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A foreign perspective on national public finance: Leroy Beaulieu on the Spanish debt troubles of the end of 19th century

San Julián Arrupe Javier, University of Barcelona

All along the second half of the 19th century, successive Spanish governments had attempted to rein in the problems of the public deficit and debt and to stabilize the currency. Not surprisingly, at the end of the century, even if some successful episodes had occurred, the circumstances of public finance seemed to get worse due to the agrarian crisis and the political and colonial crisis. The French public followed this events with interest and kept informed thanks to the reports of some economists. This paper focuses on the contributions of Paul Leroy Beaulieu on the Spanish public finance crisis of the end of the century. Leroy Beaulieu wrote a handful of contributions on L’Economiste français in 1898, in which he dealt with the debt of the government and its maneuvers to stabilize the currency, and the role of the Bank of Spain in this regard. Leroy accused the Bank of Spain of having turned into a mere lender to the Spanish government, leading to a depreciation of the currency and not to observe a desirable orthodox budget policy. This opinion was not without controversy: Théry, after his mission to Spain in 1899, made a very indulgent analysis saluting the Spanish particular way of dealing with the debt and monetary issues. These chronicles show the interest of French economists and the opinion for the ins and outs of the economic evolution of their not so developed neighboring country, in which they had so many economic interests (mines, railways,… and –important– public bonds). Hence stabilization seemed to be of primary concern to them.

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Keywords: public finance, public debt, monetary policy, 19 century,

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