Having placed this island's financial administration on a sound basis, Ramirez was called upon by the Government to perform the same valuable services for Cuba. Unfortunately, his successors here soon destroyed the good effects of his measures by continual variations in the system, and in the commercial tariffs. They attempted to prevent smuggling by increasing the duties, the very means of encouraging contraband trade, and the old mismanagement and malversations in the custom-houses revived. One intendant, often from a mere spirit of innovation, applied to the court for a decree canceling the regulations of his predecessor, so that, from the concurring effects of contraband and mismanagement, commerce suffered, and the country became once more impoverished.
The revenues fell so low and the malversation of public money reached such a height that the captain-general found it necessary in 1825 to charge the military commanders of the respective districts with the prevention of smuggling. He placed supervisors of known intelligence and probity in each custom-house to watch and prevent fraud and peculation. These measures almost doubled the amount of revenue in the following year (1826).
As late as 1810 the imports in Puerto Rico exceeded three times the sum of the produce exported. The difference was made up by the "situados," or remittances in cash from Mexico, which began early in the seventeenth century, when the repeated attacks on the island by French and English privateers forced the Spanish Government to choose between losing the island or fortifying it. The king chose the latter, and made an assignment on the royal treasury of Mexico of nearly half a million pesos per annum. With these subsidies all the fortifications were constructed and the garrison and civil and military employees were paid, till the insurrection in Mexico put a stop to the fall of this pecuniary manna.
It was fortunate for Puerto Rico that it ceased. The people of the island had become so accustomed to look to this supply of money for the purchase of their necessities that they entirely neglected the development of the rich resources in their fertile soil. When a remittance arrived in due time, all was joy and animation; when it was delayed, as was often the case, all was gloom and silence, and recourse was had to "papeletas," a temporary paper currency or promises to pay.
With the cessation of the "situados" the scanty resources of the treasury soon gave out. The funds of the churches were first requisitioned; then the judicial deposits, the property of people who had died in the Peninsula, and other unclaimed funds were attached; next, donations and private loans were solicited, and when all these expedients were exhausted, the final resort of bankrupt communities, paper money, was adopted (1812).
Then Puerto Rico's poverty became extreme. In 1814 there was at least half a million paper money in circulation with a depreciation of 400 per cent. To avoid absolute ruin, the intendant had recourse to the introduction of what were called "macuquinos," or pieces of rudely cut, uncoined silver of inferior alloy, representing approximately the value of the coin that each piece of metal stood for. With these he redeemed in 1816 all the paper money that had been put in circulation; but the emergency money gave rise to agioist speculation and remained the currency long after it had served its purpose. It was not replaced by Spanish national coin till 1857.
The royal decree of 1815, and the improvements in the financial situation, as a result of the new administrative system established by Ramirez, gave a strong impulse to foreign commerce. Though commerce with the mother country remained in a languishing condition, because the so-called "decree of graces" had fixed the import duty on Spanish merchandise at 6 per cent ad valorem, while the valuations which the custom-house officials made exceeded the market prices to such an extent that many articles really paid 8 per cent and some 10, 12, and even 15 per cent.
An estimate of the commerce of this island about the year 1830 divides the total imports and exports which, in that year, amounted to $5,620,786 among the following nations:
Per cent. Per cent.
West Indian Islands imports 53-12 Exports 26
United States imports 27-14 " 49
Spanish imports 12-18 " 7
English imports 2-34 " 6-12
French imports 2-58 " 6-58
Other nations' imports 1-34 " 8-34