VOL. XIX.

NO. 1.

Two Years in Retrospect.

Twelve months ago this department of the REVIEW characterized the year 1897 as one that had closed upon "a vast deal of unfinished business in this particular planet that we inhabit." Among unsettled questions of international concern that the year 1898 had received as a legacy from the year 1897, a considerable number were specified. In view of all that has happened in the eventful twelve months of 1898, it is by no means uninstructive to run through that résumé, which occupies some pages at the beginning of our issue for last January. There are times when everything seems to drag-when the world, if moving at all, would appear to be drifting backward; but a comparison of the state of the world at large one year ago with the conditions that exist to-day ought to bring assurance to the most skeptical that there is such a thing as progress, and that the times in which we live are very notable times in which to work and to observe. We remarked last January that the year 1898 promised to be a momentous one for the people of Spain and of the Spanish colonial possessions, in view of the state of affairs in the Philippines and in the West Indies. As for ourselves, we had not then determined what this country ought to do about Cuba. We had not settled the question of Hawaiian annexation. We were still con fronted with the irritating problem of the seals in the North Pacific. And there were other less conspicuous international questions the discussion of which was carried over into the new year. As for our British friends, they were engaged in a very disagreeable dispute with the French over boundary questions in West Africa; they were anxious over a great variety of diffi culties that had come up in the course of their administration of India, the most momentous of which was the costly and dangerous war with the mountaineers on the far northwestern frontier near Afghanistan; they were watching with some confidence, but not without anxiety, the

slow but seemingly sure progress of General Kitchener, who had advanced a considerable distance on his great undertaking for the ultimate rescue of Khartoum and the reconquest of the Egyptian Soudan. England was seriously concerned, moreover, about the condition of affairs in South Africa, and not a little excited over the threatened break-up of China and what was regarded in England as the undue growth at Peking of the power of the European continental governments. It is true that the last month of 1897 had witnessed the signing of the peace treaty between Turkey and Greece; but the Turkish troops had not been withdrawn from Thessaly, while the problem of Crete, about which the war had originated, was seemingly as far as ever from being settled, and the European admirals with their naval forces were still on patrol duty in Cretan waters. Italy and Austria had been seriously disturbed by internal difficulties. France had been almost convulsed by the violent dissensions that had grown out of the Dreyfus question.

The Historic Year 1898.

The year 1898 is to be characterized as one that has witnessed the accomplishment of many things and that has provided several magnificent chapters in the history of progress toward the firm establishment of peace and order among the nations. Nothing could be more mistaken than to suppose that the principal exhibitions of armed force that the world has seen in 1898 have made for the triumph of brute force over justice and right. On the contrary, the English-speaking men who have in 1898 opened the Nile, made Khartoum accessible once more, and brought the Soudan into relations with the outside world, have performed a most noble and humane task for civilization and peace. The empire of the Kalipha meant the sword and the torch as the chief business of life. The men who had destroyed Edhem Pasha's army and had afterward murdered Gor

don at Khartoum had spread devastation throughout a vast region, destroying the lives of millions of men, women, and children. With much bloodshed, it is true, but with as little as possible, General Kitchener has annihilated that evil dominion of the Kalipha, while leaving every Mohammedan in the Soudan as free as are the Mohammedans in India in their customs and re

DREAMING-TIME."-From Punch (London). (Apropos of the success of General Kitchener's appeal for money with which to build the Gordon Memorial College at Khartoum.)

ligious observances. No less praiseworthy than No less praiseworthy than the splendid missionary work of Kitchener and his men has been the execution by the people of the United States of a righteous judgment against Spain's attempt to continue by brute force to exercise sovereignty in colonial possessions where the inhabitants had rebelled for good cause and where it had been demonstrated that those inhabitants could be subdued only by extermination.

rendered very substantial service to the people resident in the Spanish West Indies and to all legitimate commercial interests in any manner affected, while we have also performed for Spain an amputation that was absolutely required by the existing conditions. For reasons economic and political, which we may not pause here to sum up, it became inevitable, after the close of our Civil War and the emancipation of the slaves in this country, that Spain must certainly lose Cuba in the near future. The ten years' war, lasting from 1868 to 1878, cost Spain the lives of more than two hundred thousand troops and a stupendous sacrifice of wealth. The end of that war was an inconclusive compromise, and the leaders in the movement for Cuban freedom, far from abandoning their cause as hopeless, took to heart the lessons derived from the ten years' struggle and waited more or less patiently for the time to come when it would be advantageous to renew hostilities, knowing that Spain could not forever hold in subjection a determined people living. three thousand miles away. The Cuban question had been so interlinked in the history of American policy for seventy-five years that our intervention when a suitable juncture had arrived was as inevitable as any of the great laws of nature. The successive events in the story of that intervention have absorbed the attention of the people of the United States during the greater part of the year now ended.

The World's

Improved

Balance.

The swift success of our aggressive policy has left the whole world in a far more stable position than we found it at the opening of the year. The annexation of Hawaii has given that interesting group of islands a settled status, and our assumption of responsibility for the Philippines will speedily bring about a vastly improved situation in that populous archipelago. We ought to have no serious difficulty in assisting the Cubans to restore order throughout the island and to maintain fairly efficient institutions under republican forms. The wisest men in Spain are venturing to express somewhat boldly the relief that they feel in the wholesome chastening that has come to them in the painful year 1898. This view has been taken by business men especially, and prevailed in the conference of Spanish chambers of commerce that has met at Saragossa. Some of the most intelligent Spanish writers are taking the ground that under modern conditions the responsibility of sovereignty over distant colonies is far more costly than profitable, and that except for the point of pride involved Spain is greatly better off without Cuba and the Philippines than with them. Of course the two situations are totally

different. Cuba was entitled to one sort of administration and the Philippines to another. The Spaniards should have learned long ago to give Cuba to the Cubans in as complete a sense as the English have given. Canada to the Canadians, while they should also have learned long ago to admin. ister the Philippines strictly for the benefit of the popu lation, following to a considerable extent the model of England in India. The time had come when it was too late to reform the abuses of Spain's bad colonial gov ernment, and there was no remedy except to abandon the colonial business altogether. This heroic remedy

It has to

The Carlist

None the

is one that the nations which need it never have the grace to administer to themselves. be forced upon them from without. less, they may in good time learn to appreciate the service that has been done to them and forget the first smart. Spain may quite possibly have a bad year or two at home with which to end the nineteenth century; but it is reasonable to predict that the Spaniards will open the twentieth with very excellent prospects. For the first time in years they have an undisturbed opportunity to give attention to home affairs.

THE SPANISH PRETENDER'S SON, DON JAIME DE BORBÓN.

pects.

The Carlists have been making much Rumors and ado, but it is by no means certain Spanish Pros- that they can muster a large force or that they will find any very widespread sympathy among the people. There is no large appetite in Spain, any more than in any other country, for civil strife. The Spanish farmers and the Spanish business men alike want peace, not war. The vigorous action of the United States has concluded three Spanish wars-namely, the war against the Cuban army of liberation that had been continuing for three years, the war against the insurgents in the Philippines that had, with some intervals of quiescence, continued for at least two years, and the war with the United States. All these are now at an end. Spanish mothers are welcoming their surviving sons home from the West Indies, and are counting upon the almost immediate return of those in the Philippines, a majority of whom have been held as prisoners of war by the Americans, while a large part of the remainder have been in a more perilous position as prisoners in the hands of the insurgents. The Spanish people have had all the war they want. They are not fond of Sagasta as a prime minister. some are they devoted in any blind sense to tinarvenble Queen Regent and her young son. But since the maintenance of the Queen Regent and the young King, together with the orderly continuance of the parliamentary régime, means stability and order, there is no general desire upon the part of the Spanish people to indulge in any revolutionary proceedings whatsoever. There is unrest and discontent beyond a doubt, but there seems no tide of opinion or pub

DON CARLOS IN A HIGHLY PROFITABLE RÔLE.

(The Pretender is represented as having secured English gold and borrowed funds on the strength of a cause that he works for what there is in it.)

debt and the general reorganization of affairs on a peace basis. It must be remembered that Spain has been for more than three years upon a war footing, with all that that term implies. After the ten years' struggle in Cuba and the Carlist wars at home the public debt of Spain had grown to such dimensions that it became necessary in about 1882 to go through with what was virtually a proceeding in bankruptcy. The public debt was scaled down about half, and the creditors of Spain were obliged to accept something like fifty cents on the dollar of the principal, not to mention a good deal of reduction in the rate of interest. Spain will doubtless endeavor to divest herself of as large a part of her burden of fresh indebtedness as the never-failing ingenuity of Spanish statesmanship can find ways to repudiate. The first step, probably, will be the disavowal of responsibility for what the Spaniards persistently call the Cuban" debt. They will perhaps manage to make this phrase carry something like five hundred million dollars of money that they have borrowed and spent. It will be claimed by the Spaniards that the holders of these particular issues of Spanish bonds must look to Cuba or the United States for their pay. The principle involved is so clear that under no consideration could the Cuban republic or the United States on behalf of Cuba admit responsibility for one penny of this amount. Analogies always help one to understand such questions, and no more perfect analogy could be offered than the supposititious case of Great

From Don Quixote (Madrid). principles; and even his ostentatious devotion to the Church is not likely to serve him any practical purpose, in view of the fact that the Vatican will be on the side of the existing order of things. He is very rich-at least he has a very rich wifeand he has nothing to be seriously unhappy about. The Carlists have undoubtedly been endeavoring to win over to their side the returning soldiers by regiments and brigades; but the gov ernment, on the other hand, is thoroughly informed and very much on its guard against that particular danger. The army will be so distributed and dispersed as to minimize the possibility of its being employed against the present régime. General Weyler is understood to have rejected all Carlist overtures and to be supporting Sagasta. It is to be extor, in the constitutional order of things, that Ania, have inistry will resign and that a conservative prime minister and cabinet will come into office very soon. this mild change, however, may be deferred for some weeks or months.

Even

DON CARLOS: "Unless you contribute to the cause I will cross the frontier! '-From Don Quixote (Madrid).

Britain's repudiating the debt incurred by her in the Revolutionary War and instructing her bondholders to try to collect the money either from the young American confederacy or else from France. The fact that England might or might not have made pledges of American revenues as a part of the security for such bonds could have no relevancy in view of the success of the American Revolution.

Outlook for the "Cuban"'

ebt.

One of the particular reasons why the Cubans fought to throw off the Spanish yoke was their desire to rid themselves of the burden of paying interest every year on an immense portion of the Spanish public debt. The purchasers of such bonds, which, of course, have to a large extent changed hands from time to time, have bought them and sold them with a full knowledge of the risks involved. Such bonds have been selling a very long way below par for the two reasons that, first, Spain herself was close to bankruptcy, and, second, Spain was on the point of losing control of the Cuban revenues which she had pledged as security. The possibility of the Cubans winning their independence was always a depressing element in the market value of those bonds. It was not in the least understood by anybody that the obligation went with Cuban sovereignty, but that it merely went with Spain's hold upon Cuban revenues. If it had been understood that the Cuban" debt, so called, was in reality a Cuban and not a Spanish liability, then the fact that America was emancipating Cuba would have stiffened the price of those securities in the market, whereas, in fact, it immediately took a large part of the value out of them. Some Spaniards, at least, have been deluding themselves with the idea that the French and other foreign holders of the bonds under discussion would succeed in getting their governments to raise a diplomatic question with the United States. But even if such a question should be raised it would not be seriously pressed. And it would not, of course, be entertained for a moment by the Government of the United States. It appears that most of these obligations are held by Spaniards in Spain, and that they will be altogether repudiated is likely enough, although the current interest coupons are being honored by the Spanish Government in order to prevent a crisis.

Fifteen years

ago Spain scaled her interest-bearing debt down from about $2,400,000,000 to $1,200,000,000.

Private Versus Public Finance.

The French and other foreign holders might, if they chose, enlist the services of their governments in an endeavor to secure justice at Madrid. But even this is not likely to happen. The recent practice of using governmental authority and prestige to help private investors collect claims against foreign public treasuries is not to be commended on any account. It is a very dangerous practice. It enables certain great banking onbinations in Europe to stimulate recklessness and extravagance on the part of small countries, with the result of the issuing of large public loans, which these bankers are a he in the course of time to buy up at low figures because of the irregularity of interest payments and the general uncertainty of the security.

upon these bankers at the favorable moment enlist the services of their own powerful governments to secure some arrangement for financial control or intervention to get the revenues of the small state mortgaged for the benefit of the foreign debt, and thus turn the bad securities into gilt-edged ones at very large profits to themselves. If Spain chooses to repudiate her debt there should be no governmental interference from the outside. The speculative investor ought to pocket his losses along with his gains. This topic is a pertinent one in view of

H