Whether this good lady, whose words I have translated literally from notes made at the time, was right or wrong in her supposition as to the interest of the Jesuits in this tax, and as to the quadrennial increase in the amount paid for it by the syndicate of farmers who exploit it, I cannot say. I quote her words as an instance of what is said on all sides by her class whenever the subject is mentioned, and as far as I can learn she is quite correct in her comparison of the prices of food now with those of forty years or so ago.
Tobacco and sugar are Government monopolies, farmed out to companies, which also are popularly believed to be under the control of the Jesuits. I have never seen any accounts of the profits of the Tobacco Company, but their shares are quoted at about 390 to 400, which speaks for itself. The tobacco they supply is very bad, and outrageously dear. The estimated receipts from this source were pesetas 140,400,000 (£5,616,000).
The sugar trust was created comparatively recently. A short account of the last annual meeting of the shareholders was published by the Press in November, 1909, from which it appears that the trust made a profit in the year, in round figures, of pesetas 8,400,000 on a gross income of pesetas 14,600,000 (say £336,000 on £584,000), and pays a dividend of 8 per cent. And during the past twelve months the price of sugar has been rising, and now stands at about 7d. per lb. Figures like these, relating to a necessary of life which is the one luxury of the poor, do not require comment, especially in view of the fact that enough cane and beetroot sugar for the entire needs of the population could be produced in the country, where both soil and climate are suitable in a great part of the southern provinces. But one company after another has been crushed out of existence, and only ruined factories remain to remind the traveller of what ought to be prosperous undertakings, beneficial to the whole nation. From this source the State gets pesetas 31,600,000 (£1,264,000).
Matches are another monopoly, also farmed out. They are of course bad and very dear—½d. or 1d. for fifty matches, according to quality. The conditions under which the operatives work are, I am told on good authority, simply deplorable, and growing worse instead of better. The estimated receipts are pesetas 10,000,000 (£400,000).
A tax which combines a maximum of irritation with a minimum of profit is one which is levied on the business books of persons engaged in commerce. Every page of the ledger, cash book, press copy book, &c., has to be officially stamped at a charge of so much per page: the total charge for a complete set of commercial books sometimes amounting to 500 pesetas (£20), and not only so, but the Government—presumably in order to get more out of the tax—prescribes the method by which the merchant must keep his books. I was told by the manager of a large foreign industrial concern that he has to employ twice as many clerks as he needs, solely because the authorities insist on a cumbrous and obsolete system of book-keeping.
The law enacts that pious foundations which offer their manufactures for public sale are liable to taxation. It is currently said that this obligation is evaded. Whether this is the case or not I cannot say from personal knowledge, but certainly any visitor can purchase sweets or needlework made in the convents. Indeed, some of them are celebrated for their confectionery, which is always sold a trifle under the cost of similar goods made by a lay tradesman.
If the taxes were fairly and honestly collected, their amount could be materially reduced. But as a matter of fact many are not collected at all from the persons most able to pay. The tax-collector is usually willing, for a consideration, to play the part of the unjust steward, and take less than the proper amount. It is sometimes said that only fools and foreigners pay the taxes, and cases have occurred in my own knowledge where bribery in the proper quarter has effected a substantial reduction in the amount accepted. Every resident in Spain knows of such instances: the thing is notorious, is talked of quite openly, and is done with hardly any attempt at concealment. It is impossible to conjecture what proportion of the total taxes due is thus informally remitted, but it must be something considerable.
Complaints about evasions of taxation frequently appear in the papers: thus it was stated as a fact in the Liberal in February, 1910, that about 45 per cent, of those liable for Contribution industrial evade payment. In the same newspaper, in the same month, appeared a long statement, signed by the officials of the Guild of Cab Proprietors in one of the large towns, accusing certain owners of livery stables, who let smart carriages for hire, of defrauding the municipality of some 50,000 pesetas (about £2,000) a year by falsifying the declarations on which they take out their licences, and no attempt was made to show that the accusation was unfounded. Complaints about evasion of taxation by large landowners also are of frequent occurrence.
Quite recently the Government has seriously taken up this question of falsified returns, especially in the case of real estate, and is making a systematic inspection of the properties liable for taxation. An immense amount of fraud has already been discovered in the towns, and the case of the rural estates is probably worse. I was lately told of an instance where, to my informant’s knowledge, an estate which adjoins his own has been paying 60 pesetas a year, whereas it should have paid about 2,000. In some parts of the country the large landowners are doing their utmost to oppose the carrying on of the Ordnance Survey, because the effect of it would be to define and make public the extent of their property.
An ingenious mode of defrauding the exchequer of succession duties is practised on a gigantic scale. This consists in depositing personal property in the banks in the joint names of all concerned, actual holders and heirs apparent, to the order of any one of them. Thus on the death of the father, the owner of the personal estate, it passes to his son without any legal intervention, and the Treasury is powerless to collect the succession duties. Under the Spanish law as it now stands, if one of the owners of such a joint deposit dies, the deposit pays a proportion of the duties corresponding to the number of names in which it stands: a half if there are two, a third if there are three, and so on. In January, 1910, there were “undefined deposits” (depósitos indistintos) as they are called amounting to nearly 519,700,000 pesetas (about £20,788,000) in the Bank of Spain alone, and Alvarado, Moret’s Minister of Finance, obtained a Royal Decree dealing with these deposits. His plan was simple: merely to make the joint deposit liable for the whole duty on the death of any one of those interested. As this would oblige the owner to pay if the heir died first, it is obvious that the practice of depositing in joint names would at once come to an end. But Cobian, Alvarado’s successor in Canalejas’ Ministry, suspended the decree, a proceeding inexplicable in a Minister whose Chief loudly proclaims his democratic principles. Meanwhile the depositors took immediate advantage of the respite afforded them by the suspension of the decree to transfer some 200,000,000 pesetas (about £8,000,000) to banks abroad, and most probably a good deal more will go the same way. The Religious Orders are fighting the decree tooth and nail, because while legally formed associations, who do not desire to conceal their capital, do not object to the decree, illegal associations, who have reasons for secrecy as to their affairs, find in the system of joint deposits an easy way of escaping their liabilities. It must be remembered that most of the Religious Orders now established in Spain are illegal, the Concordat only allowing of two, together with a third not yet named.