“This debt has its origin in the extraordinary expenses of the civil war (1868-78), and it has since been increased, first by the administrative demoralisation which is so evident to all those who live in Cuba, and which has been so well described in the Cortes by ministers and by representatives belonging to all political parties; and secondly, by the deficits originating in the fiscal laws, the first object, or aim, of which has been (particularly since the year 1882), more than the regulation of public expenses, to secure an excessive protection to the Spanish industries. And, so formed, the public debt, which, as well in the years of insurrection as in the years of peace, has enriched so many people, represents the ruins of the war, the disorders of the public administration, and the injustice of the fiscal laws.”
During the discussion of the Cuban debt by the Peace Commission in Paris last autumn, the Economiste Français contained an article by Paul Leroy Beaulieu, proposing an arrangement or compromise, with the bondholders, of part of the Cuban debt (about $140,000,000). The author of the article admitted that Cuba was not bound to pay the cost of the last insurrection (of 1895-98). As the Economiste Français represents the interests of the French public and of the great French banking houses that have largely invested in Cuban bonds of the issues of 1886 and 1890, the inference to be finally drawn from the above-mentioned article is rather in favour of Cuba. If Spain thus lent her guarantee, she did so in obedience to a necessity and as a business convenience, in order to prop up her colonial and commercial system. The Spanish nation believed that her domination in Cuba would be lasting, and that the remote danger of being called upon to pay the Cuban debt was more than compensated by the enormous amount of wealth which she drew every year from the colony.
If, instead of extorting, yearly, millions of dollars, the Government of Spain had applied the superabundant resources of the Island to the extinction of the debt, it is certain that in 1895 the whole of it would have been paid off. It may unquestionably be asserted that Cuba has, in many ways, from 1878 to 1895, spent enormous sums of money, millions of dollars, in payment of debts not really her own,—but with this difference, namely, that the whole of the money lost to the colony, instead of going to redeem the outstanding Cuban bonds, has been spent in Spain, either in a reproductive way, or otherwise. The amount in Spain of the manufacturing, commercial, and agricultural riches, dwelling-houses, and even palaces, country villas, and other investments, representing Cuban wealth which has been transferred without any return, is incredible. The magnificent fleet of steamers of the Transatlantic Company enters into this category. At the same time, the unhappy Cubans who produced that wealth suffered want and went into bankruptcy; for the Spanish exactions absorbed not only the profits of Cuban industries, but also a part of its gross production, and in that way encroached on the industrial capital of the Island. The encroachment was shown and evinced by the accumulation of public and private debts in all forms. The productive classes of Cuba have always, though in vain, protested against the injustice of having this burden thrown upon the treasury of the Island, which, as is shown above, has been compelled to pay more than $10,500,000 every year for the interest and sinking fund of this unrighteous debt.
The debt which was, so far as Cuba is concerned, wiped out by the American Commission in Paris must have amounted to over $500,000,000. From a variety of rather scrappy data, obtained by the author in Havana, a brief statement of the Cuban debt has been made up. The debts of the Cuban Treasury before the war can be reduced to five.
First: Spain’s debt to the United States.
Second: Redeemable debt of 1 per cent. per annum and 3 per cent. interest.
Third: Annuity debt.
Fourth: Mortgage notes of 1886.
Fifth: Mortgage notes of 1890.
The first debt, $600,000. is an engagement made by Spain and signed in Madrid on the 17th of February, 1834, to pay the United States the amount specified; it was confirmed by the minister of the Spanish Treaty in a royal order, dated April 8, 1841, ordering the payment to be made by the Havana Treasury.