All the military authority, and the government of the troops in this department, are in the hands of the Captain General of the province. There is not any one under him who has even the title of commandant. But in case of his death or absence, he is succeeded by the general officer, the most ancient in the province. To this title of Captain General is added, commonly, that of President of the Audience, a prerogative which, by uniting in his hands the civil authority to all that of his place, gives a power the most absolute and unlimited.
The inspection general, and all the economy of the affairs of the King in the province, belong to the Intendant. The different branches of the public revenue are all administered by officers appointed by the King, as in the rest of the kingdom, and there are no Farmers-General as in France. Their product is about twentysix millions of reals, or six millions five hundred thousand livres, the expense of collection being deducted. The expenses of the administration, including the maintenance of three regiments of infantry scattered about in different places, do not exceed two millions five hundred thousand livres. The surplus goes into the dry docks, arsenals, and fund of fortifications, to the support of which this sum is far from being sufficient. Such is in general the government, military, political, and civil of this province, and nearly pf all the others, except Biscay, Guipuscoa, and Alaba.
There is not in this province any particular jurisdiction of commerce, but there is a tribunal, under the name of the Judge Considerator of Commerce, which takes cognizance of all their causes, civil and criminal, except the case of contraband. At this day, the Judge Considerator of Strangers is the governor of the province himself, and the appeals from his judgment are carried directly to the Council of War, which is said to be a precious privilege, by the form and brevity of procedure compared with the expensive and insupportable delays of the ordinary jurisdiction.
I cannot but think that if some measures could be taken to convince the Court, that it is their interest to take off the vast duties with which commerce is overloaded in this port, fifteen per cent being to be paid upon all commodities exported and upon all imported, and if the rigid prohibitions of tobacco could be relaxed or repealed, several of the productions of America would find a good market here, and a commerce be opened that would put a new face upon this province, and be profitable to America too. The conveniency of such a number of excellent ports would be a vast advantage, which Bilboa cannot have, as her harbor is neither safe nor convenient, besides its being so much further down the stormy, turbulent Gulf of Biscay; yet Biscay, which is commonly used to comprehend Biscay proper, the principal city of which is Bilboa, although Orduna is the capital; Guipuscoa, the capital of which is St Sebastian, and Alaba, the capital of which is Vittoria, three free provinces, whose laws the Kings of Spain have hitherto been sworn to observe inviolate, have attracted almost the whole of the American trade, because the King has no custom house or officers here, and there are no duties to be paid.
It may seem surprising to hear of free provinces in Spain, but such is the fact, that the high and independent spirit of the people, so essentially different from the other provinces, that a traveller perceives it even in their countenances, their dress, their air, and their ordinary manner of speech, has induced the Spanish nation and her kings to respect the ancient liberties of these people so far, that each monarch at his accession to the throne takes an oath to observe the laws of Biscay. The government here is therefore diametrically opposite to that of Galicia, and the other provinces. The King of Spain has never assumed any higher title than Lord of Biscay. He has no troops of any sort in the lordship, nor is there any standing array, instead of which every man is obliged to serve in the militia. The King has no custom house officers, nor other revenue officers, nor any other officers whatsoever in the lordship except a corregidor, and lately a commissary of marine. This last is considered as an encroachment and a grievance, and the authority of the corregidor is very small, as there lies an appeal from his judgment to another tribunal, that of the two deputy generals, who are biennially elected by the people. Few of the grandees of Spain have any considerable estates here. The Duke of Medina Coeli, and the Duke of Berwick, have some lands here of no great value. The lands, generally, belong to the inhabitants and possessors, who hold them of no lord but the King of Spain, who is Lord of Biscay.
There is a Board of Trade here, which is annually instituted by the merchants of the place, partly by lot and partly by election, which decides all controversies arising in trade, and all the affairs of strangers. They have never admitted any foreign consul to reside here, although it has been solicited by Holland, England, and France.
It is not at all surprising, that a constitution in its nature so favorable to commerce, should have succeeded.
In travelling through the provinces of Leon and Castile, and observing the numerous flocks of sheep, with the most beautiful fleeces of wool in the world, I could not but wish that some communication might be opened, by which the United States of America might be furnished with this necessary article from this country. There are few of our articles of exportation but might be sent to the Spanish market to advantage, rice, pitch, tar, turpentine, tobacco, wheat, flour, ship timber, masts, yards, bowsprits, and salt fish might be supplied to Spain, and at an advantage, and in return, she might furnish us wine, oil, fruits, some silks, some linens, perhaps, and with any quantity of wool, which is now exported to foreign countries for manufacture, and might as well be sent to us, but above all with silver and gold.
It must be the work of time and a free intercourse between the two nations, and a future negotiation to ripen these hints into a plan that may be beneficial to both. The system of revenue, which it is dangerous and difficult to alter in Spain, as well as in all other countries of Europe, will be the principal objection. I have collected together with some difficulty a few gazettes, which I have the honor to transmit to Congress, from which all the news may be collected that I have been able to learn. Congress will easily perceive the eagerness with which the belligerent powers are bent on war, without manifesting the least disposition for peace, and most of all, Great Britain, whose ostentatious display of trifling successes, and whose weak exultation shows, that nothing can divert her from her furious course. But she is exhausting and sinking her forces every day, without gaining any lasting or solid advantage, and she has reason to fear, from the combined fleets of France and Spain, under such enterprising, experienced, and approved officers, as d'Estaing and du Chaffault, the entire ruin of her commerce and navy in the course of a campaign or two more.
I have the honor to be, &c.