The World War and After

In March 1924, the council of national economy was created in order to co-ordinate the activities of numerous economic organizations working under several departments. It was divided into six sections: tariffs, valuation of goods for tariff purposes, statistics, commercial information, defence of production, treaties of commerce. The Treasury was heavily burdened with military and Moroccan expenditure. In April 1924, an internal loan was floated (700,000,000 pesetas of four-year-term bonds at 5% and 1% sinking-fund) in order to meet the Treasury bonds issued by them in Oct. 1923. This loan was covered nearly eight times over. In 1923 a national railway council was organized in order to co-ordinate the administration of the railway com panies, the State and the companies sharing in the administration and the State participating in the financial liabilities and assets of the companies. The Government launched a railway loan (Oct. 1925) to the amount of 300,000,00o pesetas at 5% free from tax, with a lesser success due to unfavourable economic circumstances.

New Phase in Morocco.

The problem of Morocco soon monopolized the attention of the president. The expenses con tinued to increase. The budget of 1923-24 had to face a deficit of 576,000,000 pesetas, compared with a deficit of 920,000,000 in the budget of 1922-3, and of I,Ioi,000,000 for 1921-2. The decrease in the deficit in 1923-4 was not due to a reduction in expenses, but to a considerable increase in receipts due to the rise in the assessment of the tax on utilidades (a kind of tax on incomes) and to a better assessment of local and urban tax able property. As for the year 1924-25, while financial papers

estimated the deficit at i,000,000,000, the directorate declared that it did not go beyond 600,000,000. General Primo de Rivera tackled the problem of Morocco with characteristic courage. In the summer of 1924 he decided to carry out a considerable with drawal and a reduction of military liabilities. Primo de Rivera steadfastly resolved to carry out his policy and he deserves credit for having succeeded, first in imposing his views on the Spanish army in the field at the risk, not only of his popularity, but even sometimes of his life, and also in conducting a difficult military retreat covering all the zone between Tetuan and Xauen. Later events, however, obliged him considerably to modify his policy. The sudden attack launched in 1925 by Abdel Krim against the French forces in the French protectorate, led to the combined action of the two countries. The French Government sent to Spain M. Malvy, who negotiated with General Primo de Rivera an agreement for military and political co-operation which led to the recovery of the French territory lost during the first onslaught of the Rifian troops, and to the occupation of Abdel Krim's headquarters, after a brilliant landing in Alhucemas Bay by the Spanish troops. (See further the special article on Mo