New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1899-05-08
SPANISH FINANCES.

For the last four years the sessions or the
Spanish Cortes have largely been devoted to
discussions of the problems Of war The next
session. which opens ON June 2 will have as its
first task settlement of the vast financial
problem which war has bequeathed TO peace.
And the outlook is that this last will prove one
of the most difficult OF all with which to deal
The various extraordinary credits decreed by
the Government for payment OF debt coupons
and other purposes are merely temporary de-
vices for keeping things going until the Cortes
can meet and receive from the Finance Minis
ter the plan for the reorganization OF Spanish
finances on which he is now diligently working
All the details Of that plan will not be dis
closed Of course, until next month. But OF
some of It's salient features it is possible to
make a tolerably confident forecast
First Of ALL the war debts OF the last four
years including the millions Of arrears still due
to the army and navy, will have to be consoli-
dated and converted. How much these will
amount TO is still a matter Of speculation. The
known total is already described as appalling,
and a member Of the Ministry confesses lively
fear of vet further additions OF great maGni-
tude conservative estimate is $4OO,OOO,OOO,
and one Of fourth as much more Is not deemed
extravagant 1t Is understood that all this in
debtedness will be uniformly funded in redeem
able 8 per cent bonds, with Peninsular guaran-
tees. Next there will be the question or the
form of payment Of interest on the old cuban
bonds and indeed all other obligations. Down
to a year ago it was paid in gold, according 10
agreement But last fall the Madrid Govern
ment arbitrarily announced that thereafter II
would, or could, pay it only In silver thus prac-
tcally scaling 1t down 80 per cent at that time,
and 80 per cent at the present. That was on
only the Cuban bonds at first But little later
the same rule was applied to the whole Exterior
national debt with exceptions only in the cases
Of bondholders who could prove themselves TO
be bona-fide foreigners An offer was made to
the native bondholders to convert their Exterior
bonds into Interiors at per cent, but not more
than one In twenty Of them accepted it. More
than 900 Of the Exterior debt Is still
held by Spaniards on he old basis, with interest
now paid In silver at 80 per cent discount. The
remainder. nearly S22b 100000 is held by for
| eigners. who still get full interest at per cent
| in gold 1t is not easy to see how the Govern
| ment can avoid returning to uniform treatment
| OF Spanish and foreign creditors.
Then there will be the herculean task OF max
| ing the budget balance. There must be reforms
| In taxation and there must be an Increase OF
| revenue The increase is expected 10 come
| largely from direct taxes and from the various
| State monopolies, such as tobacco, petroleum
| alcohol and the Almaden mines. There will be
| an income tax, graded up to as high, they say,
! as 20 per cent There will also be a coupon
tax, and it is an interesting question whether II
will be applied 10 the Exterior ms well as to the
Interior debt At first the thought was TO ex'
cmpt the Exterior debt, but public opinion
against such exemption has risen to stormy
| height and the Finance Minister now declares
that he has not committed himself TO IT, An
other device for helping to make ends meet is q
reduction of the Sinking Fund by spreading the
redemption period of the debt over many more
years than at present. 1t Is also hoped that
some way will be found Of assessing property
more equtably, Spaniards having long been no.
torious "tax-dodgers." But with all these and
other devices 1t is difficult to estimate an In
come Of more than sl60,0O0,000. which is at