The whole commercial system of Spain is most erroneously conceived. The prohibitory system is carried to a length absolutely ruinous to the fair trader, and highly injurious to the revenue. The immense duties upon admissible articles, and the total prohibition of others, has occasioned a most extensive contraband trade, both externally,--with the various ports, and along the coast of Spain, and internally,--throughout the whole of the kingdom; and by this trade, admissible articles are introduced into the interior, at from one to three hundred per cent. below the duties imposed. Government could not fail to be benefited by permitting the importation of articles of general use, upon payment of such a duty as would allow the sale of the article at a lower price than is now paid by the consumer to the smuggler. As one example of the impolicy of the system, I may cite a fact respecting the trade in salted fish, the returns of which I have before me. The import of this article into Cadiz in one year, before that city was made a free port, amounted to four vessels, whose cargoes reached 4092 cwt.; while at the free port of Gibraltar, in the same year, forty-one vessels entered, with 89,106 cwt. _the whole of which was intended for the illicit trade_, and passed into Spain through the hands of the smugglers. The duty upon this article is more than one hundred per cent.; the smuggler considers himself remunerated by a gain of twenty-five per cent., so that the article which finds its way into the market through the contraband trade, is sold seventy-five per cent. cheaper than that which is admitted upon payment of the regular duties. The duties upon British manufactured goods, amount almost to a prohibition; they often reach one hundred per cent.; and this trade is therefore also in the hands of the smuggler, who obtains the profit which, under a more wholesome system, might go into the treasury of the kingdom. The fraudulent dealer is also greatly assisted by the custom of granting a royal license to individuals to import a certain limited quantity of prohibited goods; an expediency resorted to in order to meet the exigences of the state: and under the license to enter a hundred tons of merchandize,--the merchant enters perhaps a thousand tons,--a deception easily practised in a country where, among the public officers, a scale of bribery is perfectly understood and acted upon. I must not forget to mention, that the distinction of free port, conferred upon Cadiz, was a government expedient to raise money; and that the sum paid by the city for this privilege, is raised by duties levied upon the entrance of every inland article of consumption.