SPANISH BONDS. (Hansard, 22 July 1856)

SIR JOHN FITZGERALD

said, that in submitting to the House the claims of certain numbers of persons. Her Majesty's subjects, on the Spanish Government, for an honourable settlement of the Spanish Committee Certificate of Coupon not funded, he considered that it was a question which most materially affected the rights and property of Her Majesty's subjects, and of those who, depending on the faith of nations, had on such grounds advanced their money on loan to the Spanish Government. When an attempt was made to defraud Her Majesty's subjects by the Government of Spain, by a decree of settling the debts thus contracted by confiscating part of the interest due upon that debt, the British creditors of Spain had a right to appeal to their own Government to protect them from the effects of such an arbitrary and unjust decree, and to call upon Her Majesty's Ministers to remonstrate with the Spanish Government. He would not take up the time of the House by entering into a full detail of the origin of the debt contracted by Spain with Her Majesty's subjects; it would be sufficient for him to state, that from the effects of the civil war which occurred in Spain in the year 1832 the resources of the country became exhausted, and it was found necessary by the Government to obtain a loan of £8,000,000 at 5 per cent interest, the security offered being the sale of the national property. That money was chiefly subscribed by British capitalists. The civil war had been put an end to, but he regretted to say that, although the constitutional party triumphed, good government did not follow. Favouritism prevailed, and with it its usual consequences of profligacy and lavish expenditure of the public revenues. Public credit sank and the creditors of Spain were totally disregarded, so that interest for ten years was now due to the English creditors. At length the public 1235 voice was heard, and in the year 1851 Queen Isabella convoked the Cortes, and announced that instructions had been given to her Minister of Finance to arrange the foreign debt on honourable terms. The following announcement was then made by the Minister of Finance (Signor Bravo Murillo):— The Five per Cent Foreign Debt of Spain to be converted into a One per cent Stock, the interest of which was to be gradually increased till it arrived, in the course of nineteen years, to a Three per Cent Stock. Fifty per cent only of the amount of interest due to the British creditors in the Five per cent Stock was acknowledged, and to be capitalised into the new created One per Cent Stock, and thus 50 per cent of the interest due to the English creditor was actually confiscated. Never was such an act of spoliation so unblushingly made public. Not satisfied with depriving the British creditors of four-fifths of their capital, the Spanish Government confiscated 50 per cent of the overdue interest, which was always considered the most sacred part of a debt. That was only a plain statement of the facts, and he would ask, had not the subjects of the British Crown a full right to appeal to Her Majesty's Government to endeavour to seek redress against such an act of spoliation; for the British creditors of Spain had been informed, that if the hard terms offered were not accepted, no acknowledgment whatever of the debt due to them would be made. A noble Lord, now no more, but whose memory was still revered in that House—Lord George Bentinck—when a Member of the House of Commons, brought forward this question, seeking redress from the Spanish Government towards the British creditors, when the noble Lord now at the head of Her Majesty's Government stated, "That though at that period he could not press the subject on the Government of Spain, nevertheless a time might come when Her Majesty's Government would and must interfere." He (Sir J. FitzGerald) did think that there could not be a moment more propitious than the present, when Spain herself, on similar grounds, had actually equipped an armament against Mexico, for the purpose of obtaining redress and compensation for Spanish subjects who had claims on the Mexican Government. Hon. Members, perhaps, were not aware of the orders issued to the officers commanding the armament proceeding to Vera Cruz to enforce 1236 the rights of Spanish subjects? They were as follows:— M. Alvarez has been instructed by General Zabula to notify to the Mexican Government, on his arrival in the Bay of Vera Cruz, that he was ready to present his credentials provided the bonds taken from the Spanish creditors were restored, the interest due on them paid, and the legitimacy of the debt already sanctioned by a treaty again acknowledged. Should the Mexican Government agree to pay and restore the bonds, M. Alvarez will land, and immediately deliver his credentials; if not, he will return to the Havannah, on board one of the steamers, and leave the three other ships in observation before Vera Cruz. It was true that a treaty existed between Spain and Mexico regarding this question, whereas the Government of this country was no party to the transaction between the British creditors and Spain; but was it not incumbent on all European Governments to act strictly up to their engagements with their creditors? And if they should, by deviating from them, forfeit their faith and national honour, and thereby defraud the subjects of any other power, had not the subjects of those powers sought the protection of their representative Governments against such wrongs? Had not the United States always acted upon that rule? Had not France followed the same rule? Was it to be supposed that a power like Great Britain should be an exception, when the rights of her subjects were assailed? Portugal, a much smaller country than Spain, had also repudiated her debts; but that repudiation had been found so detrimental to her financial position, that she had thought proper subsequently to admit the justice of the claims against her. It was not his intention to divide the House on the question, but he hoped that he should elicit a satisfactory statement from the noble Lord at the head of the Government with respect to the adoption of some course which should secure the recognition at least of the claims of the Spanish bondholders.

§ VISCOUNT PALMERSTON

Sir, I entirely concur with my hon. and gallant Friend in the opinion that the course pursued by the Spanish Cortes in regard to these claims is quite at variance with every principle of justice and equity. This money was advanced by the people of this 1237 country at a moment when the Spanish nation were struggling for their liberties, and when pecuniary assistance was absolutely necessary in order to carry on the contest in which they were then engaged. That assistance was supplied, and it was mainly by the means which were furnished to them by individuals here that they were enabled to accomplish the constitutional objects which they had in view. The Spanish Government contend that they did not receive the whole amount of the capital for which they became liable; but that is necessarily the case with Governments which are in great difficulties, and whose credit, therefore, is very small; because their duration is uncertain, and they may be superseded at any time by the opposite party, who may disavow their engagements. Naturally, a Government like that, pro tempore in its character, and raising money under those circumstances, must expect to pay very dearly for the accommodation which it obtains. It is not, then, a just or sufficient answer to the British creditor to say that for every £100 that the Spanish nation is indebted only a certain proportion was received; and, therefore, in point of principle, there can be no question, I think, in the mind of any honourable man as to the obligation of the Spanish nation towards the bondholders. The only question is one of expediency; what course on the part of the British Government is best calculated to obtain justice for these persons? It has always been held that, in the circumstances under which these loans with Spain and other Governments were contracted, it was not advisable for the British Government to interfere officially and directly for the enforcement of these claims. The loans were made on the responsibility of private parties; the Government was no party to the transaction, and therefore could claim no such international right as that asserted by the Spanish Government in regard to their demands upon Mexico, which were founded upon an engagement entered into between the Government of Mexico and that of Spain. We hare always held that it is upon principle not advisable to make this an international question; the British Government has therefore limited its interference to those friendly representations which one Government is entitled to make to another from whose acts its subjects complain that a grievance has arisen. These applications and representations have frequently been made, but I regret to say that 1238 as yet they have not been attended with the success which they deserved. Under these circumstances, I think that my hon. and gallant Friend (Sir J. FitzGerald) will exercise a sound discretion by not pressing I his Motion to a division. Probably the opinion which this House, by its acquiescence in what he has said, may be understood to have expressed on this question may have some effect upon the minds of the Spanish Government and the Spanish courtiers; but of that I should not like to express too great a certainty. I think, however, that Spain would best consult her national dignity and her national honour by not only acknowledging but acting upon the engagements by which she is bound to those who assisted her in an hour of great need.