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la historia del concierto económico en profundidad

The implementation of the Agreement

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In 1876, after the second and last Carlist War, the Fueros were abolished but not completely. By the Law of 21st July 1876, Antonio Canovas del Castillo imposed the obligation for the provinces to make a contribution to the Treasury and to send men to the Army. A year later, due to the refusal of the Deputations to fulfil these obligations, Canovas announced the substitution of the Foral Deputations by Provincial Deputations, which were, to start with, of the same condition as the ones in the rest of the Spanish State. Canovas had to solve the problem of how to make the Provinces effectively pay their taxes in a State where there was nor administrative structure nor accurate statistics in order to assure the fulfilling of the obligation. The provisional solution was to reach an agreement with the Provincial Deputations, made up by lenient men who were not so unwilling to obey the Law of 21st July. By virtue of the reached agreement, the Deputations assumed the payment of the amount the Ministry of the Treasury could have supposedly collected by its own means. Therefore, the Deputations were in charge of the collection of the main taxes, in force at that time, which were included in the agreement. The validity period of the agreement was of eight years. This agreement was to be named Economic Agreement, due to the fact that in the preamble of the Decree of 28th February 1878, which implemented it, there was a reference to the obligation that the Provinces were included within the “economic agreement” of the nation.

As for the Deputations to be able to pay the due amount, it was required that they had the capacity to collect the agreed taxes, together with some duties, which were authorised in the Agreement, though, since before the war, the Deputations were collecting them. From this confused beginning, the Deputations had been able to maintain their particular status and also to adjust the new system to the changing circumstances of the State. In fact, In Bizkaia, after the Second Carlist War there was an intense demographic and economic increase, particularly on the banks of the Nervión. The incipient process of mining extraction, which started during the pre-war period, burst a few years later.

The expansion of the mining industry required new public works, i.e. trains and railroads or an enlargement of the harbour. The Deputation subsidized the railroads but, before the war, it had already financed its own railroad system, the Ferrocarril Minero de Triano, which gave service to the most productive mines at that moment. This railroad system, the only one of public ownership in Spain at the time, and the income it produced, allowed the Deputation not to collect any agreed tax for a period. It should be noted that from the end of the 19th century to the beginning of the 20th century, the mining extraction industry and the exportation of iron mineral to England, Belgium and Germany were at its peak. In addition, iron mineral was also sold to the local iron industry, and Altos Hornos de Bilbao, La Vizcaya and La Iberia, merged in 1901 into Altos Hornos de Bizkaia, S.A.