The sequel is soon told. The Spanish fleet in the Far East was defeated in Manila bay by Admiral Dewey. Admiral Cervera's squadron was destroyed outside the bay of Santiago de Cuba by the United States fleet under Admirals Sampson and Schley. All communication between Spain and her colonies was thus cut off. A U.S. expedition landed near Santiago, and the Spanish garrison surrendered after a fortnight's show of resistance. Shortly afterwards, at the end of July, Spain sued for peace through the mediation of French diplomacy.
End of New World Rule.—The agreement of Aug. 9, signed by M. Cambon, the French ambassador in Washington, in the name of Spain, clearly stipulated that her rule in the New World must be considered at an end, and that the fate of the Philippines would be settled at the Paris negotiations. Spain could not help assenting to a treaty by which she renounced unconditionally all her rights of sovereignty over Cuba and Porto Rico and ceded the Philippine islands and Sulu islands and the largest of the Marianne islands in consideration of the payment of twenty mil lion dollars by America. Thus ended a struggle which only left Spain the Carolines and a few other islands in the Pacific, which she sold to Germany in 1899 for L800,000, and a couple of islands omitted in the delimitation made by the Paris peace treaty of Dec. 12, 1898, and purchased by the United States in 1900.
After the War.—The Liberal Government was held respon sible for the debacle, but the seeds had been sown long before by many and widely diffused mistakes and by hostile influences outside Spain; the cabinet of 1898, moreover, had sought to avert it by every means in its power. The result was that a call was again made upon the Conservatives, then led by Silvela, who was far from possessing the qualities necessary to control the situa tion and to stem the pessimism which overwhelmed the majority of Spaniards. His one real success was achieved for him by the economic policy of his minister of finance, Villaverde, who suc ceeded in less than 18 months in giving a decisive and vigorous impulse to the reorganization of the budget, and of the home and colonial debts. He resolutely reformed all existing taxation, as well as the system of assessment and collection, and before he left office he was able to record an increase of close upon three millions sterling in the ordinary sources of revenue. His reorganization of the national debt was very complete ; in fact, he exacted even more sacrifices from the bondholders than from other taxpayers. The amortization of the home and colonial
debts was suppressed, and the redeemable debts of both classes were converted into 4% internal consols. The interest on all colonial debts ceased to be paid in gold, and was paid only in pesetas, like the rest of the internal debts, and like the external debt held by Spaniards. Alone, the external debt held by for eigners continued to enjoy exemption from taxation, and its coupons were paid in gold ; but the Government consented to a conversion of the 4% external debt into a 3-1-% stock redeemable in 61 years. (A. E. Ho. ; R. AL.) Growth of Religious Orders.—The failure of Silvela com pelled the queen once more to summon Sagasta (March 1909.
i He was at once faced with two problems, very opposite in their nature, which were destined to play a very conspicuous part in Spanish politics. The first was that presented by the growth of the religious orders and congregations, which continued to in crease in number and power and had ignored the law of associa tions of June 1887, which ordered congregations to register their members, and required all except three orders admitted under the concordat to apply for authorization. The queen-regent, on July 19, 1901, issued a decree, countersigned by Sagasta, for enforcing the law.