Evening star. [volume] (Washington, D.C.) 1854-1972, 1896-02-24
CUBA IS COSTLY TO SPAIN
Fearful Effect Of the Present Instruction
on Spanish Finances
Her Ministers Resort to Makeshifts
and Manufacturing and Agricul-
tural Interests Are Depressed.
From the London Economist.

quences of this outbreak Of Separation are
beginning to tell in very perceptible way
on the finances Of Cuba and on those Of
Spain herself. After the great insurrection
of 1S6S-7S, a first consolidation Of the
Cuban debt was made in 1886, when H5,-
100000 of g. per cent redeemable bonds
were issued, and the bondholders were
given a lien on the revenue OF the customs
of the colony, in addition to the guarantee
Of the Cuban imperial treasures. Cuban
budgets were drawn up, like the budgets
of Spain, so as to show OH paper either
slight surplus or an insignificant deficit.
Nevertheless, the revenue of the island
always fell short of the expenditures ny
about million sterling. and in the last
year before the present instruction the
customs of Cuba did not produce enough to
cover the interest and amortization of the
G per cent bonds of 1886, and the treasury
OF Cuba had to make good the difference
from other sources.
In 1880 the Spanish cortes authorized tn.
government to convert the Cuban debt OF
1886 and to consolidate all the arrears and
floating debt Of Cuba, including the war
notes of the Banco Espanol de la Havana,
into new per cent Cuban stock, likewise
guaranteed by the customs revenue and by
the treasures of Cuba and Spain. The bill
authorized the creation of f35. 100000 nomi-
nal of this 5 per cent redeemable Cuban
stock, but In reality only seven millions
sterling were issued in 1891 to withdraw
part Of the Cuban floating debt.
The minister for the colonies is said to
have made use of this authorization as
slowly and as prudently as possible under
the circumstances. His operations have re-
duced to fS,5OO,OOO nominal the value of the
Cuban per cent bonds still at his disposal
to cover the expenses of the Cuban war.
By degrees the expenditure has risen in
Cuba to about a million sterling per month,
and it will, of course, be increased when
the Spanish government forwards to the
,~1~ TN1lx.
amounting to $4,000 men, that the new
viceroy has asked for to bring up the army
Of occupation to 10000 Spanish troops.
At the present moment the Cuban treas
of about f4,2OO,OOO. All told. this may suf
fee to cover the expenses of the war until
the month Of May. Fresh advances will
then have to be made by the Bank of
Spain, most probably on the remainder of
the Cuban 5 per cent bonds as it Is now
hardly likely that the government can get
a parliament elected quickly or easily
enough before the spring to vote supplies
for Cuba. Everybody in Spain now under
stands that the whole of the Cuban bonds
of 1880 will have been pledged Or other
without the Cuban war having been
brought to a close, considering that the
new vicerOy himself, Gen. Weyler, the sue
cessor. of Marshal Campos, had publicly
stated before he left Spain that he hoped
to drive the insurgents in few months
from the central provinces of the island,
but did not expect to complete the pacifca-
ton of the colony much under two years.
As soon as these Cuban bonds are all
pledged or sold the government and parlia-
n ent of Spain must Undertake to provide
the money to pay interest and amortiza-
ton on the same until the Cuban treasury
can do SO, even il moneys so advanced are
on paper charged to the colonial treasury
in the accounts of the imperial treasury
and Bank of Spain. 1t stands to reason
that the Cuban treasury, as long the
struggle lasts and even for some time after
Its close, would not attempt to do anything
for these bonds, when it's own revenue has
not sufficed to meet the current expenses
OF its budget and the interest and amOrtiza-
ton of it's older debt of 1885, without in
curing an annual deficit Of one million
sterling in the peaceful and prosperous
times before the present rebellion.
Ministers Devisfng Makeshifta.
The ministers of the regency are now de-
vis:ns makeshift plans for creating extra
ordinary and transitory duties upon all
Spanish and foreign products. The "Banco
Espanor' of Havana will get permission to
issue more notes, 1t did during the last
Instruction. But not much can be expect
ed from such devices in the present state
Of the colony, when all the six provinces
are ovefrun by the rebels, when the work
On the sugar. coffee and tobacco Plantations
has been almost everywhere suspended,
when trade and the customs revenues are
declining, and disaffection has assumed
1t IS astonishing that the Cuban securities,
silly held by the Spaniards themselves.
have borne up SO well during the last
twelve months. The 6 per cent bonds Of
1856 have declined from 10 to o. and then
rallied to 81. and the 5 per cent bonds from
1O1 to SO12 and then rallied to S.. The Gu
ban insttrr ection has also affected the prices
OF Spanish exterior. interior and redeem
able stocks, which dropped in about the
same proportion as the Cuban bonds, Willie
the interior tours have fallen on the Mad
rid bourse from 81 to I3 in a twelvemonth.
The colonial disturbances have also devel-
oped depression in trade, and contributed
to rise In the rates of foreign exchanges
from to % premium in the same period.
Another OF the effects of the Cuban crisis
is seen in the balance Sheets of the Bank
of Spain. The treasury has mad to make so
many appeals to the Bank of Spain fer adj
vances to the Cuban treasury and for sill
yer dollars required by the Cuban and P,1er-
to Rico treasures. that the bank holds at
the present moment two and nale millions
sterling of silver less than year ago, and
the note issue has developed this very week
to the unprecedented figure of f4O 622 $40.
Commerce and Agriculture.
The Cuban insurreetion has begun to af-
feet the Catalan, Biscay and other manu-
featuring districts Of the peninsula, which
have no foreign or interior market outside
Cuba. Puerto Rico, and. in a lesser degree,
the Philippine Islands. Spanish agricul-
tural interests are beginning to suffer from
the falling Off in the customary demand for
breadstuffs for the West Indies, and the
shipping interests, too, are complaining,
though they enjoy privileged trea tnent I'M
der the system of dfferential flag duties
protecting all the carrying trade in Spanish
bottoms. All these varied aspects Of the
unfortunate effects of the Cuban war upon
Spanish finance. commerce and production
in general explain why SO much anxiety
and Impotence prevails in the peninsula
concerning the results Of the sacrifices in
men and money, that ali Spaniards under
stand they could not keep up very long at
the pace of the last ten months.
The Nuisance of Unused Tracks,
To the Editor of The Evening Star:
In leading editorial in today's Philadel-
phia Press is a thought which, to my
mind ought to be considered by the Dis