Commerce And Finances

Until the year 1813 the captains-general of Puerto Rico had the

superintendence of the revenues. The capital was the only authorized

port open to commerce. No regular books were kept by the authorities.

A day-book of duties paid and expended was all that was considered

necessary. Merchandise was smuggled in at every part of the coast,

the treasury chest was empty, and the Government officers and troops

were reduced to very small portion of their pay.



The total revenues of the island, including the old-established taxes

and contributions, produced 70,000 pesos, and half of that sum was

never recovered on account of the abuses and dishonesty that had been

introduced in the system of collection.



An intendancy was deemed necessary, and the Home Government appointed

Alexander Ramirez to the post in February, 1813. He promptly

introduced important reforms in the administration, and caused regular

accounts to be kept. He made ample and liberal concessions to

commerce, opened five additional ports with custom-houses, freed

agriculture from the trammels that had impeded its development, and

placed labor, instruments, seeds, and modern machinery within its

reach. He printed and distributed short essays or manuals on the

cultivation of different products and the systems adopted by other

nations, promoted the immigration of Canary Islanders, founded the

Royal Economic Society of Friends of the Country, and edited the

Diario Economico de Puerto Rico, the first number of which appeared

February 28, 1814.



The first year after the establishment of these improvements,

notwithstanding the abolition of some of the most onerous taxes, the

revenues of the capital rose to $161,000, and the new custom-houses

produced $242,842.



Having placed this island's financial administration on a sound basis,

Ramirez was called upon by the Government to perform the same valuable

services for Cuba. Unfortunately, his successors here soon destroyed

the good effects of his measures by continual variations in the

system, and in the commercial tariffs. They attempted to prevent

smuggling by increasing the duties, the very means of encouraging

contraband trade, and the old mismanagement and malversations in the

custom-houses revived. One intendant, often from a mere spirit of

innovation, applied to the court for a decree canceling the

regulations of his predecessor, so that, from the concurring effects

of contraband and mismanagement, commerce suffered, and the country

became once more impoverished.



The revenues fell so low and the malversation of public money reached

such a height that the captain-general found it necessary in 1825 to

charge the military commanders of the respective districts with the

prevention of smuggling. He placed supervisors of known intelligence

and probity in each custom-house to watch and prevent fraud and

peculation. These measures almost doubled the amount of revenue in the

following year (1826).



As late as 1810 the imports in Puerto Rico exceeded three times the

sum of the produce exported. The difference was made up by the

"situados," or remittances in cash from Mexico, which began early in

the seventeenth century, when the repeated attacks on the island by

French and English privateers forced the Spanish Government to choose

between losing the island or fortifying it. The king chose the latter,

and made an assignment on the royal treasury of Mexico of nearly half

a million pesos per annum. With these subsidies all the fortifications

were constructed and the garrison and civil and military employees

were paid, till the insurrection in Mexico put a stop to the fall of

this pecuniary manna.



It was fortunate for Puerto Rico that it ceased. The people of the

island had become so accustomed to look to this supply of money for

the purchase of their necessities that they entirely neglected the

development of the rich resources in their fertile soil. When a

remittance arrived in due time, all was joy and animation; when it was

delayed, as was often the case, all was gloom and silence, and

recourse was had to "papeletas," a temporary paper currency or

promises to pay.



With the cessation of the "situados" the scanty resources of the

treasury soon gave out. The funds of the churches were first

requisitioned; then the judicial deposits, the property of people who

had died in the Peninsula, and other unclaimed funds were attached;

next, donations and private loans were solicited, and when all these

expedients were exhausted, the final resort of bankrupt communities,

paper money, was adopted (1812).



Then Puerto Rico's poverty became extreme. In 1814 there was at least

half a million paper money in circulation with a depreciation of 400

per cent. To avoid absolute ruin, the intendant had recourse to the

introduction of what were called "macuquinos," or pieces of rudely

cut, uncoined silver of inferior alloy, representing approximately the

value of the coin that each piece of metal stood for. With these he

redeemed in 1816 all the paper money that had been put in circulation;

but the emergency money gave rise to agioist speculation and remained

the currency long after it had served its purpose. It was not replaced

by Spanish national coin till 1857.



The royal decree of 1815, and the improvements in the financial

situation, as a result of the new administrative system established by

Ramirez, gave a strong impulse to foreign commerce. Though commerce

with the mother country remained in a languishing condition, because

the so-called "decree of graces" had fixed the import duty on Spanish

merchandise at 6 per cent ad valorem, while the valuations which

the custom-house officials made exceeded the market prices to such an

extent that many articles really paid 8 per cent and some 10, 12, and

even 15 per cent.



An estimate of the commerce of this island about the year 1830 divides

the total imports and exports which, in that year, amounted to

$5,620,786 among the following nations:





Per cent. Per cent.



West Indian Islands imports 53-12 Exports 26

United States imports 27-14 " 49

Spanish imports 12-18 " 7

English imports 2-34 " 6-12

French imports 2-58 " 6-58

Other nations' imports 1-34 " 8-34







The American trade at that time formed nearly one-third of the whole

of the value of the imports and nearly half of all the exports.



An American consul resided at the capital and all the principal ports

had deputy consuls. The articles of importation from the United States

were principally timber, staves for sugar-casks, flour and other

provisions, and furniture.



* * * * *



The financial history of Puerto Rico commences about the middle of the

eighteenth century. In 1758 the revenues amounted to 6,858 pesos. In

1765, to 10,814, and in 1778 to 47,500. Their increase up to 1,605,523

in 1864 was due to the natural development of the island's resources,

which accompanied the increase of population; yet financial distress

was chronic all the time, and not a year passed without the

application of the supposed panacea of royal decrees and ordinances,

without the expected improvement.



From 1850 to 1864, for the first time in the island's history, there

happened to be a surplus revenue. The authorities wasted it in an

attempt to reannex Santo Domingo and in contributions toward the

expenses of the war in Morocco. The balance was used by the Spanish

Minister of Ultramar, the Government being of opinion that surpluses

in colonial treasuries were a source of danger. To avoid a plethora of

money contributions were asked for in the name of patriotism, which

nobody dared refuse, and which were, therefore, always liberally

responded to. Of this class was a contribution of half a million pesos

toward the expenses of the war with the Carlists to secure the

succession of Isabel II, and Sunday collections for the benefit of the

Spanish soldiers in Cuba, for the sufferers by the inundations in

Murcia, the earthquakes in Andalusia, etc. From 1870 to 1876 a series

of laws and ordinances relating to finances were promulgated. February

22d, a royal decree admitted Mexican silver coin as currency. December

3, 1880, another royal decree reformed the financial administration of

the island. This was followed in 1881 by instructions for the

collection of personal contributions. In 1882 the Intendant Alcazar

published the regulations for the imposition, collection, and

administration of the land tax; from 1882 to 1892 another series of

laws, ordinances, and decrees appeared for the collection and

administration of different taxes and contributions, and October 28,

1895, another royal decree withdrew the Mexican coin from circulation.

In the same year (March 15th) the reform laws were promulgated, which

were followed in the next year by the municipal law.



In the meantime commerce languished. The excessively high export

duties on island produce imposed by Governor Sanz in 1868 to 1870

brought 600,000 pesos per annum into the treasury, but ruined

agriculture, and this lasted till the end of Spanish rule.



The directory of the Official Chamber of Commerce, Industry, and

Navigation of San Juan, at the general meeting of members in 1895,

reported that it had occupied itself during that year, through the

medium of the island's representative in Cortes, with the promised

tariff reform, but without result. Nor had its endeavors to obtain the

exchange of the Mexican coin still in circulation for Peninsular money

been successful on account of the opposition of those interested in

the maintenance of the system. The abolition of the so-called

"conciertos" of matches and petroleum had also occupied them, and in

this case successfully; but the directors complained of the apathy and

the indifference of the public in general for the objects which the

Chamber of Commerce was organized to advocate and promote, and they

state that within the last year the number of associates had

diminished.



The Directors' report of January, 1897, was even more gloomy. They

complain of the want of interest in their proceedings on the part of

many of the leading commercial houses, of the lamentable condition of

commerce, of the inattention of their "mother," Spain, to the

plausible pretentions of this her daughter, animated though she was by

the most fervent patriotism.