Dr. Costa’s Financial Methods.
During his year of office in 1913 as Premier and Finance Minister, Dr. Affonso Costa’s untiring efforts were directed towards abolishing the annual deficit. This may seem to many the very first condition of an improvement in the national finances, and the object was theoretically excellent. But it may be attained by illegitimate means, as unfair taxation or by postponing necessary payments, and in that case the deficit will only be abolished at the expense of a far greater deficit in a few years. It has always been one of the anomalies of Portuguese finance that it is possible to have a full exchequer in a ruined country. To take but one instance, if the crops in Portugal fail a huge additional amount of wheat must be imported, and while the peasant is starving the Exchequer rakes in a surplus in Customs duties. Dr. Costa’s narrow methods—his great bid for popularity and a surplus—really increased the artificial character of Portuguese finance, and its tendency to live from hand to mouth and let the future take care of itself. It was not only that he made of finance a party catchword and a source of class-hatred, adopting Almeida Garrett’s extraordinary maxim that one rich man means hundreds of poor men (Viagens na minha terra: “Cada homen rico, abastado, custa centos de infelizes, de miseraveis”), but that he bent all his ability or energy to the satisfaction of a personal vanity—to be able to set it on record that his year was the year of no deficit and—après lui le déluge. The object should have been rather to encourage wealth in Portugal, even at a temporary loss to the Exchequer, to give landed proprietors every incentive to dwell on and develop their estates rather than to drive them out of the country by a new property tax, by which they sometimes paid, in this and other contributions, over a fourth of their income. This tax (contribuição predial) was successful in immediately raising revenue, but unfortunately the annual expenditure has also increased. Dr. Costa estimated it at 78,000 contos for 1914-15, but in 1909-10 it stood at 74,000. Expenses connected with the War in 1914 and 1915 have added at least another 40,000 contos, so that Portuguese finances will now be hampered for many a year.
GENERAL VIEW, FARO
The Public Debt.
The whole ambition of Portuguese Finance Ministers is to make a huge foreign loan, which has been impossible of late years, but which the altered circumstances may now enable them to achieve. The total of the Public Debt is in round figures, 900,000 contos, the annual interest over 20,000 contos, say twelve shillings per inhabitant. Since the conversion of the external debt in 1892 the interest has been faithfully paid. It is guaranteed by the Customs duties. Whatever improvement future years may bring to the Portuguese finances will not come at a bound (reduction in the deficit in five days of 5,000 contos, a surplus of hundreds, a surplus of thousands, the salvation of the country) but must be very gradual, questions of finance never being questions of the moment only but reacting far into the future. It will be the work of scientific financiers, never of demagogues. He would be a very unreasonable critic, or a very ignorant party politician, who should expect the Republic to transform the financial situation inherited from the Monarchy from a desert into a garden of roses at the mere wave of a magic wand. What is expected of any Government worthy of the name is that it should be a firm and stable Government, that it should maintain order, promote private initiative and wealth, and inspire confidence by giving the country not doses of mystification and paper money, but a straightforward account of the state of its finances.
The Colonies.
The country needs to be enlightened, too, as to the advisability or the reverse of parting with some of her colonies. With an area in Europe of 35,490 square miles, Portugal owns more than 800,000. It is an alarming proportion, although of course that of the empires of Belgium, Holland and Great Britain are even greater. But the Portuguese do not seem to possess the energy and administrative ability needful to leaven the whole lump of their possessions, in spite of the fact that they adapt themselves readily to new conditions and to extremes of climate, and are enterprising in ideas. “As navigators and not as conquerors, wrote Oliveira Martins” (Historia de Portugal), “we unveiled all the secrets of the seas, but our empire in the East was a disaster both for the East and for us.” Many of the higher nobility—all that was best in Portugal—were too proud to engage in trade in the New World. Others went out in order to amass wealth by whatever means in the shortest possible time. The colonies were mercilessly exploited by the mother country. A close system of protection prevented foreign nations from trading with the Portuguese colonies, and the Portuguese themselves did little or nothing for the development of their resources. The unsound administration in Portugal itself became more so in remote Madeira and most so in the distant colonies, where more recently the Governors have been fettered by the strict centralisation of power in Lisbon and driven to despair by the constant changes of Government, which seem to make any continuous policy impossible. As to the condition of the colonies under the Republic a Republican newspaper—O Seculo—has described it as a state of anarchy, “an ocean of disorder” (27th February, 1912). “The Portuguese Parliament has given the natives not justice nor good administration, but—the right to vote, and this in order that it may be possible to say grandiloquently that all Portuguese, white or black, have equal rights in the eyes of the law: To the native of Africa or Timor, totally ignorant of what is a Parliament or politics, to the native from whom we have torn his land, whom we have exploited for centuries, to this native without education or hospitals or schools or roads, to whom we give nothing, for whom we do nothing, and from whom we derive no small profit in the plantations of São Thomé and the mines of the Rand and in so many other ways. Parliament has granted not a better justice or more protection or a good administration adequate to his present state, but the right to vote” (O Seculo, 20th November, 1912). The same newspaper declared in a subsequent article that the sale of any part of the colonies would be a fatal blow to Portuguese nationality, and a public confession of insolvency “so ardently desired by Germany.” The sale of Timor or Macao or Guinea would only be the thin end of the wedge. This is the view commonly held in Portugal. Yet Spain, after having looked askance even at the co-operation of foreign capital in her colonies—as does Portugal now—has learnt to regret bitterly that she did not sell Cuba when she had the opportunity.
Angola.