Daily globe., 1879-10-05
THE BANK OF SPAIN.
A Curious Kind of Bank-HOw Its Notes ara
PoIo

A Curious Kind of Bank-How Its Notes ara
Redeemed.
London Times, Aug. 16.
There are only two institutions that
may be said to be highly tlourishing
south of the Pyrenees. and these are the
bull-fght and the Bank of Spain. The
latter enjoys the patronage of the govern
ment, which appoints its governor, leav-
ing the election of the directors to the
body of the shareholders. While the
Spanish 3 per cents. are at Is, and pay
for the present only per cent. interest,
the shares of the Bank of Spain, origi-
nally issued at 100, are now quoted at
800, and yield an interest of 25 per cent
The central establishment of the bank is.
of course at Madrid, but it has branches
or succursales in all the provincial cities.
and to great extent monopolizes the
banking business of the peninsula. It
issues notes of different value, from so
to 1000 pesetas or francs and upwards to
al amount four times representing the
bullion which is supposed to con-
stitute it's metallic reserve. These
notes have a forced currency: they are
paid in cash to all government officials
and pensioners, the bank discharging
all the money transactions of the state,
both as paymaster and collector. Ali
these duties, however, lie lightly on the
bank, which in all its operations consults
It's own interest and convenience, with
utter disregard to the claims Of the pub
lie. Spanish bank-notes, in the hand
either of Spanish subject or of foreign
traveller, are to all practical purposes
little better than as many dry leaves A
note issued at Madrid is not payable at
any of the provincial branches, not even
In payment of taxes due the state-the
provincial agennt declaring that his bust
ness is to transmit nothing but gold and
silver to the treasury. In Madrid itself,
up to the year 1874, the bank professed
to "cash its own notes in gold and silver;"
but in that year the wording of notes was
altered the bank only sspromised to
pay,' without saying in what coin-so
that man laying down 10O-tranc note
on the table of the bank receives now in
exchange 50-franc notes. The rule for
cash payments was at all times and is
limited to 10O-franc notes; and, as
the bank IS beset by customers from
morning to evening, and there is only one
clerk at one window, and he has right
to pay in four-real and two-real zone
franc and halfa franc) pieces, the paying
work is distressingly slow. The custom
ers are kept cooling their heels in a long
queue, and, without the most heroic per-
severance and great exertion of elbows,
a man has a chance of leaving the bank
as empty as he came. The consequence
is that, as rule, In Madrid, and abso-
lutely in all other places, man can turn
his notes to no purpose except by paying
a percentage at an exchange office.
In great commercial places like Bar
celona, Bilbao, Seville, and Madrid itself,
Bank of England or Bank of France
notes are accepted eagerly by all private
keepers. 1t is only Spanish bank-notes
that inspire no confidence, and are look
ed upon as wholly unmarketable. In
provincial towns, as at Segovia, or even
at the royal seat at La Grania, traveller,
can only pay his way in gold and silver;
and, If he is away from home for any
length OF time, he must carry with him
huge weight of metal, which would
expose him to considerable danger of
highway robbery had not the Civil
guards, or gendarmes, sufficient corps,
to great extent rid the country of the
brigandage which was once its greatest
scourge.
The Bank Of Spain employs 81 per
cent. of its capital in its transactions
with the government. Only the remain
ing 13 per cent. is supposed to be at the
disposal of It's other customers that is,
of the public, at whose expense the bank
itself lives and thrives. But, in sober
fact. while the government obtains loans
from the bank to any amount at per
cent. interest, private persons apply in
vain tor an advance of cash on any terms.
and even on the best security, unless
they possess strong influence with some
of the directors, or with influential men
connected with the government. Thus.
for any real benefit accruing to trade and
industry, the Bank of Spain may as we'll
be said to have no existence. The Bank
of Spain is, in fact, nothing but great
government jobbing concern. 1t Keeps
the government afoat in its dire emer-
gencies, by ievying percentage on the
public revenue and expenditure; and en-
ploys the money thus obtained either for
the exclusive benefit Of It's own share
holders or for that of the government,
which allows it to break or evade the
rules laid down in its charter with utter
impun1ty.
It is diffiuclt to understand how the
Spanish people can put up with such a.
state of things. The complaint of the
public about this shameful abuse of the
public trust is, indeed, loud and incess-
ant. But the press seems not to have
one word to say on the subject. The
Spanish press is too poor to aspire to in
dependence. There are matters on which
it is easily made worth its while to hold
its tongue, and on which any utterance
might be attended with disastrous conse.
| quences. Attempts are made now and
then to denounce abuses, but these are
followed by warnings which are seldom
disregarded. Freedom of the press in
Spain is an egregious deluslon. A Jour
nal is suspended or suppressed by the
authorities at the home office at their
own discretion, without chance of ap-
peal or redress. And are not these au-
thorlt1es bound to screen from attacks all
their colleagues, and especially the min
lister of finance and his obliging servants,
the governor and directors Of the bank?
Yet, that the Bank of Spain is one of the
very worst "things Of Spain," is thing
that admits of no dispute. A journey Of
few months in the peninsula will give
practical evidence Of the fact to the
most indulgent and least cautious strang-
er.