The times., 1899-08-09
THE DEBTS OF CUBA.
The Spanish Government Refuses to
Consider Them Settled

Consider Them Settled.
Madrid, July 23-In the preamble of the
proposed law for the reorganization of the
debts OF Spain and of her colonies. which
was laid before Congress by the Finance
Minister, Senor Villaverde, and which was
afterwarG published in the Madrid Ga
zette," the Spanish Government declares
that it does not consider that the question
of the debts of Cuba was finally settled
in the negotiations at Paris last autumn,
nor even by the ominous silence of the
Peace Treaty on the matter 1t will be
best to quote the Finance Minister'S own
official statement as it appears in the
Madrid Gazette:''
The colonial debts entail other problems
When the President of the Spanish Peace Com
mission reported to the Government on Decein-
Der ii, 1898, on the negotiations in the Paris
conference to bring about the transferTal, with
the sovereignty, OF the debts and other engage
ments contracted by the mother country for the
benefit OF and ehsrgeable to the colonies, he
stated that our plenipotentiaries, after having
bausted all arguments, and because OF the
American ultimatllm, agreed that the negotia-
tions for the treaty should continue, without re-
linquishing spain's right to claim that with her
colonies should go also their proper Obligations.
The Spanish Commission also discussed with
great perseverance the validity at least of that
part OF the Cuban debt which had the customs
revenues of that island as its security. The
American Commissioners refused to recc gnize the
validity of this part OF the debt. The Spariardis
ON their side, again and again soiemniy placed on
record that Spain would never consent that any
foreign power should challenge the legitimacy
and validity of the acts Of her home government
and that she would be no party TO anything that
IN tie least endangered the rights of those cred
Itors who had acquired the mortgage on the pro-
eeeds OF the direct and indirect taxes OF Cuba,
and on the proceeds of the customs OF Cuba and
lfafO fant Dft.-s-
t1on OF the transfer OF the colonial obligation re-
manned unsoived in the Paris Conference, and
does not appear solved in the treaty either.
The United States did not show 4 willingness
to take over for themselves for the island of
Cuba the colonial debts. On the other hand,
Spain, too, did not consent directly or indirectly
to the theory that these debts ought not to go
with her colonies, and in presence OF the infiex-
lble attitude OF both Commissions, without any
express convention (agreement), absolutely no
mention OF the said debts made in the
treaty. Consequently, matters continue this
point, as far as Spain is concerned, in the same
status as they were before the negotiations began
in Paris. Spain continues burdened with the di
rect and principal obligations that she contracted
when she created part OF these debts; bat as TO
the mortgage she is in the same /situation as be-
fore the Pence Treaty was made that is to say
bound to recognize and pay the same only when
the mortgage which serves as a guarantee in the
first place for the creditors proves to be insult
ficient.
The Peace Treaty says nothing OF the colonial
debts, but sHis Majesty's Government considers
that the general guarantee OF the nation was
granted tS these debts when they were created
and is attached TO the stock ITSELF which imposes
on the state the duty of including them among
its obligations, which will not prevent our ne
gotiating when the opportunity comes with a
view that these burdens should ultimately be
laid, as justice demands, on the resources Of the
ceded territories, which Spain, in the legitimate
exercise OF her sovereignty, mortgaged for the
payment of the same.
The contention of the Spanish Govern
ment is equally plain in the second article
of the law itself. which has been approved
by the budget committee of Congress and
runs thus: Article 2. The redemption of
the mortgage bonds of the Island of Cuba,
issued in 1886 and 1880, will continue sus.
pended. Reserving ali rights lin Spanish
thus, sin perjuieio) for future negotiations
to obtain the recognition of guarantee re-
endorsement, and successive payment OF
interest and amortization OF the two series
of mortgage bonds of Cuba, chargeable TO
the public revenue of that island mortgaged
for such payment, the State will include
Immediately in schedule of section OF
| the budget of general obligations the legis-
lative credit necessary to pay the interest
of the said bonds minus 20 per cent of the
value Of the coupons presented for payment
to put this colonial debt on the same foot
ing as the debts of the Kingdom.
The Finance Minister, in his speech in
Congress, when he introduced all his finan-
cial schemes, alluded to the Cuban debt as
follows:
Many people hoped, and among them. that
the colonial debts, or at least considerable part
! of them, would have been transferred to the
charge OF the colonies with the guarantee of the
United States and, of course, also, with de-
duction OF interest which such transformation
into frst-class debt implied. On this supposi
| tion well-known calculations made by ex-
perts in Spain and abroad; but all these sur
misses came to grief in the presence OF the result
of the Treaty of Paris and certainly not through
any lack OF efforts, intelligent and firm, on the
part OF our illus1rions negotiators, but because
OF misfortunes.
Nevertheless, the statesman who presided over
| the Spanish Commission has declared in note
worthy document written on the day after the
! Treaty signed, that though it is true that
! the American Commissioners did not admit the
validity Of the mortgage on the Cuban revenues,
| and did not consent that they should pass TO
| the colonies as a responsibility inherent in the
| sovereignty, the Spanish Commissioners on their
| side did not assent to the contrary contention
and the question remained intact Gin Spanish, in
tegra) Thus it must be respected, with the hope
| that by agreements of the sort as those
! for the recognition Of the independence OF other
| Hispano- American nations, there viii be recog-
| nzed in the future the undoubted right to claim
| that the revenues of the Island of Cuba should
| answer as a mortgage for the interest and
amortization of those debts which the Spanish
nation created egitinate5y in the exercise OF its
! sovereignty Nevertheless, the Government does
! not believe that, reserving the exercise of this
| right, there il any ground in the mean while
/ for repudiatfng the Cuban debts The Cuban
| debts like those of the Philippines, had the
| general guarantee of the Spanish nation, and the
| nation cannot do otherwise than honor its sig
nature. These debts must consequently figure in
1 the budget, and they in the budget which
| l have the honor OF presenting
| The Cuban debts which Senior Villaverde
| alludes to are the Cuban per cent re-
! deemable bonds issued in 1886, namely,
| $124, 600, 600; the Cuban per cent bonds
| created in 1890 to the amount of $175 .000,-
| 900. He also alluded to the Philippine s
per cent bonds issued in 1896 for nominal
value of $40, 900. In his statement in
| Congress and in the preamble of his law
| the Finance Minister seems to have ig-
| nored the fact that in the course of the
negotiations at Paris before the Peace
Treaty was signed the American Commits
sioners had very clearly defined what sort
of debts America was disposed to reeog-
/ nize and to get recognized in the ceded
| territories and in the other territories III
| O..