The herald., 1898-04-14
THE INVESTOR
CONDUCTED ~ GEO. A DoBINsoN
OFFICE OF THE HERALD,
LOS ANGELES, April 13, 1898.

OFFICE OF THE HERALD,
LOS ANGELES, April 13, 1898.
one may be better than his reputation
or his conduct, but never better than his
principles
The following summary quoted from the
London Economist will give a clear idea
of the nature and extent of Spain's finan-
cial investments In Cuba today:
when Americans and Europeans allude
to a possible settlement of the Cuban ques-
tion by the sale Of the island. or by rec
Ognition OF its independence or autonomy
with an American or even European
financial guarantee for the debt of the COL
ony, more stress is generally laid upon the
political difficulties such settlement
might encounter than upon the quite as i'm
portant economic and financial obstacles
In the way. Naturally, Spaniards are loath
TO discuss any suggestion for parting with
the colony upon which they have lavshed
30 much money and so many precious
lives In two great struggles during this
century. The fnanciers and commercial
glasses In Spain are said to be less irre-
concilable. and SO weary of the heavy sac
rihces already made to retain their hold
upon Cuba. so alarmed at the prospect of
fresh sacrifices in the shape of loans and
taxation. SO anxious about the outlook of
that they would willingly assent to the
Idea of losing Cuba II Spain were rid of the
burden of the Cuban debts that she has
guaranteed.
''The Cuban debt at the present moment
consists OF three classes OF stocks, and OF
. floating debt in addition. The Oldest Gu
ban loan debt dates from 1886 when E24, $780,
no Of per cent redeemable bonds were is
sued with treble guarantee-a lien on the
revenue of the Cuban customs, the guar
Antee of all the revenues of tha island,
and the subsidiary guarantee of the Span
lsh treasury besides. On February l, 1893,
l,119,7 200 bonds of the 1885 issue were still in
circulation, valued ut E23, ,594 900, and re-
uuiring fl,415,640 for their annual interest
and 915200O for the sinking fund. In 1890
the imperial cortes authorized the colonial
minister to create IS 900 900 of Cuban per
cent stock. also redeernable In forty years,
with lien on the customs revenue of
Cuba and the guarantee OF ull the revenues
of the island, together with the subsidiary
guarantee of the Spanish treasury. It
wns intended at the time TO devote &7, ,00O,-
NO of this stock to the consolidation Of the
then existing floating debt OF Cuba, and the
remaining R2S,000 ,0O0 nominal was to be
applied to the conversion OF what remained
Of the per cent bonds OF 1889. The consol-
ldation Of the floating debt was carried out,
but not the conversion Of the 1896 bonds.
Thus 1t came to pass that the &2S 900 900
nominal of the per cent Cuban redeem
able bonds of 1890 were still in the hands
bf the colonial office when the present
tnsurrection broke out In February, 1898.
The cortes authorized the government. In
the session of 1895, to make use of this stock
to raise money for the Cuban war expenses
by selling part of t1le bonds. and by giving
the rest as a guarantee for the advances
made by the Bank OF Spain and Barcelona
bankers. On February l. 1898. 1,717, 100 of
the bonds of the 1890 issue were stil In cir
rulation. valued at 934 .342, 900 and requiring
G1.17,000 for annual interest and f224 900
Tor amortiza ton. Both the interest and the
sinking funds of the 1856 and 1890 loans are
payable in gold Both stocks are chiefly
held by Spanish investors. and a very small
humber of the 1886 issue IL for foreign
hands
1.-The third issue of stock which was made
TO assist the Cuban treasury had to be
boated In Spain, and with lien on the rev.
enue of the Spanish customs over and
above the guarantee OF the imperial treas
ury. Not only the proceeds Of the GUS
toms revenue. but also the proceeds of
lransitory and extraordinary duties on al
rohols. alcoholic drinks, sugars, colonial
products, collected in the customs house.
were used to guarantee G32 600 900 Of per
rent bonds, and redeemable in eight years.
and requiring G5,260 900 for the coupons and
amortization annually.
''The three Cuban loans, therefore,
amount In capital to ESQ 936, ,000 requiring
G3.50S,740 In gold for the coupons and
sinking funds of the 1886 and 1890 issues,
and 95,260 900 In pese.as for the coupons
and sinking fund Of the per cent bonds of
lS96-7-S guaranteed by the revenue OF the
Spanish customs. These three loans. how
over. do not represent the whole amount
Of the liabilities Of the Cuban treasury, as
has been stated In the Madrid ministerial
press that the Cuban treasury was In debt
pm January !, 1898, to the extent of G14.0o0,
NO for several months arrears due to the
army, navy. civil servants. pensioners and
Army contractors Of the colony"