The Finances of Spain.

The most prominent circumstance in the financial condition of Spain is the startling increase of the public debt since the revolution of 1868. The capital of the debt was then 212,443,600l., the interest of which was 5,580,000l. The funds, three per cents, were then at 33. In 1880 the capital of the debt amounted to 515,000,000l. Since 1870, by abuse of credit, the interest of the debt had been paid from the capital; then one-third of the interest was paid in paper, with a promise to pay the remaining two-thirds in coin; this engagement was soon broken, but the paper was punctually paid until 1874, when the interest of the debt was erased from the budget. In face of the evident bankruptcy of the country, an arrangement was made in 1876 between the Government and the principal foreign fund-holders, by which, from January 1, 1877, to June 30, 1881, inclusive, the interest to be paid on the three per cents was reduced to one per cent., and that on the six per cents to two per cent. From June 30, 1881, to June 30, 1882, one and a quarter per cent. will be paid, and arrangements as to future payments are to be made before the last-mentioned date, and a return to a full interest of three and six per cent. is to follow at fixed periods. The success of the scheme is shown by the fact that in 1876 the three per cents, still nominally paying three per cent. interest, were at 11½; in January, 1881, paying only one per cent. interest, they were quoted at 22; and the six per cents, paying only two per cent. interest, were at 42.

From the above statement we may gather some idea of what the civil wars of the republic, the cantonal, Carlist, and Cuban insurrections, joined to the expensive experiments of well-intentioned but inexperienced financiers, in remitting taxes while the public burdens were increasing, have cost the nation. A calm observer, Mr. Phipps, in his official report to the British Government, calculates that from 1868 to 1876 the addition to the debt from these causes amounted to at least 260,000,000l., considerably more than the total debt of Spain in 1868.

Notwithstanding the plausible balance-sheets annually submitted to Congress, the revenue and expenditure of Spain are still far from being in a satisfactory condition. The writer above quoted states that "enormous deficits in the budgets (however nominally balanced) have been the invariable rule in Spain during a long course of years, under every sort of régime and under all circumstances." In the last budget, 1879-80, the revenue is stated at 32,494,552l., and the expenditure at 33,129,484l. Supposing these figures to be correct, the deficit, 634,932l., would be far less than for many years past.

The principal sources of Spanish revenue are, in round numbers:—

Direct Taxes£10,500,000
Indirect ditto5,500,000
Customs4,500,000
Stamps and Government Monopolies9,000,000
National Property1,750,000
Miscellaneous.1,000,000
£32,250,000

Of these the items most foreign to an Englishman's notion of taxation are the produce of the seven great tobacco factories, Seville, Madrid, Santander, Gijon, Corunna, Valencia, and Alicante, of which the net revenue is over 2,500,000l., the lotteries, which bring in 5000,000l. net, the consumo tax, a kind of octroi, and the territorial tax, which together furnish the largest contribution to the revenue. The national property comprises the Almaden quicksilver-mines, valued at over 250,000l. per annum, the Linares mines, leased at 20,000l., and other sources about 30,000l. annually.

The heaviest item in the expenditure is the interest on the national debt, over 11,500,000l.; the ministry of war and the navy exceeds 6,000,000l., while pensions absorb 1,750,000l., public works over 3,000,000l., finance over 5,000,000l., administration of justice more than 2,000,000l.; the ministry of the interior, Cortés, the civil list, &c., make up the remainder.

The total imports and exports of Spain were:—

Imports.Exports.
In 1877,£16,340,672£18,175,140
In 1878,15,910,01617,172,596
In 1879,17,730,75620,155,964