Manuel de Falla and Igor Stravinsky: From National Schools to International Markets

Abstract

During the first half of the twentieth century, musicians from the so-called “National Schools” combined European classical music with rhythms and melodies from the folkloric roots of their countries, giving way to a renewal and revaluation of traditional music. This chapter studies the economic situation of two great composers ascribed to this movement: Manuel de Falla and Igor Stravinsky. They met in Paris, establishing a friendship until the end of their lives, which in both cases, due to the political situation of their times—marked by armed conflicts—ended far from their place of birth: respectively Argentina and the United States. Both followed radically different business models which resulted in no economic output: Falla avoiding personal fame, Stravinsky becoming a “luxury” brand. The chapter closes with an appendix by the late professor Juan Velarde Fuertes in which he reveals the economic reason behind Falla’s decision not to return to Spain after the Civil War.

An Appendix for Spanish Readers: Manuel de Falla and the Exchange Rate of the Peseta

Juan Velarde Fuertes

In 1868 a new currency was created in Spain, the peseta, which would be the base of its monetary system until the country's integration into the Eurozone. In its origins the peseta was linked to the Latin Monetary System. This was formed by France, whose currency was the franc; Italy, with the lira, and a series of neighbouring countries with different currencies, but exactly the same as far as their silver and gold content was concerned. And all these countries applied similar economic policies, as if it were a first European Monetary System. But for trade and investments relations with Great Britain and other countries it was also necessary to take into account the value of the peseta in terms of gold.

After the third, and final, Carlist war⁷² ended in 1876 industrialization accelerated in the country. And with the help of the Spanish territories of America—Cuba and Puerto Rico—and Asia—the Philippine Islands- foreign investment went up in Spain. Growing economic relations with the United States and a certain imitation of Germany's policy forced the question of the exchange rate of the peseta in relation to other currencies to be raised frequently.

Later, the arrival in Spain of capital from Cuba and the Philippines, after Spain lost those territories in 1898, and the advantages that the country obtained from its neutrality in World War I produced an influx of gold and foreign currency, which significantly increased the reserves of the Bank of Spain. Debate then began about the effects of the international value of the peseta in the functioning of the Spanish economy. The measures adopted by minister Cambó on private banking in the early 1920s and the possibility of rediscounting debt securities in the Bank of Spain provided liquidity to the Spanish economy and the country's economy grew at a good pace. If in 1922 the GDP per capita was the equivalent of today's 3,595 euros, the same variable had grown in 1929 to today's 4,436 euros.

But at that time the international economic crisis broke out, which in Spain coincided with a serious political conflict that would lead to the end of the monarchy and the establishment of a republic in 1931. In the international markets there was a sharp fall in the value of the peseta against gold, the pound, and the dollar, one of the causes of which was the high deficit of the public sector. In the economic and political debates of the time, discussions about the economic crisis and the international value of the peseta were mixed, and attempts were made to find a solution to both problems. In 1929 the Minister of Finance, José Calvo Sotelo, commissioned the most prestigious economist of the country, Antonio Flores de Lemus, to chair a committee that would prepare a report on the relevance of the exchange rate of the peseta in the Spanish economy, the result of which was the well-known report on the implementation of the gold standard in Spain.⁷³

A few months later, in 1930, came to Spain J.M. Keynes, accompanied by his wife, the beautiful Russian dancer Lydia Lopokova, who some years earlier had visited the country as a soloist with the famous Russian Ballets. In this trip Keynes talked to another well-known Spanish economist, Luis Olariaga, who was well acquainted with banking and the English financial system from having lived and worked in London for several years; and that had already met Keynes in 1922 at the Genoa Conference, where the situation of the international monetary system after the World War I was discussed. It seems that Olariaga and Keynes discussed the main problems of the Spanish economy. And Olariaga published in the newspaper El Sol an article presenting the views of the British economist on the international crisis and the problem of the exchange rate of the peseta (Baumert & Caro Casana, 2010). Keynes said that, in those initial moments of the crisis, the depreciation of the peseta facilitated Spanish exports and generated a boost to economic growth. For this reason, he believed that it would be a mistake to raise the international value of the peseta. But, if the depreciation of the Spanish currency were so large as to generate inflation, this policy should be changed and the international price of the peseta should be raised, using the gold reserves of the Bank of Spain. Keynes added that selling that gold to raise the international value of the peseta was not like selling some of the magnificent paintings in the Prado Museum, which the country should never part with. An issue, by the way, that arose during the Spanish Civil War of 1936–1939 when some politicians on the Republican side came to think about the possibility of selling paintings by Velázquez, Murillo, or Goya to finance the acquisition of war material abroad.

When the article on Keynes’s views was published there were reactions against his ideas. In El Diario Universal, the newspaper of the Count of Romanones,⁷⁴ it was said: “We already have another Drake here who is coming to steal our gold.” The idea that the peseta should not be devalued was widespread. Manuel Argüelles, Minister of Finance and Economy in 1930 stated that his objective was to raise the international value of the peseta. But the economic situation did not help him. In August 1930, when there was a sharp depreciation of the currency, he assured the king that things would improve quickly. But the data showed the opposite. And eventually he had to resign.

The issue was the subject of national debate. And, according to what Pedro Sáinz Rodríguez—who became Minister of Culture in Franco’s first government—told me, Franco himself, a few years before the start of the civil war, was in favour of devaluing the peseta, arguing that this could increase the income of many people. We know that Franco was a reader of El Sol; but we have no evidence that he read Keynes's statements. It is possible that he did. Years later, when he was already Head of State, Franco published, under a pseudonym, several articles with clearly pro-Keynesian arguments in the newspaper Arriba.

After the end of the civil war in 1939, José Larraz was appointed Minister of Finance. During the war Larraz had been in charge of restoring financial order in the nationalist zone; and one of the policies he adopted was to raise as much as possible the value of the “national” peseta, both against other currencies and against the “republican” peseta. This was not only an economic strategy, but also a military strategy, since it made more difficult for the government of the republican zone to buy war material abroad. As Finance minister, Larraz was also in favour of a high international price of the peseta.

Among the Spanish intellectuals and artists there was a deep division because of the war, some favouring one side and others the other. One of the supporters of the national side was the music composer Manuel de Falla. In 1938 the Institute of Spain was created, which brought together the Royal Academies. And it was decided that, due to his great artistic merits, its first president would be Manuel de Falla. But the composer was not in the country at that time. Because of his extensive international activities, he travelled widely abroad, especially to Latin America; and so he never came to take office.

When I was president of the Institute of Spain, I found a letter from Falla to Larraz, written from Buenos Aires. In it, the composer indicated that he was willing to transfer to Spain a significant amount of money, which he had obtained outside the country thanks to his copyrights, concerts, records, and lectures. But he pointed out that, if the official exchange rate of the peseta were applied, this would imply a substantial reduction in his economic well-being; and for this reason, he asked that the exchange rate applied to his remittances were not the official one, but the world market rate. I was able to see a note from Larraz in which he said that no privileges should be granted to Falla, because every good Spaniard should accept Spanish law. The result was that Falla got angry and never returned to Spain. Only in 1946 his corpse was repatriated.

Years passed and Spain completely changed its monetary policy and unified exchange rates. Over time it joined the euro zone. For this reason, the danger that something similar to what happened to Manuel de Falla could happen to any Spanish artist disappeared. If he had been able to see these reforms, Falla would surely have dedicated some of his works to the great Spanish economist Ullastres and the great international economist Per Jacobsson, who in 1959 managed to erase forever the goal of seeking a high international price for the peseta.⁷⁵