Mr. Cushing to Mr. Fish.
Madrid , June 18, 1874. (Beceived July 7.)
Sir: No material change in the political situation here has occurred since the date of my dispatches Nos. 14 and 16.
Gossip of society and of the newspapers continues to be occupied more or less with suggestions of imputed purposes or tendencies of the government in relation to the question of the re-establishment of monarchy in the person either of Don Alfonso or of some foreign prince; but most of the agitators on this subject give expression rather to their own wishes or hopes than to any definite expectations founded either on acts or ascertained intentions of the government, which seems inclined to continue the present provisional system, (interinadad,) at least until after the achievement of more complete and absolute triumph over the Carlists.
Meanwhile the government continues to administer public affairs in the name of the republic, and with agencies and forms of authority, [Page 889] derived either from the letter of the existing constitution or from its predecessors in the administration of the republic.
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The most oppressive care of the government is to find money for the daily exigencies of the civil and military service. Successive administrations have so tampered empirically with the sources of the public revenue, they have so frequently had recourse to loans at a ruinous discount, they have so completely exhausted all the means of real security for loans, that it is only by the most extraordinary sacrifices that money can be obtained even for the maintenance of the troops in the field. The consolidated debt has fallen to near thirteen per cent. Of course the treasury cannot or will not sell its bonds at this rate, and it raises money by hypothecating them to bankers on loans of ten per cent, of the face and on short terms, which does but stave off the inevitable ruin, and render it the more disastrous when it shall arrive.
It is to be remembered that, in the midst of all her financial troubles, Spain perseveringly and steadfastly adheres to a specie currency. To be sure banks exist, and bank-notes to a relatively small amount are in circulation; but redeeinability in specie is regularly exacted of them. No other paper money or currency exists. At the same time, there is obviously no want of gold, silver, or copper currency, although, perhaps, there is a disproportionate quantity of the latter. And there is ample evidence to show that, in addition to the specie in circulation, a large amount is hoarded by persons who will not trust their savings either to public funds, ordinary banks, or even savings-banks.
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Although the government has not succeeded in placing itself on a satisfactory footing with England, France, Germany, and Russia, yet it seems to have made some advance in that direction by the circular of the 22d ultimo, addressed to the foreign representatives of Spain.
A copy of this document* may have been communicated to you by the Spanish minister at Washington; but in reference to the possibility that it may not have been, a copy is annexed to this dispatch.
I have, &c.,
- See correspondence with the Spanish legation.↩