Mr. Munro to Mr. Seward.

No. 480.]

Sir: On the 13th instant the president of the council of ministers, Count d’Avila, with all his colleagues, resigned office, owing to the rejection by the council of state of certain ministerial proposals to adjourn the Cortes to November next, when opposition was anticipated to some of the financial measures, it being intended in the interval to assume discretionary or dictatorial powers, and to enforce these measures as laws, and counting on a bill of indemnity from the proposed adjourned session. Although in the voting of some less important measures lately proposed by the cabinet the Cortes showed a majority in favor of government, it would still appear that this majority could not well be counted on for carrying through the more important laws to be submitted to their consideration, and which formed an essential part of the ministerial programme.

His Majesty the King forthwith accepted the proposed resignation, and called upon the Duke de Louié to form a new administration. After three or four days’ consultation with his political friends, the duke found it impossible, under existing circumstances, to make up a cabinet, and resigned the appointment; and up to this moment, although several other eminent men who have before been at the head of the administration have been called upon, no ministry has been organized.

Although the country is enjoying tranquillity, still, as alluded to in some of my previous dispatches, it is feared that great opposition will certainly be brought forward against any laws for increased taxation. Besides a floating debt of about $13,000,000, the public budget for the year 1868–’69 shows a deficit of nearly $7,000,000 on a total amount for expenditure of about $24,000,000.

The financial position of the country is therefore precarious; and although property in this country is not taxed too high and might easily bear a higher rate, still, unfortunatly, the distribution of such taxes is made with a good deal of partiality; the large landed proprietors who, in the provinces, have much local influence at election times, are made to pay little or nothing, whereas the poorer and less influential part of the population bears all the burden, and is sued and distressed for their proportion, whilst they see their powerful neighbors free [Page 96]of vexation or trouble on this head. It is asserted by a respectable local paper, and has not hitherto been officially denied, that the amount of taxes uncalled for by the authorities, and which may be said to represent the allowance for electioneering services, is over $4,000,000.

It would certainly require great moral courage for a cabinet of well-intentioned individuals to face and reorganize such a state of things, and no doubt this has been one of the many difficulties in finding proper parties to form the new cabinet.

The administration under Count d’Avila has not fallen under the opposition of the chambers; to the contrary, they have hitherto had a majority in their favor; consequently the opposition, not sufficiently powerful or important as a party to come forward, cannot be called upon, nor is it possessed of any programme or system, to assume the government of the country. It is hazardous, therefore, to foretell in what manner the country will resolve the problem, and this extraordinary state of suspense is beginning to cause alarm among the well-disposed part of the community.

In the neighboring country, Spain, great agitation seems to prevail; many of the most distinguished generals and eminent statesmen have been quite lately sent out of the country on a very short notice. The Queen of Spain’s sister, the Duchess de Montpensier, with her husband the duke, who have for many years lived unostentatiously near Cadiz, were sent out of the country at a few hours’ notice, and a Spanish frigate of war was placed at their disposal forthwith, and they entered the Tagus on the 17th instant. These distinguished parties, friends and related by family ties to the King of Portugal, continue to live on board the Spanish ship which brought them, as some of the representatives here of foreign powers have tried to represent to the King the difficulty of publicly or officially receiving these princes as such, when they have been banished from their own country. It is certain that, although they come on shore every day in a private manner, they return every evening to their ship; but it is supposed that, notwithstanding the opposition of the parties above alluded to, they will eventually be allowed to land, as Portugal, having always adopted an enlightened and liberal policy towards all foreigners who seek an asylum within its boundaries, without regard to their political creeds, will no doubt in this instance adopt the same measures which have been put in practice towards subjects of the same dynasty. It is not accurately known, here at least, what reasons existed for the prompt and severe measures recently carried out so energetically by the government of Spain; but that the conspiracy, if such existed, was planned on a large scale, and eventually would affect Portugal, is not to be doubted, and I have good reasons to know that the Portuguese government was, in a telegraphic communication from the cabinet of St. James, asked what position they proposed assuming, on view of the politic crisis in the Spanish peninsula; and that Great Britain, as one of the heaviest creditors of Portugal in the way of the large amount of Portuguese bonds and scrip held by Englishmen, and further, as one of its oldest allies, cannot and will not allow Portugal to lose any part of its territory.

Under all these circumstances it is, therefore, all important that the individuals forming the King’s councillors should be men of patriotic feelings, enlightened principles, and firm resolution.

I have the honor to remain, very respectfully, sir, your most obedient servant,

C. A. MUNRO.

Hon. William H. Seward, Secretary of State, Washington, D. C.

[Page 97]