k u 'b, 5 It was very amusing to read in the foreign journals recently, in their advertisements of the Peruvian loan of 86 millions, “that all applicants at Brussels and Paris would not receive a pro rata proportion, as was the custom of the Bourses there (and a very equitable custom), but only an allotment, without any engagement as to amount, as was the custom of the “ Bourse of London.” Now this is not true, except in peculiar circumstances. The last Russian loan was bond fide written for several times over, because it was sold at cost price. Now as I never heard that even all the 15 millions Peruvian were written for, or anything like it, I do not see why each applicant should not have received the full amount he applied for, and even more afterwards, if he wanted it particularly. By referring to the annual budgets of the different countries, the nett amount realised by each loan ought there to appear. What a tale would then be unfolded! ! ! A reference to some of Mr. D. Morier Evans’s excellent works will give the exact prices at which the various loans were issued to the public ; but few know, as I do, the prices paid by the syndicates for the following loans, varying from 5 to 10 per cent, less than issue price in some cases :— Argentine 6 per cent. 1868 and 1871. Danubian 7 per cent. 1864. ,, 8 per cent. 1837. Bolivian 1871. Egyptian 7 per ct. 1862, 1864,1868. Viceroy Mortgage Loan 7 per cent. Khedive „ „ „ French National Defence 6 per cent. Honduras 10 per cent. 1867, 1870. Japan 9 per cent. Peruvian 1870 and 1872. San Domingo 6 per cent. Paraguay 1872f, 8 per cent, Uruguay 1871. Turkish 6 per cent. 1869. „ „ 1871. ,, 9 „ 1872. Spanish 3 per cent. 1869. In a future edition of this pamphlet will be given some extracts from Ponsard’s comedy of “La Bourse,” in which the manoeuvres of cliques and syndicates are admirably depicted. 1 6 SPANISH FINANCES. In the Expos6 just laid before the Cortes, Senor Ruiz Gomez says:— “ It is our desire to carry to all the firm conviction that Spain will faithfully comply with her promises contracted, and so we propose to give a special guarantee to our creditors. To pretend to do this out of our taxes would be an illusion. Fortunately Spain possesses great national property, which is being disposed of, and which can constitute a solid security. The national property (bienes nacionales) still unsold, and the acceptances (pagares) given for those sold which remain disposable after paying all the special debts chargeable to them, amount to 346,000,000 pesetas (£14,416,000). “ We can augment this capital with part of the forests ( hosques ), property of the State, to the amount of 175,000,000 pesetas, according to a project of law which will be submitted to the Cortes. We have, therefore, an amount of property and acceptances or promissory notes of buyers of national property sold, amounting to 521,000,000 pesetas (£21,700,000). “ We do not propose to dispose of the totality of this property. In its representation we propose to issue hypothecary certificates (Billetes hipotecarios) to the extent of 300,000,000 pesetas. The half, or 150,000,000 pesetas, with the 250 millions product of an issue of Consolidated Debt, we destine to cover the Floating Debt of the Treasury. The other half, or 150,000,000 pesetas, wo destine to serve as a guarantee for the cash payment of the interest of the debt. The bienes and pagares (property and acceptances) will be delivered to a mortgage bank (Banco territorial ), and as it may be difficult to realise these documents, we give them representation by means of the hypothecary certificate ( Billete hypotecario). “ In this manner the Exterior and Interior Debt of Spain will have, in addition to the national guarantee and the taxes destined to their payment, a special, solid, and realisable ^hypothecation. 3 7 This hypothecation will he cleared by tenth parts, as each successive six months’ coupon is paid. “The interest of debt, Exterior and Interior, proposed to be submitted to this temporary form of payment, amounts to the sum of 246,000,000 pesetas—one-third payable in paper, 82; two-thirds in cash, 164—246. “ The 164 millions is what we propose to guarantee, for there are other Treasury debts amounting to 62,000,000 pesetas, not submitted to any reduction, a& they are guaranteed by special hypothecations.” After detailing the state of the Floating Debt and general finances as the present Cabinet found them when they entered office, the Minister goes on to say ;— “ Such was the heritage confided to the patriotism of the present Government. The general conditions of the Floating Debt have altered but little as regards amount, On the 22nd of February it amounted to 358,000,000 pesetas, and on the 1st of this month (September) it amounted to 878,000,000 pesetas, (15J millions sterling). It would to-day be 404,000,000 pesetas if we paid all obligations pending. The rate of interest we have, had to pay has diminished greatly, and we have secured this result when the foreign markets had 'felt the effect of the greatest loan known to Europe. We have realised the funds needed to pay the half-yearly interest on the foreign debt. We have effected a great modification in the interest we have had to pay for money. We found loans had been contracted at 22 78-100 per cent, interest , and others 18 per cent. We immediately obtained funds for the payment of the Exterior coupons at 12 per cent. After various renewals, the most important of them being obligatory, the interest of the Treasury Debt is to-day 12 per cent., renewable at the same rate as the former operations mature, “The Government, after explaining the facts, which they do with frankness in all the charges of State, have come to the following conclusions:— “1. Convenience of realising a loan in Consolidated Debt. 8 “ 2. Necessity of adopting a special form for payment of the interest of the debt. “ 8. Means of effecting the loan, and of immediately utilising its advantages. “ It does not seem opportune to resort to credit at a moment when, recognising the impossibility of paying the whole of the coupons in cash, we propose to pay two-thirds in cash and one-third in Consolidated Debt, at the price of 50 per cent., for five years. “ This difficulty is in part overcome, as we have the concurrence of the first banking establishments of Europe. “ To raise the loan, and realise its advantages, we have pro¬ visionally concluded an arrangement with the Bank of Paris and the Netherlands (Banco de Paris y de los Paises-Bajos). Its essential clauses are :— “ The loan, if the Cortes authorise it, will be realised by public subscription opened in all the markets of Europe. The aforesaid Bank will be empowered to open the subscription abroad under the same conditions as the Messrs. Rothschild realised those of last year. The Government reserve to themselves the faculty of opening the subscription in Madrid and Lisbon. “ The issue will be made with the condition of paying for five years two-thirds of the interest in mon^y and one-third in paper. “ The same form will be adopted for the payment of the interest of the whole debt of Spain. “ The nation guarantees the payment of the two-thirds in money by national property, issuing in its representation certificates of value ( valores ) consigned to an Hypothecating Bank (Banco Hipotecario ). “ The Bank of Paris and of the Netherlands, as an advance on the products of this loan, will renew its existing loans to the Treasury, amounting to 60,000,000 pesetas (£2,500,000) at 12 per cent, per annum, and will moreover pay to the Spanish Finance Commissions abroad 20,000,000f. in September and ll,000,000f. in October, at the same rate, with which all our obligations maturing up to those two months will be met without difficulty. ( 9 $ “ We believe it will be a grave error not to utilise at once the benefits of an operation which was, in our judgment, the only thing possible, and the stipulations of these contracts obey this belief. “ Its effect on the Treasury has been highly beneficial for the country. It has reduced interest from 22.78 per cent, and from 18 per cent, down to 12, and assured a powerful and decisive help to the success of the loan destined to cover the Treasury deficits— a loan to be realised in public subscription under the same con¬ ditions as that which, with the applause of the country, was verified last year. It also is subject to the special form of payment for the interests of the debt.” The expenditure for 1872- 73 Senor Gomez puts at 640,000,000 pesetas, or £26,700,000, in round numbers, and the revenue at 545,000,000 pesetas, or £22,700,000, thus showing a deficit of 95,000,000 pesetas, or £4,000,000. Recognising the utter impossibility of making headway with a deficit of this magnitude, added to the already-existing Floating Debt of 404,000,000 pesetas, or £16,800,000, Senor Gomez fell back on his old idea of paying a part of the interest of the Interior and Exterior Debt in paper—say to the extent of one-third. The two-thirds he pledged to pay in cash, and offered a Bank guarantee for it, which he had already provisionally arranged. He adopts strange arguments. “ Our solution consists in temporarily paying in cash two-thirds of the interest of the debt, and giving Consolidateds at the rate of 50 per cent, for the one-third part. When our finance is re-organ¬ ised it will be easy to raise the quotation of our Three per cents, to the rate at which we deliver them in payment of the interest, and then it will be equivalent to paying them is cash. We limit the period of this payment in paper to five years.” The result of this operation will be to reduce temporarily the bud¬ get by 82,000,000 pesetas, limiting the actual expenditure to 558,000,000 pesetas—that is to say, equalising revenue and expendi- l 10 ture within a trifle, which the Minister hopes will be wiped out by increased productiveness of the national taxes. He adds :— What we propose to obtain is merely a temporary indulgence or truce (tregua) for the benefit of our creditors themselves, for it is impossible to detach their interests from those of the nation. In its fortunes and its prosperity they are intimately bound up. It is a truce necessary to reorganise our finance by planting the new taxes we ask of the country, and raising those taxes to their highest sum by means of an intelligent administration. It will prevent our continuing the uninterrupted series of Treasury operations of which the Minister gives a detailed account to the Cortes. The Govern¬ ment are profoundly convinced that the solution they, propose will promptly terminate a deplorable crisis.’ 1 1 append the terms of the Compromise just accepted by the London holders, a contract between the Banque de Paris et de Pays Bas, and the lav/ just passed relative to new Mortgage Bank. “Art, 1. During the five consecutive years, comprehending ten half-yearly coupons, commencing from that maturing Blst of December next, there shall be paid to the holders of the various classes of debt specified in the next Article two-thirds of their interest in money and the other third in paper of Consolidated Exterior or Interior Debt at the rate of 50 per cent. There shall only be given paper of External Debt to the debt of that class. “Art. 2. The classes subject to the foregoing are—-1, Exterior and Interior Debt; 2, 3, 4, 5, 6, purely local or interior debts and State obligations. “ Art. 3. The two-thirds shall be paid in equal halves at the end of their respective six months. The tax of 5 per cent, hitherto levied on all debt but the Exterior shall continue to be levied. “ Art. 4. The delivery of stock for the one-third interest shall be made every six months. “Art. 5. The payment in cash of the two-thirds shall be guaranteed by the receipts of the obligations given in payment of State property 11 sold and by the State property remaining to be sold, after deducting tbe part necessary to liquidate the Treasury deficit. In representa¬ tion of these State properties there shall be deposited in the Mortgage Bank of Spain (Banco Hipotecario de JEspana ), to be created by a special law, a sum of 150,000,000 pesetas in hypothe¬ cary certificates, which shall constitute the said guarantee. “Art. 6. After the five years referred to in Article 1, the debts shall return to be paid in its integrity. “Art 7. Debts emitted by virtue of Treaties with foreign Powers are excepted from the operations of this law. “ Art. 8. The Government shall be authorised to emit certificates of Exterior and Interior Consolidated Debt to an amount sufficient to produce 250,000,000 pesetas (£10,500,000) in cash (effecUvas). The negotiation of these values shall be made by public subscription, at the rate previously fixed by the Minister of Finance, by accord with the Council of Ministers. u The product of this negotiation is destined to clear the Floating Debt of the Treasury. “Art. 9. The interest of the Consol issued by virtue of this authorisation shall be paid two-thirds in cash and one-third in paper for five years, like all the other debt of Spain. “ Art. 10. The Government will report to the Cortes, after the necessary negotiations, whether the national and foreign creditors have agreed to the temporary form for the payment of the interest, as disposed in this law.” No. 2. “ Contract executed between the Spanish Minister of Finance and the Representative in Madrid of the Bank of Paris and of the Netherlands . “Between Don Servando Ruiz Gomez, Finance Minister, in re¬ presentation of the Government of His Majesty the King of Spain, and M. Guido Elbogen, in representation of the Bank of'Paris and of the Netherlands, with due powers to that effect, have agreed upon— 12 “ 1. The presentation to the Cortes of a project of law to realise by public subscription a loan in Interior and Exterior Consolidated Debt sufficient to produce 50,000,000 pesetas (£2,100,000) in cash, two-thirds interest of which is to be paid in money and one-third in Consolidated Debt at 50 per cent., which form of interest payment shall he extended to all the debt of Spain. “2. A renewal of the loans already made by the said bank, and the delivery of further funds in September and October in the Spanish Finance Commissions abroad. “8. The presentation of another project of law guaranteeing the money part of the said payment of two-thirds interest, and the creating for this purpose of a Spanish Mortgage Bank (Banco Hipo- tecario ) according to the accompanying bases, which have been ap¬ proved by the Council of Ministers, and which shall be submitted to the approbation of the Cortes in a corresponding project of law. 4 ‘This agreement shall be ratified by the Bank of Paris and of the Netherlands within five days from this date. “ Madrid, 12th September, 1872. “ Servando Ruiz Gomez. “ Guido Elbogen. “ This contract was duly ratified by the said bank on the 17th of September, 1872. “ Servando Ruiz Gomez. “ Madrid, September 25th, 1872.” No. 3. “Art. 1. The national property (bienes nacionales) still on sale and the pagares (promissory notes or instalment obligations) of the buyers of national property, after deducting those which are already assigned against special debts, shall serve as the guarantee for the cash payment of the two-thirds of the interest on the Exterior and Interior Debt, and also as a means for liquidating the Treasury de¬ ficit, as hereinafter prescribed. “ Art. 2. In representation of this national property the Govern- 13 ment shall issue hypothecary notes {B illites Hipotecarios) of 500 pesetas each (£20), payable to bearer, bearing 6 per cent, annual interest, payable half-yearly, on the 81st of December and the 30th of June, reckoning from the 1st of January, 1873. “Art. 3. The interest and sinking fund of these notes shall be included in the general estimates of the State. “Art. 4. There shall be created in Madrid a mortgage bank {Banco de Credito Territorial) under the title of ‘ the Banco Hi - potecario de Espana .’ The capital shall be 50,000,000 pesetas (£2,100,000), divided into 100,000 shares of 500 pesetas each. The bank may increase its capital to 150,000,000 pesetas. The duration of the company or society shall be ninety-nine years. “Art 5. There shall be conceded to the Bank of Paris and of the Netherlands the privilege of creating the aforesaid Bank of Hypothecation, and its definite constitution shall be effected within three months from the date of the concession. In order to con¬ stitute it there must be at least 25 per cent, of its capital paid up in cash. “Art. 6. The Government will deliver to the aforesaid bank :— 1. The pagares (promissory notes or acceptances) given in payment of national property {bienes nacionales) sold, deducting those assigned to the payment of special debts. 2. An inventory of the national property which may yet be sold according to law. The mines of Kientinto and Almad and the salt mines ( salinas ) of Torrevieja are excepted. As the pagares become due in their various instalments they shall be collected by the bank; and as future sales are made the pagares shall be delivered to it also for collection. The cash proceeds of the pagares and sales shall be exclusively applied to the sinking fund of the- Billites Hipotecarios (hypothecary cer¬ tificates) created by this law. The bank shall receive a commission of 1^ per cent, on the pagares and cash they collect, and 1 per cent, on what they cannot collect {incobrables) , the same as was paid to the Banco de Espana on the original series of hypothecary certificates. The moneys thus collected and received shall be 14 destined on the 81st of December every year to the redemption or amortization of the hypothecary certificates. “Art. 7. The State reserves to itself the right of sale. The bank may exercise investigation, and may ask the sale of any estate (finca) by public auction or tender. “Art. 8. Of the 800,000,000 of pesetas of certificates emitted in representation of the national property as per Article 2, 150,000,000 shall remain on deposit in the bank as a guarantee for the payment of the cash part of the interest of the Exterior and Interior Debt. Each half-yearly coupon paid, counting from the 81st of December next, shall extinguish a tenth part of said guar¬ antee. The other 150,000,000 pesetas shall be negotiated in public subscriptions at a rate previously fixed by the Government, opened by the bank in Madrid and abroad if the Government see fit, subject to a commission of 1^ per cent, on the cash realised. The bank itself may assume one-half of the omission at the rate the Government fix. The successive emissions shall be made by the bank under the same conditions. “Art. 9. The bank, and as representing it, the Bank of Paris and of the Netherlands, shall advance to the Government for three months 100,000,000 f., to be guaranteed out of the products of this negotiation, subject to 10 per cent, annual interest in case it (the bank) shall have been repaid its existing loans to the Spanish Treasury. The loans not repaid shall be considered as a part of this advance. “ Art. 10. Should the pagaves on hand delivered to the bank not be sufficient to cover the emission of the 800,000,000 pesetas in hypothecary certificates, the Government shall deliver the Treasury Bonds on hand, but not issued (en cartera ) to cover the deficiency, which bonds shall be given up as the guarantee is completed in pagares . “ Art. 11. The bank shall be directed by—1. A governor elected by the Government. 2. Three sub-governors nominated by the Government at the instance of the council or board of administra- 15 tion. 3. A council of administration, elected by the shareholders, to consist of not less than nine nor more than eighteen. The governor and deputy-governors must be Spaniards, as also two- thirds of the council of administration. The first board shall be nominated by the founders ; it shall be renewed by the retirement by ballot every year of three councillors, until its complete renovation. After this the retirement shall be by antiquity, and the body of shareholders shall re-elect fresh ones. The retiring councillors are re-eligible. “ Art. 12. The domicile of the bank shall be in Madrid, with power to open branches in the provinces and to appoint represent¬ atives abroad, The bank may use as a stamp and seal the arms of Spain, with the motto, ‘ Banco Hipotecario de Espana “ Art, 13, The operations of the bank shall be :—1, Lending under first mortgage on fixed property, which is inscribed in the Registro de la Propriedad , sums not exceeding half of its appraised value, repayable by instalments. 2. Acquiring credits secured by mortgages already existing, which possess the conditions expressed in the previous article. 3. Lending to the Dipataciones Provinciates and municipalities legally authorised to contract loans, up to the extent of the said authorisation, and even without hypothecation, provided the repayment is secured by a special charge in the esti¬ mates of such corporation. 4. Acquiring credits against provinces or pueblos , provided 4hey possess the conditions of the foregoing article. 5. Making loans to the Treasury. 6. Emitting, by virtue of the foregoing operations, even up to the extent of the sums lent, notes (Cedulas Hipotecarias) , or other obligations redeemable at fixed periods or by periodical sinking fund ( Sorteo ). 7. Negotiate the said notes or obligations, and lend upon them. The capital of the bank shall be preferently destined to the operations already in¬ dicated. “ Art. 14. The bank is also authorised—1. To receive funds on deposit, giving receipts bearing interest. These receipts shall be of not less value than 125 pesetas (51. 4s. 2d.), and they cannot bo > 16 recovered prior to three days after deposit. The wording of these receipts, or Bonos de Caja, shall be submitted to the approbation of the Government. 2. Receive on deposit all kinds of securities in paper and money. 8. Employ the funds acquired by virtue of the two former operations in loans on other securities, and in discount¬ ing bills of exchange. 4. Take charge for account of the State of the collection of the direct taxes and the money operations involved in the service. 5. Take charge of the letting or administration of property or establishments belonging to the State, the provinces, pueblos, corporations, or private individuals. “Art. 15. Finally* the bank may enter into all commercial opera¬ tions which have for their object the promoting of agriculture, or mineral industry, or the construction of edifices, opening credits for the societies authorised by the Government for such objects, or to the corporations or syndicates legally authorised, but always under hypothecation or other guarantee of sure realisation. “Art. 16. The sum total of the bank’s issue in circulation (Cedulas Hipotecarias) shall never exceed the amount of its mortgage loans. “ Art. 17. The bank shall charge annually to its debtors :— 1. For interest, a percentage equal to that it pays on the obligations or notes it emits pertaining to each law. 2. For commission and expenses a sum not exceeding 60-100ths per annum; on petition of the bank, with just cause and approval of the Council of State, the Government may increase this commission. 8. For redemption (anortization) the sums corresponding or arranged according to the number of years in which it has to be verified. “Art. 18. The debtors of the bank may repay what they owe at any time, and in any instalments, but the latter shall always be an exact multiple of 250 pesetas (£10 8s. 4d.) “ Art. 19. The bank shall every year employ the sums it receives from its debtors in redeeming its own obligations. “ Articles 21 to 28 involve mere administrative details. “ Art. 29. The Government, after hearing the Council of State, # 17 shall approve the statutes of the bank, and solve all doubts and questions which may arise in the planting of this law.” The following speeches were made by Mr. Gerstenberg (the Chairman ), Mr. Nathaniel de Rothschild, M.P., and myself, at the recent meeting held at the London Tavern:— The Chairman said that the meeting had been convened at the request of His Excellency the Minister of Finance of Spain. At the last meeting, held in May, a satisfactory arrangement was come to with the Spanish Government as to the External Debt; that arrangement was satisfactory, as it was based upon the principle that when a Government was in financial difficulties, it should not attempt to pay less than it owed, but it ought to receive facilities from its creditors until' it was able to pay in full. The bondholders, at that last meeting, had voluntarily agreed, for a certain time, to lend a portion of its dividend, at a rate of interest which would not involve a loss to the bondholders. The arrangement with which all the bondholders were familiar was entered into, but, before there was time to submit it to the Cortes for ratification, the Spanish Ministry fell, and the Liberal Government came into power, and that Government recognised the right of the bondholders to be paid in full. But when the Minister came to frame his budget he said “ I am anxious to pay in full, but will you tell me how to do it ? ” The Minister found that the Spanish Government owed the sum of ^16,000,000 sterling on the floating debt, and there was a consider¬ able deficit in the budget besides, and he reluctantly asked for a short time. The Chairman then went at some length into the negotiations which had been going on with the view of submitting some new arrangement to the bondholders, and considerable pressure was brought to bear upon the Minister by the Council of Foreign Bondholders to induce the Minister to make some modification in the proposition which he had made, and which was announced in the Finance Minister’s Budget; but the Minister had declined to make any, and had threatened to resign if any modification was made. Tho broad feature of the plan now to be submitted to the 18 bondholders was the payment of two-thirds of the dividends in cash, the remaining third being liquidated in Three per Cent. Stock, issued at 50. These being the best terms that could be obtained, the shareholders were recommended to accept them. The principle was payment in full ultimately. The Minister declared expressly that the External Bonds were absolutely exempt from any contri¬ bution, such as an 18 per cent, income-tax, which was at one time talked about. Another important point was that the present arrangement was not to last longer than the necessities of the Treasury required, and not to exceed five years. Taking all the circumstances—amongst others, the political state of Spain at the present moment—into consideration, he believed the bondholders would do well to accept the present arrangement, and assist the men who were at present in power in Spain. At the same time, it was a question which it was entirely for the shareholders themselves to decide. Mr. Nathaniel de Rochschild, M.P., moved the first resolution, as follows:— “ That though the holders of the External Debt of Spain in public meeting assembled are of opinion that it is preferable to the, credit of Spain to issue the Stock portion accepted in payment of dividend at the actual average market value ; yet, in consideration of the maintenance of the agreement of the 27th May, and the declaration of the Minister of Finance and of the Envoy Extra¬ ordinary on his behalf—first, that’ such agreement or convention remains substantially in force, and is acknowledged as the basis of the arrangement; second, that the External Debt shall bo in distinct terms recognised as exempt from taxation ; and third, that the accommodation afforded shall be continued no longer than [the necessities of the Treasury of Spain require, and not exceeding five years, the bondholders accept the modifications proposed by the Minister of Finance, in his project of law of the 25th September, 1872.” He went on to say- that after the very able speech to which they t 19 had just listened, he would detain the meeting for as short a time as possible. He need not state that the consideration of any arrangement of this kind or nature was particularly averse to his own feelings, and to the feelings of the firm of which fie was a humble member, and who had protested, and would always prbjaest, against a Government making an arrangement of this kind with its creditors. (Cheers.) The interest on the debt ought to be paid in full: but no doubt the gentlemen present would agree with him that although all must protest against such an arrangement, yet the time was gone by for such a course. On the 27th May last, the Spanish bondholders agreed to make an arrangement with the Spanish Government, and agreed to receive a part of their dividend in cash and the remainder in stock. That being the case, they would all be of opinion that the only point now to be considered was whether the arangement, as proposed by the present Minister of Finance and the present Government, was more favourable or less favourable than the arrangement which was accepted by the bond¬ holders in May last, when, after due consideration, they agreed to accept a Five per Cent. Stock with a 1 per cent, sinking-fund. The Government now offered a Three per Cent.—that was 6 per cent, in perpetuity instead of a 5 per cent, annuity—for five years. He thought the Three per Cent. Stock now offered would be more marketable than the Five per Cent. Stock they agreed to take in May. In accepting this proposal the bondholders should look at the political aspect in Spain, and, however averse they might be to the arrangement, they must look at the difficulties which the Minister had had to contend with. If this proposal was refused the Minister would resign, and his financial scheme would fall to the ground. Therefore, however averse the bondholders might be to the present scheme, in the present unfortunate position of Spanish affairs, there was nothing left but to accept it. He was sure that all the gentlemen present, and all the bondholders, must be grateful to the Council of Foreign Bondholders, and also to Mr. Gerstenberg, for the exertions they had made on the present occasion. (Cheers.) > 20 ki Mr. Guedalla said he had no intention, in the remarks and suggestions he was about to offer, to oppose the proposal made to the bondholders by Senor Ruiz Gomez, the Finance Minister, as he had, in the most straightforward and candid manner, pointed out to the Spanish Nation their critical financial position at the present moment, caused by the juggling and legerdemain system pursued by his predecessors Figuerola and Camacho since the commencement of 1869. He dissented in toto from the plan by which it was proposed to be overcome, and was violently opposed to the monopoly about to be conceded to the Banque de Paris et de Pays Bas, an establishment which was the main cause of the downfall of Spanish credit, as he would clearly show. It has been getting 22f per cent, per annum on Treasury Bills of three months, payable in advance. This he had stated at their last meeting, but was discredited. Now he could reiterate it on the authority of Senor Ruiz Gomez. Its minimum had been 18 per cent, hitherto, a scandalous and usurious rate. Many of his friends would have done it at a saving of nearly half. This was the establishment which was to carry out their future financial plans!! ! It now charged the Government 12 per cent. He strongly objected to being paid in paper one-third of his dividends in a 8 per cent, stock, which he was compelled to take at the fancy price of 50, although in reality it would not fetch perhaps half. Twice every year the values would be unduly depre¬ ciated by the sales of needy and small holders (of the new stock created) at the best price obtainable, and a depreciated market would be purposely made every January and July by the buyers. But this was not all. A new creation of Stock 8 per cent, was shortly to be made of nearly 40 millions, or of such a sum as would produce 10 millions of pounds sterling. What hopes of a rise were there under such circumstances. He thought it probable John Bull would at a low price take up a considerable amount of the new loan, such was his voracity for anything foreign. He himself would much have preferred a tax of 15 or even 18 per cent., as being so much simpler than the complications contained in this scheme. He quoted the 21 very words used by Senor Ruiz Gomez when not in power in 1871, wherein the payment of one-third the annual interest in bonds at the average price of the previous six months was recommended. He paid a tribute to the honest and enlightened principles of Senor Ruiz Gomez, and said that wishing to give him a fair trial, he should not withhold his support from the scheme. The proposal was then carried unanimously. I did not make a statement there of the infamous way in which myself and other subscribers to the £82,640,000 loan of 8 per cent, in 1869 were treated by Senor Figuerola, but will briefly recapitulate them here. Immediately on the arrival at Madrid of the much lamented Marshal Prim, in October, 1868, he made important declarations regarding my co-religionists, at my request, which proceeding in¬ volved enormous personal expense and labour. These laws the Cortes afterwards ratified. The particulars, as to myself, will be seen by letters from him, Serrano, and Romero published in the Appendix. I exerted myself in consequence to get subscribers to this loan, and embarked largely in it at 29J, in ignorance, till the mischief was done, of the facts contained in the following two letters, which I published in the Morning Post directly they came to my knowledge, in May 1869, together with a translation by myself from the Spanish of Figuerola’s witty speech, of which the most salient points are given here. “ To the Editor of the Morning Post. “1 think those who subscribed to the loan ought to be informed on what grounds £8,600,000 Internal Stock, part of which ought not to have seen daylight till the end of June and the other half till August, was handed over to certain persons lately at 25, or for £900,000, payable by drafts on London at 80, 60, and 90 days. Mark you this was on the eve of the new loan of £32,640,000 sanc¬ tioned by the Cortes. “ Instead of having recourse to Barings, Rothschilds, Or Gibbs, an establishment called the Bank of Paris launched it, and those 22 behind the curtain tell me the terms were something like the following:— “ One-fourtli the loan they were obliged to take at 28, with one per cent, commission ; but this figure was still further reduced by a stipulated rate of exchange before it reached the Spanish Treasury. This was kindly retailed to the public at 29f by thirty-five indi¬ viduals employed by the Bank of Paris. The commission allowed them was If. “ The second part of the loan, ^610,000,000, is to be lent to the Spanish Government on the guarantee of bonds at the price of 20, and at 10 per cent, interest. “ Third. Twenty millions, also on bonds, with option of taking or giving them up in eight months or a year. My telegram does not mention the price of this last. Such covenants could only emanate from those anxious to destroy Spanish credit for ever. This system of gigantic loans obtained from large houses on deposits (which if not redeemed would be ruin to Spain) is a vile system* and most unfair to her creditors and friends. Not one loan since October will bear inspection. I am pleased to hear it reported that the Bank of Paris, with its thirty-five employes , could not manage to sell more than one-third of their goods—a most remarkable and sig¬ nificant fact, and will lead one to ask what is the use of so many people’s names being employed to move off such an insignificant amount, when any one of them, if sincere, could have done it alone ? —I am, 4c., “ H. GUEDALLA.” “ Sir,—My good friend ‘ A ’ accuses me of being misled by op¬ position Spanish journals, such as the Epocct, &c. I can assure him that I have not seen that journal for three weeks. I gave no rumours. I gave facts, much to my regret, and, until authentically denied, they must remain so. I challenge contradiction to my statements. When I see a patient, previously not at all dangerously ill, brought to death’s door by a quack doctor, I am bound to expose his treatment, as I am sure the constitution is so good that if an 28 Y able practitioner was substituted recovery would soon ensue. I am a severe sufferer, temporarily, by Senor Figuerola’s manipulations ; but as I have not parted, nor do I intend to sell Spanish 8 per Cents., the fall is of no consequence. I did not say the contractors of the loan paid the instalments by bills on London; what I did say was that in April £3,600,000 Internal Stock was sold by certain parties on speculation at about 30. Now, I maintain that this stock ought not to have seen the light till the end of June as regards half, and the middle of August as regards the other half. The Minister of Finance gave orders to the Spanish Financial Agency to deliver these locked-up bonds to these certain parties, and the delivery caused the fall at Paris and Madrid, where the stock on Monday closed at 25. Is not this most unjust to those who subscribed to the last loan ? The cash for these £3,600,000 was paid by bills on London at 30, 60, and 90 days. The whole of the loan has not been contracted. Only one- fourth has been taken ferme, or absolutely , and the thirty-five syn¬ dicate brigands have only succeeded in placing one-third of the loan, notwithtanding their commission of If per cent., in addition to having sold bears at 30, when they heard they were to be em¬ ployed.—I am, &c., “ H. GrUEDELLA.” “May 12, 1869. All Senor Figuerola’s loans have been “gigantic blunders.” Look at the pledging of the Morocco tribute of £1,440,000 to a house who received £640,000 bonds as collateral security at 25. Extracts from Senor Figuerola’s witty speech . “ The Minister of Finance, Figuerola, said—Since entering the Congress I have seen the pamphlet alluded to for the first time. It is written by a Senor Macia Costello, who came to offer a loan to the Government before it had been authorised by the Cortes. I recollected the position in which Senor Alonzo Martinez found him self on entering the Ministry, through having believed in the res¬ pectability of certain English houses . When, therefore, Mr. Costello 24 offered me a loan, but would not leave with me a note of the Eng¬ lish houses of which he had spoken, I began to entertain certain suspicions as, to his position. He afterwards returned, and presen¬ ted in a kind of wcishenvoman style some proposals without signa¬ ture. These were so incomprehensible that neither myself nor Senor Kodiguez, the then sub-secretary, could understand them. I should mention that Senor Costello is a bankrupt wine merchant of Puerto de Santa Maria. I do not wish to remark on his bank¬ ruptcy, but I ask the deputies would they have treated with a bank¬ rupt ? I made inquiries in London relative to the houses of which he had spoken , and I do not receive very favourable answers con¬ cerning his associates or partners. I also afterwards find that they required, as a basis of the loan, the recognition of certain cer¬ tificates of coupons —not the old certificates, but new ones. That is to say, he had the daring to propose the creation of a new series of troubles with new certificates of coupons . Such is Senor Cos¬ tello, who has published this pamphlet giving an account of a loan of which he knows nothing. The terms of that gentleman were 15 per cent!! He made two proposals without material difference, ex¬ cepting in the one there was a commission of f per cent, as a tempting apple for the benefit of the Minister of Finance. On his being told that there were more advantageous proposals, that gen¬ tleman and his friends offered to negotiate it at i per cent lower than the terms tendered by any other parties . I ask the deputies to judge whether that was a formal proposal, or only the means of seeking a bonus. Mr. Costello makes comparisons which he has no right to make, and it must also be borne in mind that his pro¬ posals were not for giving cash at once, but only for placing the loan and taking a commission of 4J per cent. This commis¬ sion he had to get from the subscribers, when he obtained them, by way of profit, and perhaps something additional for those societies and agencies of doubtful character which exist in England and Germany.” 25 The following excellent article appeared in the “Economist,” relative to the recent compromise with the Spanish bondholders . THE COMPROMISE WITH THE SPANISH BONDHOLDERS. “ At their meeting on Monday, the English bondholders of the Spanish Government agreed to an ‘ arrangement ’ proposed by their debtor, which, in several respects, is so remarkable as to deserve some notice. It is to this effect—that for a period of five years the Spanish Government is to pay only two-thirds of the interest due in cash, and the remaining third in certificates of the 3 per cent, debt, to be issued at the price of 50, the expectation being that at the end of five years the Spanish Government will be able to resume payment in full. The arrangement is obviously a clear sacrifice of the creditors’ rights. A third of their interest is to be paid them in certificates of a debt whose market price is 30 but which they are to take at 50, so that they will have to submit to a clear loss of 40 per cent, on this third, or about 13 per cent, on their whole interest. The arrangement is thus one by which the Spanish Government lays a tax of 13 per cent, per annum on the income of the holders of its debt—as distinct and flagrant an act of repudiation as could well be committed. To put the matter another way, the Spanish Government proposes to raise from its creditors for the next five years an annual loan, to the amount of one-third of the interest due to them—that is, £3,280,000 a year, or altogether nearly £17,000,000—and by issuing a 3 per cent, stock at 50, will raise the money at 6 per cent., whereas in the open market it must pay 9 per cent, or more. What the creditors sacrifice is of course gained by the Spanish Government, and the permanent gain will be in the end £500,000 per annum, that being the difference between a 6 and a 9 per cent, rate of interest on the forced loans of £17,000,000, which it proposes to levy on its creditors during the next five years. 26 ; “We certainly think this a singular 4 arrangement,’ and for the Spanish Government and people most disgraceful. It is bankruptcy made easy for any Government which chooses to commit it. The Government gets all the credit of keeping good faith with its creditors, for the creditors are parties to the settlement, and yet it gets all the pecuniary advantage of not paying a substantial part of what it owes. We cannot conceive a foreign Government after this being so foolish as to tax its creditors, when it can get all the advantages of that course without the discredit of repudiation which would follow it. Still, the result is the same as open re¬ pudiation, and as one bondholder has no right to hind another, the offence is really committed as regards a large number, possibly the large majority, of those interested. The real excuse of the Spanish Government no doubt is that the bankruptcy is inevitable, as the last budget too clearly showed. With a floating debt of £16,000,000, on which 20 per cent, interest is running, with an accumulating budget deficit of £4,000,000 a-year, which is sure to be larger in the account , and with an entire debt already absorbing more than half the revenue in interest, the Spanish Government could plainly keep up no longer the old game of borrowing new money to pay the interest on the old loans. An act of bankruptcy had to he faced, and, in a certain sense, the Spanish Finance Minister has perhaps been very clever in getting over the difficulty. The real interest of the Government and people, however, would have commanded a very different course. There is no want of means in Spain to pay the money. A population of 16,000,000, possessing one of the richest countries of Europe, ought to he good for far more than £25,000,000 of taxes, which is all that is required for solvency. France, with little more than double the population, raises four times the revenue; and though France is richer in proportion to Spain, its natural wealth is not in proportion greater, and we doubt if its acquired wealth is in proportion double that of Spain. As Spain is thus rich enough to bear the taxation, the only honest course in a temporary difficulty is plainly to issue deferred obligations of some sort, which would be saleable at a market price that would give the creditors a full equivalent in money. By acting differently, the Spanish Government and people take advantage of their own internal difficulties to defraud the creditor, and though meetings of bondholders consent, the evil is not thereby cured. The disgrace of asking for the consent, and of using various arts to extort it, remains; and, as we have explained, there are, after all, a large multitude who never do consent, so that in many cases the bank¬ ruptcy is really complete. “ How comes it then that the bondholders at their meeting have consented? Why was it thought proper to whitewash the Spanish Government, which at the worst could only have done what it is still going to do—keep back a part of what is due to them ? The resolution proposed at the meeting certainly contains no sufficient explanation of the bondholders’ action. It assigns three reasons— 1. That an agreement made on the 27th of May was declared by the Spanish Envoy to be substantially binding, and to be the basis of the arrangement; 2. That the external debt is to be reoognised by the Spanish Government as exempt from taxation; and 3. That the arrangement is to continue “no longer than the necessities of the Treasury of Spain require, and not exceeding five years;” but these three reasons are plainly excuses for a foregone conclusion, and nothing more. As to the first, the fact that in substance the creditors had waived their rights six months ago (though the present arrangement is not quite the same), would only prove that the creditors were willing, six months ago, to commit the folly which they have now committed. The second reason simply means that the Spanish Government promises not to do a dishonest act, the consideration, as we have seen, being permission to do that act for five years to come. And the third reason is even more illusory, for it is impossible to doubt that the necessities of the Treasury of Spain will require the accommodation for the full term of five years proposed, and that if further “accommodation” is then wanted, the limitation of five years will not prevent the Spanish Government 28 from obtaining it. We do not believe that many of tbe bond¬ holders who met on Monday really accepted the reasons which they professed as their motive for closing with the offer of the Spanish Government. “ The only real reason we can think of is the comparatively practi¬ cal one—that the creditors took what was offered them lest worse should happen. The point of honour of some foreign Governments on the score of paying their debts is so eccentrically placed, that probably the creditors of Spain had some fears that the present Finance Minister, or one of his successors, would take offence at the rejection of his offer, and revenge himself on the creditors by im¬ posing a still heavier tax. We would not say that such fears are unfounded, though, in the long run, so long as people are fools enough to trust a Government like that of Spain at all, the wisest plan would perhaps be not to be too much afraid, but to trust to the screw of exclusion from the money market as the best means of obtaining their full rights. But we hardly care to advise on such a point,* for nothing can really cure the original error of lending to Spain, or to countries like it. “ But besides this real reason, which we hope that, in future, those who are invited to lend to Spain, or to countries like Spain, will consider, there are some other circumstances connected with the present settlement, which are also well deserving their considera¬ tion. At the meeting on Monday, a dead-set was evidently made to obtain the bondholders’ consent. In words, the utmost liberty was left them, but the names of the best men were put forward to move the resolution of acceptance, the most alarming views were expressed as to what would happen if they did not accept, and in particular, the threatened resignation of the present Finance Minis¬ ter of Spain, who has the merit of not professing repudiation like some of his predecessors, was played as a trump card to convince them that acceptance was the only possible thing. In our view, therefore, the Spanish creditors have been persuaded by a variety of motives to agree to a compromise, for which no valid reason can bo 29 •> given, and that such persuasion may be applied in other cases ought to warn intending creditors of countries on whose behalf the propo¬ sal of such arrangements is likely. At the critical moment, they should reflect, they will be in the hands of the great financial houses, and if a mistake is made there will be no redress. They can hardly ever refuse to agree to what such houses recommend. It is also to be observed that there are cases in which such houses are apparently unable to secure full payment by the debtors, whose loans they are willing to negotiate. In this case a member of the house of Rothschild proposed to the creditors of a Government for which his firm has acted as agents, the acceptance of a compromise of their debts. We simply state the fact, and need hardly point out the obvious moral, that even the agency of the greatest house is no security that the Government introduced will not descend to acts of gross repudiation.” SPANISH MINISTERS. During the three months the present Finance Minister, Ruiz Gomez, held the post of Finance Minister, in 1871, he contrived, by means of the honest and enlightened principles he enunciated regarding the sacredness of the Foreign Debt, to raise without difficulty, and without paying a penny to those financial brigand priests called Syndicates, a loan of six millions sterling, in the same manner as those for England and France are contracted. He was actually offered fifty millions sterling, or more than eight times the amount he required. His successor, Senor Angulo, proposed to the Cortes, a few months afterwards, to tax 18 per cent, of the interest of this new loan, and, indeed of all the Foreign Debt. This attempted dis¬ honesty was severely criticised everywhere out of Spain, but the ministerial Spanish press warmly defended the spoliation on the ground of necessity and expediency. A few even actually kept up a controversy with the Times and other London journals, by 30 attempting to justify the proceeding on principle, on account of the high rate of interest at which all the money was borrowed. I have the best opinion of such honest patriots as Serrano, Romero, Ortiz, and Milans del Bosch, and am very hopeful of a brilliant future for Spain, under the Constitutional Government of the present worthy King and Queen, so different from that of Ferdinand and Isabella of 1492, who drove my co-religionists from Spain in that year. I have no doubt that we shall soon emigrate there in large numbers, as a recent Decree (which will be found in Appendix) has naturalised Jewish subjects in Spain. It now affords them means for the exercise of their activity, which do not exist in many other lands. Immigration into Spain from Africa, Syria, and Turkey, is the true remedy for the pauperism of the Jews of these countries. To those blessed with some education, I know no country like Spain where labour affords such a certain means of subsistence, and also of improving their prospects and position. POSTSCRIPT. December 2nd. 1872. A combination of Syndicates are selling Spanish 3 per cents, to an enormous extent, in order to obtain large amounts of the new loan, at a very low figure—say 26 or there¬ abouts. Save us from our friends ! ! ! ! ! m APPENDIX. 1. The late Marshal Prim’s letter to Mr. Guedalla, in French, English, and Spanish. 2. Mr. Guedalla’s letter to Spanish Government, in Spanish and English. 3. Letter from Romero Ortiz to Mr. Guedalla, in Spanish and English. 4. Letter from Serrano to Sir M. Montefiore, Bart., in Spanish and English. 5. Naturalisation of Jews, Decree in Spanish and English. ► 32 A MONSIEUR H. GUEDALLA et autres membres de la communaute Israelite, Espagnole et Portugaise, Londres. Monsieur,—Je re 9 ois la lettre de felicitations, qu’au nom de vos correligionnaires vous m’adressez. Je vous remercie sincerement des sentiments eleves que vous me temoignez. Je suis convaincu que le triomphe de la revolution doit amener sans restriction aucune toutes les libertes religieuses ; mais il n’appartient pas d’accorder par moi-meme ce que vous me demandez si justement. Veuillez done adresser directement au Gouvernement Provisoire ou a son President une supplique dans le genre de celle que j’ai sous les yeux, et faites qu’elle soit redigee en langue Espagnole, afin qu’elle puisse etre examinee immediatement et avec toute attention qui merite une question aussi importante. Veuillez etre, Monsieur, mon interprete aupres de vos correligion¬ naires, et les remercier des souhaits que vous m’exprimez pour la grandeur et la prosperity de l’Espagne. Recevez, Monsieur, l’assurance de mes sentiments les plus distingues. J. PRIM. Madrid, 20 Octobre, 1868. [translation] H. GUEDALLA, Esq., and the Members of the Israelitish Spanish-Portuguese Community in London. Sir,—I received the letter of congratulation which you addressed to me in the name of your co-religionists. I thank you cordially for the noble sentiments which you express for me. I am con¬ vinced that the triumph of the revolution must bring about, without any restriction, every religious liberty ; but it is not for me to grant by my own authority what you so justly ask for. Be, therefore, pleased to address to the Provisional Government direct, or to its President, a Petition in the sense of that which I have under my eyes, and let it be drawn up in the Spanish language, that it may be examined forthwith and with all that attention which so important a question deserves. 33 Be pleased to be my interpreter with your co-religionists, and to thank them for the wishes conveyed by you for the greatness and prosperity of Spain. (Signed) J. PRIM. Madrid, Oct. 20, 1868. A1 Sr. H. GUEDALLA y otros miembros [de la comunidad israelita espahola y portuguesa en Londres. Senor: Recibo la carta de felicitacion que me dirigis en nombre de vuestros correligionarios, y os doy las mas sinceras gracias por los elevados sentimientos que en ella me testimoniais. Estoy convencido de que el triunfo de la revolucion debe llevar consigo, sin restriccion ninguna , todas las libertades religiosas ; pero no esta en mis atribuciones acordar por mi solo lo que me demandais tan justamente. Cuidad de presentar directamente al Gobierno provisional 6 a su presidente, una solicitud en el mismo sentido que la que tengo a la vista, y procurad que este redactada en espahol, con objeto de que pueda ser examinada immediatamente y con toda la atencion que merece una cuestion tan importante. Tened a bien, senor, ser mi interprete con vuestros cor¬ religionarios, y darles gracias por los deseos que en su nombre expresais por la grandeza y prosperidad de Espana. Recibid, senor, la seguridad de mis sentimientos mas dis- tinguidos. J. PRIM. Madrid 20 de Octubre de 1868. A los Exmos Sres. Miembros del Gobierno Provisional] de Espana. Permitanme V. E. que me dirija a ellos, en mi nombre y en el de otros correligionarios, los Judios Espanoles y Portugueses de Londres, transmitiendoles sus felicitaciones, por haber inaugurado bajo tan buenos auspicios una nueva era de felicidad para ese pais; 34 acogiendo a los estrangeros de todos credos y asegurandoles el goce de los mismos derechos que los naturales. Sin embargo, al par que reconecemos con jubilo y agradeci- miento, la importancia de las medidas iniciadas ya por V. E. me atrevo, en mi caracter representative a solicitar una autorizacion formal para volver a entrar en Espana, mediante la revocacion del edicto de destierro esepdido, el 20 de Marzo de 1492, contra los que profesan neustra Fe; estando seguros de que Y. E. consideraran la abolicion de toda incapacidad legal existente, como la consecu- encia natural de una politica de reforma. Una vez obtenidos todos los privilegios de ciudadancia y libertad de conciencia, por medio de la ilustrada Administracion del Gobierno de que Y. E. son Miembros tan distinguidos, podra este contar, en lo futuro, con el eficaz celo y activa co-operacion de neustra comuni- dad, que contribuira a la prosperidad y gloria de la Espana. Con sentimientos de profundo respecto, y con la debida venia, me subscribo de Y. E. Su mas bumilde y adicto servidor, H. GUEDALLA. London, 29th October, 1868. [translation.] To their Excellencies the Members of the Provisional Government of Spain. Allow me, in my name and that of my co-religionists, the Spanish and Portuguese Jews of London, to convey to you their congratula¬ tions on your having inaugurated under such excellent auspices a new era of happiness in that country, in welcoming strangers of all creeds, and granting them the enjoyment of the same rights as natives. While acknowledging with joy and gratitude the importance of the measures initiated by your Excellencies, I am bold enough, in my representative capacity, to solicit a formal authorisation to enable Jews to enter Spain by means of the revocation of the edict of banishment, promulgated on March, 20, 1492, against those pro- fessing our faith; feeling assured that your Excellencies will con¬ sider the abolition of all existing legal disabilities as a natural consequence of a policy of reform. Having once obtained all the privileges of citizenship and liberty of conscience, through the instrumentality of the illustrious ad¬ ministration of the Government of which your Excellencies are such distinguished members, it may reckon in future on the active zeal and efficient co-operation of our community in promoting the pros¬ perity and glory of Spain. With sentiments of profound respect, and with due submission, I subscribe myself, your Excellencies’ most humble and obedient servant, (Signed) H. GUEDALLA. London, Oct. 29, 1868. Ministerio de Gracia y Justicia. SENOR DON H. GUEDALLA, de Londres. Muy senor mio y de toda consideracion: El contenido de su telegrama de ayer me recuerda el deher que la cortesia me impone de contestar a su atenta comunicacion del 28 de Noviemhre. Suponia que V. y los senores en cuyo nombre me escribe desearian obtener una contestacion de caracter puramente oficial, y en este concepto esperaba que, como subditos ingleses, hubiesen dirijido a este Gobierno otra comunicacion sobre el mismo asunto, por conducto de su representante en esta capital. Por lo demas el Gobierno provisional ya ha manifestado una vez a todas las naciones extranjeras cual era el pensamiento de la revolucion respecto al ejercicio de otros cultos distintos del catolico. Reconocido aquel por esas naciones, esta dispuesto a cumplir todos los compromises que contrajo. Y la autorizacion concedida para edificar un templo protestante, desvanece hasta la mas ligera sospecha de que el Gobierno de esta nacion tan consecuente en su hidalguia, pudiera en este punto faltar a bus promesas. 36 * Por lo tanto, el permiso para construir la sinagoga a que se refinere, su comunicacion, es asnnto que corresponde exclusivamente a la jurisdiccion del presidente de este municipio, como encargado del cumplimiento de las ordenanzas a que debe sujetarse toda edificacion urbana. Es cuanto tiene que contestarle el que aproveeha gustoso esta ocasion para ofrecerse de V. con toda consideracion affmo, servidor. Q. B. S. M., ROMERO ORTIZ. Madrid, 16 de Diciembre de 1868. [translation.] Ministry op Grace and Justice. SENOR DON H. GUEDALLA, of London. Sir,—The contents of your telegram of yesterday remind me of the duty which courtesy imposes upon me to acknowledge your esteemed communication of November 23. I thought that you and the gentlemen on whose behalf you wrote, would wish to obtain an acknowledgment of a purely official character, and with this idea I hoped that, as British subjects, they would have addressed to this Government another communication on the same subject through the medium of your Representative at the Capital. For the rest, the Provisional Government has already once made known to all nations abroad, what are the views of the Revolution respecting other worships different from the Catholic; and this being recognised by them, it is prepared to fulfil all the engagements it has contracted. The authorisation conceded to build a Protest¬ ant temple removes the least suspicion that the Government of this nation, so consistent in its noble-mindedness, should on this point fail to fulfil its promises. In regard to the permission to build a synagogue, to which your communication refers, it is a matter belonging exclusively to the jurisdiction of the President of this Municipality, who is charged 87 with the carrying out of the regulations to which every city building is subject. I avail myself of this pleasing opportunity to offer to you the high consideration of your affectionate servant, (Signed) M. ROMERO ORTIZ. Madrid, Dec. 16, 1868. A1 SR. MOSES MONTESFIORES, Londres. Muy senor mio: He hecho presente al Gobierno provisional las felicitaciones que le ofrece ese comite de diputados de los judios britanicos, y% tengo la honrosa mision de expresaros la profunda gratitud del Gobierno por vuestra senalada benevolencia y vuestros deseos en favor de esta nacion. Os ruego tengais la bondad de comunicar estos sentimientos a vuestra asamblea. El Gobierno reconoce vuestros elevados sentimientos y desea volver a recordar su inalterable determinacion de que el principio regenerador de la libertad extendera su benefica influencia a lo que es mas caro y mas sagrado a la humana conciencia, a saber; las creencias religiosas. La carta que dirigio el 16 de Diciembre ultimo el senor ministro de Gracia y Justicia por conducto del embajador ingles en esta capital a vuestro correligionario SENOR GUEDALLA, es una prueba incontestable de que no existen prevenciones en Espana con¬ tra ninguna religion. El Gobierno espera que las Cortes rectificaran con su voto esta conducta, que refleja fielmente los deseos de un pais que esta dis- puesto a no permanecer mas tiempo estacionario en medio de los progresos de Europa. Aprovecho esta ocasion etc. * FRANCISCO SERRANO. 38 To SIR MOSES MONTEFIORE, Bart., F.R.S., London. Sir,—I have laid before the Provisional Government the con¬ gratulations offered them through you by the Committee of Deputies of British Jews, and I have had entrusted to me the honourable task of transmitting to you the expression of the profound gratitude of the Government for the signal benevolence evinced by the members of your illustrious Assembly, and more especially for their kind wishes formed in favour of this Nation. I beg you will have the kindness to communicate these sentiments to your Assembly. In return for your highly valued sentiments, and in acknow¬ ledging the same, this Government wishes to put on record once more to-day its unalterable determination that the regenerating principle of liberty shall extend its beneficial influence to that which is dearest and most sacred to the human conscience, viz., to Religious Creeds. The letter addressed on the 16th December last by the Minister of Grace and Justice, through the English Ambassador in this capital, to your co-religionist, H. GUEDALLA, Esq., is an incon¬ testable proof that no disability weighs in Spain upon the professors of any Creed whatever. The Government hope that the Cortes will ratify by their vote this conduct, which faithfully reflects the wishes of a country deter¬ mined to remain no longer stagnant in the midst of the fruitful progress of Europe. Thus much I have to communicate to you, while I beg to subscribe myself, with high consideration, Your obedient Servant, J, SERRANO, DECEETO. Conformandome con lo propnesto por el Ministro de la Gober¬ nacion, y de acnerdo con el dictamen de la Seccion de Gobernacion y Fomento del Consejo de Estado, Yengo en decretal* lo signiente. Articulo 1.—Se concede al Hebreo Josef Ovadia Edery la nacionalidad Espanola que tiene solicitado, entendiendose que esta ha de ser de las Llamadas de cuarta clase con arreglo a las leyes. Articulo 2.—La espresada concesion no producira efecto hasta tanto que el interesado preste juramento de fidelidad a la con- stitucion del Estado y obedencia a las leyes, con renuncia de todo pabellon estrangero. Dado en San Jldefonso a Catorce de Agosto de mil ochocientos setenta y uno. Amadeo. El Ministro de la Gobernacion, Manuel Ruiz Zorilla. DE CEEE.— (Translation.) In conformity with the proposition of the Minister of Govern¬ ment and in accordance with the opinion of the department of Government and Public Encouragement (of the Council of State), I decree as follows : 1st Clause.—Spanish nationality is accorded to the Hebrew, Joseph Obadiah Edery, who has solicited the same, on the under¬ standing that this passes under the summonses of the fourth class with regard to legal regulations. 2nd Clause.—The said concession shall not take effect until the person interested shall take oath of fidelity to the constitution of the state and obedience to its laws, and shall renounce all foreign allegiance. Dated at San Ildefonso, 14th Aug., 1871. AMADEO. To the Minister of Government, Manuel Ruiz Zorilla. „