PORTUGUESE ECONOMY.

Waikato Times, Volume XXXVIII, Issue 3103, 4 June 1892, Page 2 (Supplement)

PORTUGUESE ECONOMY.

The example recently set by the Government of Uruguay, of scaling down the interest on th« public debt, and thereby making the public creditor suffer for the sins of extravagance and worse which brought tlip republic to tho verge (if bankruptcy, has not been long in bearing fruit. For some time past rumours have been afloat as to Portugal's practical inssolrency, and now the l.'oi tiirjHcsi. , Minister of Finances has boldly announced it. The income and expenditure of that small state fail to reach an equilibrium the deficienty of the former beina something like £2,2'>0,000 in the budget for the current year. There has baen some talk of selling Portugal's colonial possessions in Africa, which are only a burden to her at present, r.s she is unable to develop them; while they , would, doubtless, be bought by the British Chartered Companies, or tho British Government, for a good rounr. sum— £12,000,000 beinc; mentioned as the probable price for the territory south of Mozambique, a sum which would meet the deficit for more than live years. But this reasonable measure finds no place in the Finance Minister's proposals. To him the way out of financial embarassment is the easier one of partial repudiation of the National Debt—a course which minor European States, like Spain and Greece, have adopted in former years, and South Ainericin republics seem to regard as a legitimate and reasonnble method. The bulk of the Portuguese foreign debt, of about £47.000,000, bearing the low rate of iiterest of 3 per cent, is held by foreigners so that the proposal to cut this down by one half seems to a Portuguese Minister a natural and pro. vidcntially-provided resource ! It may be successful for the moment, just as those arrangements between debtors and their creditors that occur in private life under our Bankruptcy law enable a man to get vid of his liabilities. But a wholesale confiscation of this gigantic order cannot be effected without annulling the national credit, The widespread misery resulting from loss of income to thousands who thought there were secure, and can hardly be blamed for confiding in a nation's credit, will not soon be forgotten or forgiven, and a Nemesis, in the shape of total loss of national credit, will follow tho defaulting country for many a loag year. Those who, deceived by a superficial resemblance, imagine that there is an analogy between this compulsory conversion on the pare of Uruauny and Portugal and Mr Goscben's conversion of British consols, should remember that all holders of conaola had the option of takiui? payment of their capital ia full. In tho oases of Uruguay and Portugal, it is needless to gay, no such offer is or enn ho made, and that constitutes all foe difference.