The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1898-04-19
Our Liability for Spain's Debts.


Our Liability for Spain's Debts.
A legal question Of much interest has
claimed the attention of many during
consideration of the Cuban interven-
ton problem. It concerns the legal
liability of the intervening power for
the debt which Spain has contracted
with the revenues of Cuba as it's secur-
ity. The amount Of that debt has been
explained by the New York CONNER
cial, as follows:
"The first loan was made in 1886 and
was numinally for $l24,0000O0 at 6 per
cent. There are S11797O,0o0 of the bonds
outstanding. and the interest and sink
ing-fund charges per annum are ST.
S3S, 200 In 1890 a new per cent Cuban
loan, with the usual Spanish guaranty,
was created. noninally to refund the
old per cent loan and pay off the
floating debt, which consisted Of ad-
vances from the Spanish treasury. The
refunding part of the operation was
never completed. and when the present
war on the island broke out, the bonds
thus reserved were, of course, used TO
defray Spain's war expenses. At pres
ent there are about S17l,000,000 Of the
loan Of 1890 outstanding, involving in
tcrcst and sinking fund charges of So
100000 per annum. BotN the loan of
1856 and that of 1890 are payable, prin-
cipal and interest, in gold. The next
Cuban loan was created in 1896, and as
the inSular revenues were exhausted,
the guaranty of the imperial treasury
had to be supplemented by a positive
lien upon the Spanish custom receipts.
This loan is payable not in gold but in
silver pesetas. 1t consists of $3.50, 600
900 of per cent bonds, which have
been issued from time to time during
the past three years, mainly by the
method Of obtaining advances upon
them from the Bank of Spain, which in
stitution. to use colloquial phrase, has
carried the bag through the whole of
Spain's desperate effort to obtain pos
session of it's revolted colony. The
charges upon the loan of 1S96-1S9S,
which was to be redeemed or refunded
in eight years. amount to S2GO00,000
returns from Madrid on the condition
Of the Cuban treasury places its float
ing Indebtedness, consisting in the
main of overdue salaries, pay Of troops,
and other expenses, at some $4,000, 600.
Thus the entire Spanish Cuban debt is
composed of two gold loans, amounting
to $3.50, 900, and carrying annual
charges of $l15OOOOO gold, the silver
loan of SlGO coo 900, with annual charges
of S2G 600. 600 and the floating debt Of
$40 600, COO The total debt is $5l9 O0O,-
O0O, TO which may be added the heavy
expenditures made by the Spanish
treasury since the beginning of the
insurreCtion."
The question is Would the United
states become liable for this immense
debt IT, by Intervening with force in
Cuba it put an end to Spanish revenues
from that island and thus impaired the
security of the holders of these Spanish
bonds? This matter Of the financial
interest Cf these foreign bond holders
in continued Spanish sovereignty in
cuba has a good deal to do with our
governments delay in kicking Spain
out Of Cuba-much more, in our judg-
ment, than it ought to have had. As
between dollar rights and human rights
we are for the latter every time.
Although much has been said by un-
important persons to the effect that II
! we interviewed in cuba without first
/ recognizing an Independent government
| there we could be held for payment OF
| SPANS debt. this contention does not
| appear TO have substantial authority
! back of it. Senator Spooner on Satur-
| day devoted his entire speech 70 this
| point, ana at its conclusion received
| the hearty Endorsement. unofficial Of
| course, of several justices of the SUI
| preme court who had listened to it IN
| the senate gallery. In substance the
! senator's contention was that SPANS
| right to the revenues of Cuba haC
| already been forfeited by the ineffect.
| iveness and inhumanity Of her gov
| ernment. He quoted eminent authori'
ties, among others Woolsey. The lat
ter. discussing the point of a nations
| liabilities, with particular reference tC
the controversy with Spain involving
! the ultimate question of Cubas free
dom, says concerning the liability of {
| new Cuban government for the debts
| Of Spain, based upon the hypotheCatiOT
of Cuba's revenues: Here are Circum
stances when q change of governmen
may dissolve prior obligations. 1t Il
where despotical government ha
contracted debts against a nation at
tempting to recover its liberties. Tn
government is de facto in possession
of authority, and thus its acts are law
ful. Nevertheless, obligations enteret
into to subjugate the people must b
| regarded in this extreme case, as per
tanning 10 the government alone, an
not as resting on the people"
The general point underlying this ar
gument was brought into yet cleare
relief by an illustration employed b
| Senator Hoar; " / do not believe" h
said, that the man who enters
; house TO put out fire becomes legal
responsible for every mortgage on tn
house, and do not believe that a pc
liceman who enters a disorderly hous
to subdue a riot or a fight. even II h
has 10 take the proprietor into custody
becomes liable for every debt which tn
proprietor may have incurred. / do nc
think, If we take Spain into custody
II we put her off the island Of Cubi
r neck and heels. that we are in III
least responsible for any mortgage
? she may have undertaken to put on tn
: island"