The Sun.
London, England, 1834-08-16 00:00:00

lie loans contracted, out of the kingdom, by the ancient
Cortes, which are not less sacred than the others, if', however,
this debt is not comprised with all the foreign debts in the
settlement I shall propose hereafter. What I have stated
must be included in the sum of sixty millions rials, advanced at
Paris by Messrs. Rothschild, for the payment of the six
months' dividend on the foreign debt—a sum which will be
reimbursed by a part of the advance of 100 millions of rials,
which Messrs. Arodin and Co. have promised to procure to
the Spanish Government in the course of four months. The
other 14 millions, which the Government has disposed of with
the consent of Messrs. Rothschild, will gradually be reim-
bursed, as has already been partly done. From what has
been stated, it would appear that, exclusive of the ex-
penses of the war, the Treasury would owe 201,813,597
rials for the sums exceeding the receipts brought for-
ward from year to year. This is a deficit which will be
doubled in the course of the present year, if efficient means
are not taken to diminish it. To remedy this evil, it is
necessary to increase the revenues of the Cron, and to
lessen the expenses of collection and of the public service.
The investigation of these means will be the chief topic in
the discussion of the Estimated Budget of 1835, which will,
as I have informed you, follow the present. It will suffice, for
the present, for me to say, that if I have well-founded hopes
of an increase of resources, from the administrative means I
am engaged in carrying into execution, such a result can be
neither so immediate nor so speedy, as our wants require.
When public tranquillity shall be restored, I flatter myself with
the hope, that next year our liabilities will be limited to the
real amount of our ordinary resources. Former Administra-
tions had adopted the system of covering the annual deficits
by loans contracted abroad. In this way, the loans progres-
sively increased, and the interest and the sinking fund of the
foreign debt from 1823 to this day have risen to the sum of
134,526,146 rials, It follows that if justice was done, in like
proportion to the holders of the Cortes' anterior loans, the State
could not bear such an augmentation.. If I could reconcile
it to my own principles, and to the system of publicity we
are entering upon, I should oppose for some time longer
any revelation of the state of the Royal finances ; and,
perhaps, by •concealing it, I should more easily get means
for the current year ; but such disloyal conduct would
deepen the abyss into which the creditors of the State
would for ever fall. Such conduct would not be
useful even to the Government, since it would be exclu-
sively for the loans on their agents, as may be seen from
the results of the foreign recognised loans. The con-
tracts since 1823 have amounted to 2,919,454,666 rials, which
have been reduced by the sinking fund out of the same loans,
to 2,544,406,657 rials. The produce of this enormous debt
has been 739,595,254 rials ; and deducting from this sum the
charges of the commission and the sinking fund of the loans
of 1823, no more than 269,681,313 rials of the sums have been
paid into the treasury. Such is the desolation presented by
an enormous debt contracted at a time of profound peace.
The lesson given us by the past shows us what is proper to be
done for the future, which consists in a strict economy, and a
better system in the administration. With the one or the
other we shall be able to arrive at that balance of the receipts
with the expenditure of the Royal Treasury, without which no
Government can be secure, or enjoy consideration. But as
the advantages of this system cannot be immediately obtained,
and cover the deficit which exists, it is urgent that we should
at least be on a level with our wants, and to foresee the other
deficiencies which may accrue from the war, and the expence
we are already called upon to make in consequence of that
terrible scourge, the cholera. An imperious necessity, in
fine, obliges us to settle all the foreign debt in such a way,
that while we successively pay it, the nation may have
time and facilities, by regaining its strength, to religiously
fulfil its engagements with all its creditors. The conse-
quence of another system would be but to injure and to de-
ceive those who have confidence in our word, and to bring on
a catastrophe which would be the more disastrous, as having
been for a long time preparing. Better times will arrive, and
foreigners will be forced to acknowledge our foresight, our
good faith, and the equity of the Cortes and the Governmen
This measure will be followed by the authorization which

ask for, for creatlng;esources ;—extensive powers, it must be
admitted ; but indispensable, when the deficiency and the cir-
cumstances in which we are placed are considered ;—powers
which will be used but successively, and when the public wants
require it ; and which are such as to show, that the like will
not be again required. In fine, if the means asked for are
great, great also will be the possibility of restoring quickly
peace to this kingdom ; and near will be the day'iwhen the
expenditure may be balanced by the receipts. Under all these
circumstances, I present for the consideration and approval of
theCortes,the following decree, which will meet all that I have
exposed in this report. 1. All debts contracted in foreign
countries by the Government at different periods, and espe-
cially the loans effected either before or after the year 1823,
are a debt of State. 2. The liquidation of all this debt shall
immediately take place, and as the liquidation proceeds,
provision shall be made for the -payment of the interest.
3. All this foreign debt shall be divided henceforth into ac-
tive debt and passive debt. Its conversion into active and pas-
sive debt shall be effected in equal proportions. The accumu-
lated interests of the ancient foreign loans shall be reimbursed
by inscriptions of the passive debt. 4. A new 5 per cent.
stock shall represent the active debt, into which shall be con-
verted that part of the ancient foreign loans comprised in the
active debt. 5. The active debt shall consist in the first place
of the debt bearing interest which the Government may here-
after create ; and, secondly, of that part of the ancient debt
mentioned in article 1, which is to participate in the payments
to be applied to the active debt. 6. The passive debt is corn-
posed of that part of the debt mentioned in article 1, which
shall not have been converted into the active debt. The obli-

gations of the passive debt shall bear no interest, provision
shall be made for their subsequent sinking and reimbursement.
7. All bonds and securities which now represent the foreign
debt, shall be exchanged against new securities within eighteen
months from the promulgation of the present law. The Mi-
nister of Finances shall take the necessary steps for effecting
this conversion, in London, Paris, and Amsterdam. After

the above-named delay, all such bonds and securities of the
foreign debt as may not have been presented for exchange,
shall ipso facto be annulled. 8. A sinking fund of- 4-
per cent. per annum on the • amount of the new stock
shall be provisionally applied. 9. The sinking fund
shall be exclusively applied to the active debt; but when
a certain portion shall have been redeemed, whose
amount shall be hereafter determined, the redeemed
portion Shall be annulled and replaced by an equivalent portion
of the passive debt, thus converted into active debt, and, con-
sequently, participating in the payment of the interests, and in
the sinking fund. 10. No change shall be made in the part
of the foreign debt created to meet the demands of the French
Treasury, and for English claims, which are founded on the
treaties concluded the 30th of December, 1828, and the 28th
of October, 1829, neither shall they be included in any of the
preceding dispositions. 11. The Minister of the Finance is
authorized to contract a loan of 400 millions of effective rials
(100 millions of francs) destined to cover the deficit in the
Treasury, and to meet extraordinary necessities. He shall
contract this loan on the best conditions which may be offered
to him, and which may present the most guarantees. 12. The
Minister of the Finances is hereby authorized to create a Five
per Cent. stock corresponding to the amount of the loan, and
to assign to it a sinking fund, which shall be fixed upon the
bases established by Art. 8. 13. The Minister of the Finances
is charged to make such regulations as the execution of the
present law may require, and to give it extensive publicity."
The cholera at Madrid diminishes. On the 29th ult. there
died 1,100 people, but at present the mortality is only about
200 a-day.