SPANISH BONDS. (Hansard, 23 March 1847)

LORD BROUGHAM

presented the petition of the Association of British holders of Spanish Bonds, calling the attention of their Lordships to the treatment which they had received from the Spanish Government. It was the petition of Mr. Dempster Heming and Sir T. Lethbridge, Bart., who petitioned in their capacity of, and as representing, a very large and numerous, and formerly a wealthy class, and but for the treatment they had received from the Spanish Government, they would still be very wealthy. They set forth that at various times during the Spanish war of independence against the encroachments of France, they had advanced to the Government of Spain, or had purchased from those who had made advances, several large sums of money; that the entire sum exceeded 70,000,000l.; and that legally, as well as equitably, they were the creditors of the Spanish Government to that amount. He need not remind their Lordships that the history of Spain, and more especially this transaction, furnished a striking illustration of the truth of the politico-economical dogma, that the mere possession of gold and silver does not enrich a nation. Spain had claimed the ownership of the Mexican 320 and Peruvian mines ever since the discovery of the South American continent, but at no period had she possessed any disposable capital: by their industry and mercantile enterprise, the products of those mines had passed into the hands of Englishmen, and Englishmen had thus been enabled to furnish to Spain the means of contending with and ultimately defeating the aggressors on her liberty and independence. If other metals besides gold and silver had not been employed in the course of the Peninsular war, under his illustrious Friend who sat near him, he (Lord Brougham) would not now, perhaps, have to exult in the reflection that, partly by the aid of our capital, the Spanish Government had succeeded in effecting its liberation from the thraldom of the Napoleon usurpation; but it was certainly undeniable that that result was in some sense attributable to the liberal manner in which English capitalists had come forward. It was impossible to speak otherwise than highly of the indomitable spirit which had pervaded—not the Spanish army, for he would say nothing about that—but the Spanish people and the Spanish councils, throughout their long and arduous struggle. He admitted their bravery and their courage; and he did not seek to dispute that sense of the national honour which was so general in Spain; and it was because he conceded all this he was astonished that the Spanish people could ever adopt a course so novel in the history of finance—that course which, being quite original among the inventions of statesmen, had only recently received a name—the old vocabulary not having possessed a name for a thing which was unknown—the coarse term "repudiation." He was astonished that the system of repudiating a debt because it was not convient to pay it—and that was the technical meaning of the invention—should have found votaries, of all the nations of Europe, in Spain. There were many other nations much more likely to have patented the discovery, according to the law of patents, as the importers of it; he could name several, but he would not, because it would be invidious; and there was not one of those he could name who were not more likely to have availed themselves of the benefit of the patent than the Americans—he begged their pardons, he meant the Spaniards. That Castilian honour, which was famed all over the world, would not, he was sure, on inquiry, be found to have departed from the Penin- 321 sula so far as to make it possible that this just debt could be seriously repudiated. By means of those advances the Spanish Government were able to bear a great part—he would not say a very enormous part—but certainly a part in the great struggle for her independence. They had succeeded in that struggle with the help of their capital; they had obtained an independent Government, he would not say by their help—for it did not become those who were useful to others to remind them of it—but they had co-operated with them; and as the success was theirs, why, he would ask, "should the expense be ours?" That was an obvious question, and he believed that a people like the Spaniards—an honourable, high-minded, and chivalrous people—would be the last on the face of the earth to submit to the stain, or who would say, "You helped us; you spent eighty millions for us; we will pocket the proceeds, and not pay one farthing of principal or interest." Even if they were not able at present to pay, that did not absolve them altogether from paying; the obligation continued; and if they could not pay it all at once, let them pay it by instalments; and if they could not pay it in that way as rapidly as justice would require, they should pay it as rapidly as they could. He would call their Lordships' attention to the state of the Spanish revenue, to show it could not be alleged that the Spanish Government was in a state of insolvency. About eleven or twelve years ago their revenue was under six millions; their revenue by the last official return made by their Finance Minister was twelve millions sterling; and having doubled their resources, and the means of paying, he was sure they did not mean to say now, they did not mean to pay anything. Let them pay what they could; and they could now pay more than they could pay if the demand had been made upon them ten or twelve years ago. It happened that the national creditors did not reside in the city of Seville; but he was sorry to say they were to a considerable extent resident in London, and they had been kept for a long time out of this large sum.

§ The EARL of CLARENDON

had been informed yesterday by his noble and learned Friend of the intention to bring forward the petition which had just been presented to their Lordships; and he was now enabled to say that he believed the statement of the petitioners to be perfectly correct. He considered that the 322 remarks of the noble and learned Lord were fully justified by the facts of the case; and he was bound to admit that he did not think there had been any exaggeration whatever in the detail of the injustice with which the petitioners had been treated. Spain, in reality, was not in the position in which, on certain occasions, it suited the Ministers of that country to describe her. Under that system of administration which now existed, the revenues of Spain had gone on gradually increasing since 1836, until they were now double what they had been previous to that period; and if the administrative system were conducted with prudence and economy—if the attention of successive Ministries were not directed to foreign intrigues and home finessing—if their exertions were not engaged in paralysing rather than in developing the resources of the country—Spain would have taken her place as one of the richest and happiest countries in Europe. The noble and learned Lord had praised the proud and indomitable character of the Spanish people; they were also industrious—no people more so, if they had a motive for their industry, and a legitimate reward for their labour. No country in Europe of equal area was more fertile than Spain; and, if the industry of the people and its natural resources were developed, it would be wealthy and prosperous enough to justify the declaration of one of its Finance Ministers, who said that the resources of Spain were sufficient to pay the amount of its debt ten times over. Spain had no right to plead insolvency; but, at the same time, he must say it had never adopted the new word mentioned by the noble and learned Lord—repudiation. It had very often been his duty, when filling an official position in that country, to make representations to the Spanish Government on behalf of the bondholders, and the debt was never denied; on the contrary, it was always acknowledged, and bonâ fide arrangements made for the payment of the interest; but before they could be carried into effect a new revolution occurred—there was a change of Government—and each succeeding Minister seemed to think it his duty to set aside the arrangements of his predecessor. In this manner the claims of the British bondholders had been deferred, and they had been grievous sufferers; in some cases their loss amounted to total ruin. There were cases within his own knowledge in which persons had embarked the savings of a whole life, very 323 imprudently, of course, for it could not be too often impressed upon persons engaged in this kind of speculation, by which many millions of British capital had been recklessly spent and lost, that an individual lending money to a foreign State, without the sanction of his own Government, did so at his own risk. It was also most unfit for individuals to bring their country into danger of a war, upon claims created without the sanction of their Government, either general with respect to that class of claims, or special with regard to particular guarantees. Nevertheless, the Government of this country had never hesitated to press the justice of the claims of the British creditors; and the Minister of Her Majesty at the Spanish Court, under instructions, was lending his assistance to the agent of the creditors in prosecuting those claims, he hoped with some prospects of success. As individuals, no men were more honourable in their dealings than Spaniards; but in a collective capacity, as a Government or Cortes, they had shaken off that individual responsibility, and evaded payment of the debt in a manner fatal to their public credit. The petitioners stated it to be the opinion of jurists that the withholding this payment constituted a casus belli. That was not his opinion; nor did he intend further to allude to it. Considering the character and resources of Spain, he hoped an expression of opinion in this country would materially assist in obtaining some arrangement.