ADVENT OF SLUMP

Evening Post, Volume CXI, Issue 40, 17 February 1931, Page 9

ADVENT OF SLUMP

LUCKY FOR ALFONSO

REPUBLICANISM HALTED

The economic depression that hangs heavily over most of Europe means hard times to tho majority of Governments, but for King Alfonso and hia cohorts the financial and industrial crisis is just good luck, stated the Madrid correspondent of tho "San Francisco Chronicle" recently.

Spanish Bepublicans and Socialists, ■who for more than a year have been playing with the idea of giving King Alfonso his discharge papers, much as a cat toys with a mouse, unexpectedly found their plans upset by a touch of economic depression, manifested through what Spaniards characterise as the "sickness of the peseta." Almost without realising it they have been caught between the devil and the deep sea—the devil of political expediency and the deep sea of an industrial crisis. Tor at least six months the antimonarchists have had the fato ■of Spain in their hands. They could have ousted Alfonso almost at will. At least on two occasions they have postponed starting the revolution because they wanted to make it as painless and bloodless as possible.

With, their objective agreed upon, the political leaders could not agree upon the road to pursue in attaining it, nor even what they were going to do umse tho Bourbon dynastic head had joined tho ranks of the kingly unemployed. There was the question of a republic, of a constitutional monarchy, an economic dictatorship, or oveu a regency pending the eventual re-establish-ment of tho Cortes and return to democratic Parliamentary Government. TJnablo to settle those complicated matters the anti-monarchists dallied along until tho spectre of unemployment, hard times, commercial depression, and financial crisis appeared before them. JXIST BEO-UN. Basically one of the soundest conntrios in Europe, economically, Spain has not until just now felt the effects of ' tho world-wide crisis in commerce and industry. Presumably it has been the political uncertainty that made foreign capital, investors, and trade afraid —not because Spanish investments were not gilt-edged, but because nobody knew what tho regime that would succeed Alfonso might do to certain concessions granted by the Primo de Riviera dictatorship. Now the politicians have found that

■the very thing they have wished to avoid, namely, a shock to tho economic structure of the country, is tho very thing they may havo to face if they forcibly get rid. of Alfonso. Continuation of tho intrigues against tho monarchy, which was the original factor affecting the credit of the country, is now having doubly disagreeable results because tho depression that already exists in most countries is penetrating into Spain and Portugal and France, her next door neighbour. If tho agitation for Republicanism is halted temporarily it will mean for Alfonso a new lease. Conversely tho Bepublicans will suffer a, serious setback. On tlie other hand, if tho present political uncertainty continues or Alfonso is ousted, then the economic situation, despite the fact that there is no valid excuse for tho collapse of the peseta, is ■curtain to become worse. THEIK GREAT FEAR. It now appears that Liberal antimouarchial leaders fear Bolshevism even more than they hate Alfonsoism. They have no intention of jumping from the frying pan into tho fire. They agree with tho King that the real question is the welfare of Spain, not a matter of a republic or the monarchy. Tho difference is that the Socialists and Bepublicans are honest in their convictions, while there is reason to assumo that Alfonso is moved largely by a desire to keep his throne. The General Federation of Labour and the Catalonian Syndieos—a Com-munist-anarchist workers' organisation —are the most cohesive groups in Spain at the moment. The Socialists and Republicans to a large extent control the Federation, but they are having a hard fight to keep the radical element in hand. Any move for the bad of the economic situation will make their task more difficult. The recent strikes in Madrid and Barcelona reveal the prccariousness of their control. And consequently those sincerely concerned with the welfare of tho country will think twice before letting a fire start again. This applies to both the Berenguer regime and the anti-monarch-ists. Faced with this predicament, what p«an the Bepublicans do? They have Alfonso in the palm of their hands, but they hesitate to throw him. out because thoy are not certain what will follow. A troubled political . period ■complicated by unemployment and hard times, which would be capitalised by the Communists, is for once justifying the inherent passion of the- Spaniards for procrastination. The policy of "jnanana" needs no apology now. A PARADOX. Tho "sickness of the peseta" is an economic paradox. According to financiers and economists, there is no logic in its weakness. The Bank of Spain has its coffers filled with gold. Tho legal coverage on an issue of six milliards of pesetas (thero are only 4,400,000,000 in circulation actually) is 50 per cent., which is far above the legal coverage that the American Treasury must keep on hand. There is a 58 por cent, gold coverage in the bank's reserve, while in foreign banks there is an .additional 2 per cent, on deposit. Besides this, 28 per cent, of Spain's currency is hard —silver. There are few unemployed in Spain, even to-day—between 30,000 and 40,000 at the most. Prices have not fallen and business is good. Admittedly the defunct Primo de Bivera dictatorship squandered a lot of money, but then Spain, as a result of being neutral during the war, had money to squander. Bailroads and highways "were built, bridges constructed, and irrigation, projects started. These cost a lot of money—almost four times as much as the samo improvements would have cost under a more efficient and conscientious administration. But Spain has the roads and she has the beginnings of a.n irrigation system that may revolutionise agriculture to show for it. Then there were the two expositions — Barcelona and Seville. The Barcelona show cost more than 300,000,000 pesetas and the deficit is estimated at 190,000,000 pesetas. The Seville divertissement cost the taxpayers another 100,000,000 pesetas. Taken together, they make a large-sized dent in the exchequer. The fact that the Borenguer Budget is practically the same as the last one of his predecessor, General Primo de Eivera (a cut of 5 per cent, has been announced), indicates that tho Government is not really concerned about saving money. Officials admit that the so-called "transitional regime" is spending even more because while tho Budget has been cut to- 3,300,000,000 pesetas, at the same time a large amount of public work has been discontinued, affecting an even greater expenditure than the 5 per cent, that has been lopped off. HOPED TO REMAIN. The explanation, according to Republicans, is that General Berenguer intends to remain in power for years to come, Parliament or no Parliament, and the political leaders are not blind to this possibility. They are weighing it carefully against tho evils that might follow a sanguinary revolution. Such leaders as Marcelino Domingo, Republican; Garcia Prieto, Socialist, and Ossoreoy Gallardo, successor of Antonio Maura, havo pledged themselves to block any election they are not convinced is "on the level." The political and economic situation in Spain presents a ' tangled skein, Formerly it was the political situation, with its uncertainties that dominated tho economic and financial situation. Now the tables are turned and tho economic crisis, which level-headed leaders believe will push the country toward Bolshevism if it becomes aggravated, completely dominates the political outlook. At the moment King Alfonso can afford to put up a brave front because he knows that his enemies consider him tho lesser of two evils.