quintals could not be sent--hence
purchases of Philippine tobacco had to be made by tender in London
for the Spanish Government cigar factories.

At length, during the government of General Domingo Moriones (1877-80),
it was resolved to listen to the overwhelming complaints from the
North, and pay up to date in coin. But, to do this, Spain, always in
a state of chronic insolvency, had to resort to an abominable measure
of disloyalty. The funds of the Deposit Bank (_Caja de Depositos_)
were arbitrarily appropriated, and the deposit-notes, bearing 8 per
cent. interest per annum, held by private persons, most of whom were
Government clerks, etc., were dishonoured at due date. This gave rise
to great clamour on the part of those individuals whose term of service
had ceased (_cesantes_), and who, on their return to Spain, naturally
wished to take their accumulated savings with them. The Gov.-General
had no other recourse open to him but to reinstate them in their old
positions, on his own responsibility, pending the financial crisis
and the receipt of instructions from the Government at Madrid.

For a long time the question of abolishing the Monopoly had
been debated, and by Royal Order of May 20, 1879, a commission
was appointed to inquire into the convenience of farming out the
tobacco traffic. The natives were firmly opposed to it; they dreaded
the prospect of the provinces being overrun by a band of licensed
persecutors, and of the two evils they preferred State to private
Monopoly. Warm discussions arose for and against it through the medium
of the Manila newspapers. The "Consejo de Filipinas," in Madrid,
had given a favourable report dated May 12, 1879, and published in
the _Gaceta de Madrid_ of July 13, 1879. The clergy defeated the
proposal by the Corporations of Friars jointly presenting a Memorial
against it--and it was thenceforth abandoned. The Tobacco Monopoly
was the largest source of public revenue, hence the doubt as to the
policy of free trade and the delay in granting it. There existed a
possibility of the Treasury sustaining an immense and irretrievable
loss, for a return to Monopoly, after free trade had been allowed,
could not for a moment be thought of. It was then a safe income to
the Government, and it was feared by many that the industry, by free
labour, would considerably fall off.

As already stated, the Government Monopoly ceased on December 31,
1882, when the tobacco cultivation and trade were