The morning call., 1893-08-25
HEAVILY BURDENED.

! The debt of Spain is less, actually anC
relatively, than the debt OF France. /
amounts to S1.450,0OO, 900 for a population
Of something less than 100000. But II
! Is In the most unmanagaable shape. For
twenty years there has been an annual de-
felt of several millions. and this has been
carried forward in the form of q floating
debt. This now amounts TO about $50, 000,-
900 pesetas or $4,000. 000 This large sum
is payable on demand but as the Govern
ment has no funds available to pay it the
debt is carried in the shape of acceptanceS
which are fiOated on the exchanges of
Madrid. Paris, Frankfort, London and
Berlin. When money stringency stops
the circulation of these evidences OF deb
the Government falls back on the Bank of
Spain, which issues paper pesetas to re-
iieve the situation. Last month the bank
had 9IS,000.000 paper pesetas afloat and
they were current at a discount of 20 per
cent. They seem to increase at the rate of
about 100000 year. The prospect Of
redeeming the public debt does not seem
bright. No exchange will list new issue
OF Spanish bonds until the defaults Of the
past have been squared, and Of this there
is little chance. The ordinary income of
the monarchy is about Sl6l. 100000 per
year and it seems impossible to increase it.
If 1t could be raised $40, 1000. 600 or S25, 0OO,-
600 1t would meet the annual expenditure,
but the limit of the tax-bearing capacity
of the Spauiards appeals to have been
reached. A dark feature in the situation
is the persistent refusal of each successive
Spanish Government to exhibit its ac-
counts TO the Cortes. No accounts of
revenue or expenditure have been laid
before that body sin ce 1865.
Italy would have been in better financial
shape but for the enormous expenditures
when have been incurred tor the navy and
for ltaly's preparations to fulfill her obli-
cations as 4 member of the Dreibund
ltaly's debt is 1880, 0OO. 900. which Is a
burden on about $4,000 900 people, about
the same liability per head IA in Spain.
But the ordinary revenue OF Italy is over
twice that of Spain, amounting to 1,775,-
100000 lire or $3.50 900, so that the de-
hcitS are small. The trouble with Itaiy as
with Spain is that the people are already
so heavily taxed that they can bear no
more impOsitions. In order TO promote
business and to enable the Italians to pay
their present contributions TO the support
Of Government. the Bank OF Italy and she
other banks have been encouraged to ex-
pand their paper circulation, which now
amounts to 500. 200, 900. sum which would
appear small in the United States. but
which is so large in comparison with tn g
volume of business in Italy that the bank
notes are now at 4 discount as compared
with coin of s per cent and are expected by
inanciers to fall still lower A large pro
portiOn-abOut one-fifth-of the revenue of
Italy is derived from sources which we
should not consider in this country proper
sources of income. such as the income tax
and similar impOsts.
Sooner or later necessity win compel, il
sound policy has not already dictated, a
reduction of expenditures in both coun-
tries so as to bring the national expendi-
ture within a reasonable national income.
But in the meantime both Spain and Italy
are in the position of a merchant who is
really bankrupt, but who floats along wit h
the help of banks who are unaware Of his
condition. Any adverse wind may topple
the undermined fabrics into ruin.