Protocol, he is to be selected by the Dominican Government from members of the Supreme or Circuit Court of Appeals of the United States. The Arbitrators are to meet at Washington within sixty days after the appointment of the third Arbitrator, and the vote of the majority is to be final on all questions submitted to the tribunal. The award is to be rendered on or before the 31st January, 1904.

The Council have been informed that the Government of the United States has named Mr. J. G. Carlisle, late Secretary of the Treasury, as Arbitrator. Some delay has necessarily occurred owing to the revolution and the overthrow of the Government of General Vasquez.

In June 1902 the Finance Minister issued a Decree assigning a portion of the Customs Receipts of the Port of Santo Domingo to the Service of the Internal Debt. The French and Belgian Committees protested against this Decree as being a distinct violation of the arrangement of June, 1901, which they had negotiated, and the Finance Minister subsequently undertook to withdraw it. Remittances for the service of the Bonds stamped as adhering to this Brussels Arrangement were only received irregularly, and it was not until February last that the Coupon maturing April, 1902, was paid at the rate of fr. 3.85 per £20 Bond (say slightly over 1 per cent. per annum). Moreover, this payment was only effected by means of adding to the remittances received a sum of about £4,400 deposited in Europe for the redemption of the arrear Coupons, it being stipulated that this sum should be replaced from the first receipts after the payment of the Coupon.

Owing to the disturbed state of the country the usual

annual publications have not been forthcoming, and the Council is therefore without information relating to the Finances of the Republic. From unofficial sources, however, they understand that the Revenue in 1902, notwithstanding the revolution and the continuous disorder which prevailed in the country during the greater part of the year, amounted to $1,600,000 as against $2,100,000 in 1901, and $2,400,000 in 1900. There appears to be no reason why, with peace and order properly restored, the Revenue should not reach at least $2,000,000, with a progressive increase in the future.

EXCHANGE.

During the past year the rate of exchange has been $5 Currency to $1 United States Gold.

SPAIN.

EXTERNAL DEBT.

* Four per Cent. Perpetual Exterior Debt

Outstanding 1st July, 1903.

Sealed Bonds (1,013,292,100 pesetas), say £40,210,004

* The difference between the amount of Sealed Bonds given here and that shown in the Council's last Report is due to a revision effected in Paris by a Commission, acting on behalf of the Spanish Administration of the Public Debt, which rectified previous mistakes.

HISTORY OF THE DEBT (FOREIGN).

The earlier foreign liabilities of Spain appear to have resulted from financial operations with France, Great Britain and Holland, consequent upon the expenses of various wars. These liabilities were subsequently liquidated and settled by different treaties.

1820-23. During this period the Constitutional Government negotiated Five per Cent. Cortes Loans in Paris and London, to an aggregate amount of about £21,000,000. On the re-establishment of absolute power by Ferdinand VII. in October, 1823, these Loans were repudiated, and not fully recognised until the death of that sovereign in 1833, though during his reign other foreign liabilities were incurred which considerably increased the total Debt.

1834. According to an official statement, the capital of the External Debt, including the above "Cortes" Loans unconverted, amounted to £42,040,000. With the exception of the British and French Indemnity Bonds, issued in 1828, and representing £3,457,000, the Debt was made convertible into "Active" Five per Cent. Bonds and "Passive" Bonds by a decree promulgated in this year. The "Active" Bonds were issued in respect of 66 per cent. of the original capital, and were to bear interest at once. The "Passive" Bonds, issued against the remaining 333 per cent., were to bear no interest, but a sufficient amount thereof was, from 1836, to be converted to replace the "Active" Bonds, cancelled by a Sinking Fund of per cent. At the same time £7,456,000 Five per Cent. "Active" Bonds (calculated to produce about £4,000,000) were issued through Messrs. Ardoin & Ricardo in Paris. Further, the arrears of interest since 1824 on the "Cortes" Loans were funded into "Deferred" Bonds, which were to be converted into "Active" Five per Cent. Bonds by twelve annual drawings, commencing in 1838. The total amount of "Active," "Passive" and "Deferred" Bonds created was £69,235,100.

1837.-Default took place owing to the Civil War.

1841. In this year the arrears on the "Active" Bonds since 1837 were funded into a 3 per cent. stock, upon which interest

was regularly paid up to December, 1872. The subsequent coupons on the "Active" Bonds, however, remained in default up to 1851.

1851.—A Law was passed to carry out a general settlement of the Debt, with the exception of the Three per Cent. Bonds of 1841. By this settlement the whole of the Active Five per Cent. Bonds and 50 per cent. of the arrears of overdue interest accrued since 1841 were converted into New Deferred Bonds, bearing interest at 1 per cent. for the first four years, rising thereafter by 4 per cent. every second year up to a maximum of 3 per cent. This maximum was reached in 1870, and duly paid till the end of 1872. The Bondholders converted under protest, and issued “Certificates" for the remaining 50 per cent. of arrears of overdue interest which had been confiscated by the Government.

1857.-Three per Cent. Bonds. Amount, £7,545,600. Issued to produce a sum of £3,000,000, part of a loan of £5,000,000, which was authorised by a law of 1855, and the balance of which formed an Internal issue. These Bonds appear to have been negotiated in Paris, and, owing to the above confiscation of arrears, were not quoted on the London market.

1867.-The "Certificates" referred to above were converted into Three per Cent. Bonds at the rate of £55. 11s. 4d. per £100 "Certificate" issued, and the Passive Bonds, issued in 1834, which had not been already absorbed by purchases of National Lands, were also converted into this Stock at the rate of £510 Three per Cent. Bonds for £340 Passive Bonds, plus £95. 4s. in cash.

1869.-Three per Cent. Bonds. Amount, £43,623,200. Issued in virtue of Laws of 1867 and 1869, which authorised the raising of Loans to produce £4,000,000 and £10,000,000 respectively.

1870.-Five per Cent. Loan of £2,318,100. (Known as the Quicksilver Loan.) Issued at 80 per cent. by Messrs. Rothschild & Sons. Secured on an annuity of £150,000, payable out of the proceeds of Quicksilver from the Almaden Mines. Extinguished in 1900.