for many years, either partial or general revolts and insurrections. The events of 182;3 were not acquiesced in by the Spanish nation. This was notorious. And yet the stockjobbers who now claim twenty shillings in the pound in exchange for at most ten shillings by them ad- vanced, continued to lend money to FERDINAND and his agents, knowing them to be anti-national, and knowing that all that was enlightened, honourable, and popular in Spain was opposed to the then existing Government. 1 am aware that I expose myself to be at once assailed by the French jobbers, as having espoused English against French interests; as almost all the Royal Loans are held by Frenchmen, whereas the Cortes Loans or Stock are held by Englishmen. I therefore reply beforehand-1st, 'that I deny the charge of either interest or favouritism ; I do not hold one centime of Cortes Stock : 'f hat England did certai sly aid the cause of liberty in Spain, when France refused to assist it : 3d, That England did, to a certain extent, refuse to aid the cause of 'despotism in Spain, when France sent an army to oppress the Spaniards and destroy a constitutional form of government : and 4th, That if it so happens that there is more Cortes Stock and less Royal Stock in English than in French hands, so much the better for and so much the more to the credit of English than French speculators. But still I have no account before me showing me that Englishmen are not large holders of Royal Stock ; and, on the contrary, I have reasons for knowing that many are large holders. I do not then espouse the cause of English holders of Cortes Bonds because they are English ; but of all holders of Cortes Bonds, because it was a national instead of a dynastic stock : and yet to even these holders I say with Perms, " Spain owes you, and Spain should pay you ; but she cannot do so, and you must wait."
I have been much struck by the impudence of these Royal stockholders, who speak of their interests, and their claims,—just as though the interests of Spain were not far superior to theirs ; and just as though Spain had nothing else to do but to pay money to FERDINAND'S creditors, who had lent dim money to oppress and crush them. The Spanish people demand the reduction of taxes. These Royal stockholders demand their augmentation. The landed proprietors and middling classes demand the suppression of the Ecclesiastical tithes. These Royal stockholders, on the contrary, do nothing but cry " Pay us, pay us!" But Spain cannot pay you, gentlemen ; and will not pay, and ought not to pay you; for Spain owes you nothing. Do not tell us that debts of the Monarchy are transmitted with the crown. The people in Spain gave you notice to the con- trary, when they made their revolution in 1820. As well might the creditorsof Don MIGUEL, oho lent him money in 1832, now claim to be paid by Don PEDRO and the Portuguese nation and Cortes. No; they were cautioned not to lend. They lent, and they lose. This is just. And wile will maintain that the Royal stockholders lent ignorantly ? They did no such thing. The Spanish nation bad warned them. Foreign invasion was no reply whatever to the Spanish revolution. They knew that the ground shook beneath them. They lent 50 per cent, of capital ; and got ten per cent. on 100 per cent. for interest. They did this to stifle liberty and crush the demands for a representa- tive government : and yet now these people cry, " Pay us. pay us !" NO—Y" S11111 OW be paid ; at least not by Spam, or by the people. Look to your Royal creditors, and not to the mass. But Spain CANNOT ea is, even if she would. This I am anxious to show to all ; and I shall do so in my next letter. The national creditors claim the recognition of the old debts of the Monarchy. The foreign creditors are waiting for the payment of loans anterior and posterior to 1823. Bankers, capitalists, and contractors, solicit the sale of the national estates and property of the clergy. All arc clamorous, and all stupid. " Spain owes, but has not money. Spain has property, but there are no buyers. What then is to he done?" PETION would have said, " She can do nothing but issue paper money." We will examine that opinion hereafter. Thank God, the revolution in Spain is progressing. The Journal des DAuts is in an agony. It hoped to have cooked up a nice little comfortable reform in the palace and change in the dynasty, and to have established a Juste Milieu. It finds it cannot do so; and so it screams with horror, "'there is a revolution !" were made not to benefit but to ire the Spanish people, and that the day must and would come when the poniards would again endeavour to obtain reprerntative institutions and a constitutional government. Knowing all this the capitalists and speculators of France and of England lent their money to the absolute Spanish Government of FER DI N A Nn, at cool mous rates of interest, and on moat onerous conditions for Spain ; and yet now hose the insolence t . demand twenty shillings in the pound of both capital and interest; and have the effrontery to talk of good faith, of national honour, and of the duty of I am, Sir, your obedient servant, O. P. Q.