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The Argentine Republic.

The Argentine Republic has had for some years what is called m the vernacular a *' glorious time," and it is now going through the saddening but instructive process of paying for the innumerable follies which were committed during that period. A perfect Gulf Stream of riches, has been flowing across the Atlantic from Europe, raising the value of. land, increasing the apparent riches of the people, and tempting the whole community into a carnival of speculation. There are three distinct ways m which foreign money has been introduced into the colony, and all of them have been used to the fullest extent. The CentraLGovernment of the Argentine Federation has to pay nearly three millions every year m interest alone. The provincial governments are plunged m a debt as deep as the River Plate, and private investments from abroad have been large and numerous. Altogether, according to the correspondent of the " London Times," who writes a careful and thoughtful letter on. the aubjeci, the whole indebtedness of the Argentine Republic to Europe amounts at least to £150,000,000, and should probably be* put at a higher figure. The interest on such a silm must be an extremely heavy charge, even to a country which claims that its resources are "boundless." But this interest charge does not represent the full extent of the Argentine difficulties, for the situation has been complicated by the utter recklessness of the financial .system. The banks have been permitted an almost unlimited issue of paper money, and the result of scattering paper dollars broadcast without much regard to the bank reserves, has simply been to inflate the speculation m land to a height which was never dreamt of oven m the few months of the Melbourne land boom. But although values increased and men grew rich on paper, it was necessary to pay the interest, not m paper dollars,, but m gold, and this grew harder and harder as the speculation increased. Then came the collapse, for gold had to be obtained at any price, and the premium upon the precious metal rose a short time ago'to 215 per cent, which means that the unfortunate Argentine had to' pay 215 of the paper dollars, which he had regarded as wealth, m ordor to purchase 100 dollars m gold. The inevitable consequence followed. Speculation ceased, business came to a standstill, employment became scarce, and some of the banks have failed.to pay dividends. For the moment a revolution was feared m Bueiios. Ayres, but a change of Ministry was made, and the people were persuaded that their true interest lay m trusting .to a gradual recovery. The new Minister of Finance has' the reputation of great ability. He has been aided by the fact of an unusually good season for the pastoral and agricultural industries, which form the mainstay of the Republic and also by large immigrations of hard-working and thrifty laborers, who are always adding to the products of the country and increasing its exports. The premium on gold has now fallen to 148 per cent., and, if it can be reduced to 100, the " Times " correspondent declares that the railways will 'pay intorest, and that the position will be fairly sound. In the meantime the Minister of Finance is determined to maintain the credit of the Central Government, and asserts that he is m a position to meet every engagement. If this be the ca»e,relief will gradually come, but the Argentines have had a rough awakening from their dreams, and a hard day's work evidently lies £ before them.— v Australasian. '

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Permanent link to this item

http://paperspast.natlib.govt.nz/newspapers/AG18900807.2.10

Bibliographic details

The Argentine Republic., Ashburton Guardian, Volume VII, Issue 2485, 7 August 1890

Word Count
595

The Argentine Republic. Ashburton Guardian, Volume VII, Issue 2485, 7 August 1890

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