THE PLAZA LIBERTAD, MONTEVIDEO
THE PLAZA LIBERTAD, MONTEVIDEO
At Montevideo, all is done to please and nothing to annoy,so that the throwing of water which was a leading feature of the old-time carnival is now strictly prohibited by authority enforced by the police; as is also the case in Buenos Aires.
Thousands of people cross each year from Buenos Aires for the Montevideo carnival, the whole available fleet of the company which runs luxurious boats between the two cities are pressed into the service of this occasion and become floating hotels; the normal hotel accommodation of Montevideo being insufficient to meet such an influx of visitors during these few days.
By the way, the origin of this fine steamboat service is an interesting example of the progress made by the two countries and the fortunes which have been amassed in them during existing lifetimes.
Before the building of the present dock system of Buenos Aires, one of the boatmen who used to land and embark passengers from or on the ocean-going ships was a man named Nicolas Mihanovich; evidently a very level-headed and at that time at least, a very frugal and saving person indeed.
With his row-boat he gained sufficient to enable him to purchase a sailing vessel which he used for regular traffic to and fro across the broad mouth of the River Plate. So, his enterprise grew; and only a very few years ago he turned his own private company into a public one with larger aims, in which latter company he nevertheless retains a very large interest. The one-time boatman is now a multi-millionaire. The present service leaves Buenos Aires, or Montevideo as the case may be, at about ten o’clock each evening and lands its passengers, after a good sleep in comfortable beds, on the other side at about seven o’clock the following morning.
Many are the true tales of fortunes amassed, sometimes one may almost say won, in Argentina, especially, within living memory.
Señor Santamarina, now deceased, left on his huge estate atTandíl, one of his many properties, the original two-wheeled high cart which was his only fortune when he commenced life as what in other countries would be called a transport rider. This cart is, or till recently was, preserved in a glass house erected specially by him to house and exhibit it to all visitors to the estancia.
Another history is that of a millionaire family whose immediate ancestor certainly won fortune by an astuteness which may or may not be considered commendable.
He rented a large—large even for the Argentina of those roomy days—tract of land from a man who foresaw wealth in tree-planting. The latter was right; but his personal calculations did not, as will be seen, turn out as he had planned. He made it a condition that not less than a certain number of trees should be planted on the land within the period of the lease, and that for every tree above that number planted he should, on the termination of the lease, pay the sum of $1 to the outgoing tenant.
The wily lessee immediately set to work to plant trees as fast as ever he could, and at the expiration of his lease had millions of them, over and above the stipulated number, to show for his pains. The unfortunate lessor could not pay so many million dollars, and to end the affair was glad to let his former lessee have full freehold possession of the land and so call quits.
That land, still in the possession of the original lessee’s family, is worth a huge fortune to-day, and its produce represents a very large income indeed—forestry apart.
And now, as these stories have taken us to Argentina, the reader may as well prepare to follow them by embarking on one of the “Mihanovich” boats; as they still are and probably always will be called, in spite of the longer name of the new company, and find himself in Buenos Aires next morning.
By leaving his baggage for further consideration, as he did at Montevideo, he can go on foot in about five minutes fromthe landing-place across the gardens of thePaseo de Julio, which name is a first reminiscence of the birth of the Republic, round one or the other side of the “Casa Rosada” or pink-coloured Government House, and find himself immediately in the Plaza Victoria with on his right the Stock Exchange lying between the Calles 25 de Mayo and San Martin—further reminiscences of the wars of Liberty. Keeping his back towards the Casa Rosada, he will look straight up the broad Avenida de Mayo with the historic oldCabildoor Town Hall on the left corner of the commencement of the avenue and the fine new Municipality opposite.
At the far end of the avenue rises the splendid edifice of the new Congress Building, the “Palace of Gold” as it is called in quasi-humorous reference to its costliness. This is, however, not a new joke. Formerly it was applied to the Casa Rosada, now become a comparatively humble edifice. Besides, if an Argentine calls one’s attention to the scandalous cost of a public monument or building, it does not necessarily mean that he is really so very angry about it. On the contrary, it may well be that he is proud of belonging to a Nation which can bravely bear such expenditure.
Under the Avenida de Mayo is the “tube” which runs from theOncestation (which is situate on the western side of the town and is the terminus of the Buenos Aires Western Railway) to the Docks. The Once marks the point of departure of the first six miles of Railway built on the River Plate.
The new-comer will at once notice that the City of Buenos Aires is laid out on the chessboard pattern with its streets running North and South and East and West, a variation of the pattern being now introduced by the new diagonal avenues converging towards the Plaza Victoria, in course of construction.
Along almost every street, except Calle Florida, the Avenida de Mayo, and the diagonal avenues, runs a tramline on which the cars all go in one direction in one street and inthe contrary direction in the next and so on. Ten cents is the fare for a single journey anywhere within the length or breadth of the Federal Capital, but one cannot take tickets entitling one to any change of car; and for that one must buy another ten cents ticket.
This matter of change of car may have been overlooked by the Municipality when the concession was granted to the Anglo-Argentine Tramways Company, of which concession the universal 10 cent fare was asine qua noncondition; perhaps, on the other hand, the Company stuck out on that point. Anyhow, if one wishes to get full value for his 10 cents on a Buenos Aires tramline he must stick to the car in which he has begun his ride. By doing so, he can often take a long round trip and come back to his point of departure. This observation also applies to the Tramways in Montevideo, but there, with due knowledge and careful selection, one can practically get all over the place, without changing; owing to the more erratic routes taken by the lines.
For a variety of reasons, the Buenos Aires Tramway system is considered by authorities on such matters to be the best in the world. It is mostly in the hands of the Anglo-Argentine Tramways Company.
Another company is the Lacroze, a private company largely interested also in the Buenos Aires Central Railway. Its trams run through the Capital and to the Western suburban districts.
A third company runs trams out of the Capital to the Southern Suburban districts.
It may here be said that a good supply of taxi-cabs is to be found both in Montevideo and Buenos Aires.
One advantage, suggested by the mention of taxi-cabs, of visiting Montevideo before Buenos Aires, is that that way one feels richer after the journey between the two than one would if the itinerary had been reversed.
THE AVENIDA DE MAYO, BUENOS AIRES
THE AVENIDA DE MAYO, BUENOS AIRES
Living is not cheap in Buenos Aires, but its cost is a reliefafter a sojourn in the Uruguayan Capital; though expense there is again as nothing if one has experienced that of Rio de Janeiro, the dearest place, probably, in the whole world, and the one in which, scenery apart, one gets as little satisfaction for one’s money as anywhere.
In Montevideo one has, it is true, plenty of satisfaction of a quiet, pleasant kind, but those (actually, although founded on a firm gold basis) paper dollars—only four of them and 70 cents worth of mixed change for a British Sovereign—melt quickly into inappreciable small silver and nickel; none of which seems to be worth much, though a 50-cent bit is really worth more than a British florin. For exchange purposes that is; in its native land its purchasing power is strikingly small. After Montevideo, there is some satisfaction about the feel of the bundle of Argentine paper dollars one gets for one’s Uruguayan money. And in Buenos Aires several quite useful things can be got for $1, National (paper) money. Although the purchasing power of this last (its exchange value is 1s. 8¾d.) is not that of one shilling in England.
In neither country does one often see an actual gold coin, in Argentina practically never in ordinary everyday life; most of the gold against which the current paper is issued going, as will be seen in the Chapter on Finance and Commerce, into the “Conversion” strong rooms and staying there.
The passion for amusement must indeed be overpowering in anyone who is not satisfied with what Buenos Aires provides of all kinds in that regard. Two Opera Houses, the older one, stately and comfortable in its interior arrangements, and the new Municipal Opera House, theColonTheatre, gorgeous in velvet and marble; and powdered, gold-mace bearing lackeys to bow one in at its wide portals.
Great is the rivalry between these two houses to secure the best stars and companies; and between them they certainly get the best that Europe can provide. In somecases they have anticipated Europe, notably in the instances of Caruso and Maria Gay, both of whom appeared in Buenos Aires before Europe had even heardofthem. One feature is common to the policy of both Opera Houses, viz., a scale of charges for admission so high that it is impossible for anyone who wishes to be considered somebody not to have his or her box at one or both of them for the season.
After the Opera House comes, in degree of prestige, perhaps, the Odeon Theatre; most frequently devoted to the representation of classic or serious drama. After it come many theatres; the finest among them being the Coliseo in which good companies, chiefly Italian, give first-rate performances of every kind from Grand Guignol to Light Opera. After these, again, come the purely Argentine Theatres; in which drama and comedy faithfully reflecting the true native life are performed.
Such performances should not be missed (as they too often are because they are not fashionable in a country where fashion’s favour is almost exclusively bestowed on imported wares) by anyone having sufficient Argentine Spanish to appreciate the purport and point of their dialogue; which, in true Argentine fashion, includes a liberal use of words and phrases capable of double meanings.
Brilliantly lighted, sumptuously panelled and upholstered cafés with tables spreading over the pavement outside them, tend to keep life in Buenos Aires awake till the wee sma’ hours begin to grow large.
“See Naples and die” runs the Neapolitan saying. “See Buenos Aires and stop there as long as you can” is likely to prove acceptable advice to anyone with a taste for easy gaiety and with a disposition for not doing to-day anything of an irksome or disagreeable nature which can possibly be put off till the morrow. Much native encouragement will be afforded him to postpone it till the Greek Kalends; and then to change his mind about doing it at all.
THE CATHEDRAL AND PLAZA VICTORIA, BUENOS AIRES
THE CATHEDRAL AND PLAZA VICTORIA, BUENOS AIRES
Till the morrow’s sun shines, that is. Then he will see theCity, which overnight he may have thought wholly absorbed by pleasure-seeking, transformed into a quick-moving, alert commercial centre. Surely the Argentine when in Buenos Aires burns his candle at both ends. The well-to-do have, however, their Estancias on which to vary town life with mentally restful, if often physically laborious, days spent in superintending their agricultural interests.
Fine-looking new buildings are ever springing up in Buenos Aires with such surprising suddenness and rapidity as to render any description of the chief edifices of that city out of date almost before it can get into print. Even the palatial home of the Jockey Club, renowned as the most splendidly luxurious Club House in the world, is soon to be abandoned by its members for another more gorgeously wonderful still.
One leaves the City for a few weeks in theCampwondering what the former will look like on one’s return.
That is one did, until very recently. Just now, the War has called a temporary halt in the commencement of many projected building operations.
One cannot, however, leave Buenos Aires without mention of the beautiful, park-like suburb of Palermo; with the broad Avenida de Alvear leading from the northern part of the City to it. It may here be observed that fashion has not travelled westward in Buenos Aires; the Northern parts of the City being the most fashionable and adorned with the most palatial new dwellings.
A wide palm-bordered avenue leads to others winding round grassy spaces in which backwaters of the Tigre River glint under overhanging trees; amid all of which is a great restaurant, after the fashion of those in the Parisian Bois de Boulogne.
That restaurant is, to the author’s mind, the one great tawdry blot on the picture; but it is only fair to add that every afternoon and evening, during a long season, it is crowded with gaily dressed people who all seem happy andvociferously contented with the refreshments and music it provides.
The Palermo Avenue is the fashionable drive, the Corso of the Élite of Buenos Aires Society; and also of others desirous of attracting attention to their equipages and themselves. Everyone the aspirant to social distinction ought—and ought not—to know is to be seen at Palermo on a fine late afternoon or evening in Spring. In Summer most of them are, naturally, at Mar-del-Plata.
Adjoining the Park is the Palermo race-course, over which the Jockey Club rules absolute. It should be added that the Buenos Aires Jockey Club is not only an association of racing men, but is in reality the hub of social intercourse in Buenos Aires.
Its large and small dining-rooms are available to members, and even to very distinguished strangers, for private dinners; which are exquisitely cooked and served by the numerous and highly expert staff of the Club.
In fact the Jockey Club is a very influential body indeed; quite apart from racing matters.
There can be no manner of doubt that the gambling element in racing is far too popular in Buenos Aires. There is a race meeting on every day in the week, Sundays, of course, included, during a season which lasts nearly all the year round. And these meetings are thronged by youths and other people who most certainly should be, and would much better be, at work.
Whatever may be thought of the system of weekly National Lotteries (these are at least carried on with unimpeachable fairness and 10% of the amounts subscribed to them, in payment for tickets, goes, after paying working expenses, printing, etc., to charity) the totalizer appeals far too sympathetically to the Latin-American natural love of gambling; and that love, as always in a new country where so many fortunes seem to have had their origin in luck, has developed dangerously on the right bank of the River Plate.
Close also to Palermo Park is the scene of the annual Agricultural and Live Stock Show; now a world-renowned Exhibition of as fine cattle and sheep as can be seen anywhere. Horses and Poultry also are splendidly represented at this show; which is perhaps the greatest event in the Argentine Calendar.
Further out from the city, past and beyond Palermo, is Hurlingham; an ever-enlarging group of English red-brick villas inhabited for the most part by English people. These villas surround the ample grounds of the Hurlingham Club, where polo and riding and driving competitions, etc., follow the lines of its English prototype. The Club house is comfortable, the food good, and a huge swimming bath is among its many undoubted attractions. It also has a drag hunt.
Further out again are beautiful reaches of the Tigre River, famous for boating; and on which an annual regatta, the Henley of South America, is held.
The Avenida de Alvear, above referred to, runs through the most fashionable residential quarter of Buenos Aires, a quarter filled with veritable huge palaces which with their gardens surround the Recoleta, the fashionable cemetery. A strange city of the dead in which the coffins are seen on shelves contained in small plate-glass fronted temples, so that all may view the last outward casings of generations.
On “The Day of the Dead” (All Saints’ Day) the Recoleta is a blaze of beautiful wreaths and floral tributes; afterwards too often replaced, alas, by ugly contrivances in porcelain or, worse still, enamelled iron.
Returning to Buenos Aires proper one must not, cannot, forgetCalle Florida, “The Bond Street of the South.” So called because in it are situate most of the finest shops in South America for the sale of what are sometimes officially described as articles of luxury; wearing apparel of the best and costliest, for both sexes, jewellery, stationery, etc. It is, in fact, to Buenos Aires all Bond Street once was, and old Bond Street to some extent still is, to London.
Needless, almost, to say, Florida deals exclusively in imported goods and a very great majority of its shopkeepers are foreigners; among whom the purveyors of “Modes,” “Robes” and “Lingerie” are, naturally, mostly French.
No vehicular traffic whatever is now allowed in Calle Florida between certain hours of the afternoon; in order not to incommode the throngs of fashionable shoppers with whom it is usually crowded. It is the only street in which Argentine ladies of high degree are to be seen on foot. In bygone and less crowded times it was the scene of the afternoon Corso; when play was made with fans and gallants ogled from the edges of the pavement.
There is at present still a lack of Hotel accommodation suitable for Europeans of moderate means. There are great numbers of Hotels in Buenos Aires, but the good ones are very expensive while the cheaper ones are not very good. That is to say, one must have got accustomed to the South American haphazard fashion of service and general arrangements before being able to regard the latter as in any way comfortable. Montevideo is still worse off; having few Hotels which can be regarded as good (though there are one or two), while prices, as in everything else, run higher than in Buenos Aires.
A word must be said in defence of the latter City against a prevailing impression, created, goodness knows how, of its intense immorality. This charge simply is not true. Buenos Aires is no more immoral than and certainly not as vicious as are most European Capitals.
True, it is not in South American human nature to be puritanical but the lower classes in Argentina and Uruguay are but non-moral, to use a somewhat fashionable term, with the non-morality of grown-up children, which they are. They have not the faintest idea of the vice which abounds in the great cities of the Northern Hemisphere. Montevideo is more staid than cosmopolitan Buenos Aires; even at Carnival time the former City seems to take its merrymakingseriously. Any real vice which can be found in either Capital is an imported article.
If among the lower classes of both countries the whole advantages of the marriage ceremony seem not to be duly appreciated, this is due, in the vast majority of cases, to motives of economy. A religious marriage service is a costly item in the equipment of a young couple, and a purely civil ceremony is even less favourably looked on by neighbours than a postponement of any ceremony at all. Later, such couples usually do marry with due pomp and circumstance, including the invitation of all and sundry to the humble wedding feast. After that, all is in order in the case of the death of the husband and father; for marriage legitimatizes previously born children. Indeed, the writer was once present at afiestain a rural district, not forty minutes’ run by train from the City of Buenos Aires, organized to honour the occasion of the visit of a Priest who in a very short space of time married the parents and christened a whole batch of their children.
An old custom still chiefly prevailing among the humbler classes, both urban and rural, is one which may be called the “waking” of the dead. The news of a bereavement spreads quickly among neighbours; who do not wait to be invited but arrive, in groups organized extemporaneously by themselves, at the house of mourning. There, one of such groups succeeds another, and so on throughout the night after a death; sitting silently and only moving to partake of the necessary refreshment provided in view of their sure coming.
As in most other countries where modernity has not yet suppressed all local colour with its neutral tints, the lower classes in both Argentina and Uruguay are much the most interesting. The free-and-easy Bohemian sort of life in aconventillo[16]is curious. In each of its many rooms lives a family, while the court is common to all for cooking (acharcoal brazier usually stands at the side of each door), washing of clothes and, last but not least, the discussion ofmateand gossip. All sorts of people dwell in a single conventillo, artisans, hawkers, washerwomen, milliners, factory hands, poor employees, etc. etc., and all group themselves in the common courtyard of an evening when work is done, frequently to the music of a guitar.
The upper classes, on the other hand, strive chiefly to reflect the latest moods of European fashion in general and of that of Paris in particular—even, since the War, to the extent of making retrenchment in living expenses the fashion. A fashion which, if it last, will not be the least of the good which has come to Argentina from the European upheaval which has forced the River Plate countries to learn to rely on their own resources and individual efforts. Gone, already, are the battalions of motor-cars of very latest pattern with which every wealthy Argentine family has hitherto thought it necessary to its dignity to be provided—one each for father, mother and each son and daughter—economy is now “De Moda” and ostentation therefore become old-fashioned and bad taste. An immense change to have taken place, as it did, in the course of only a few months.
Montevideo had no need of such avolte faceof habit. Uruguayans never developed the love of display so characteristic of Argentine aristocracy.
With its some 1½ million inhabitants, Buenos Aires has the largest population of any Capital City in America. Montevideo, with some 400,000 inhabitants, surpasses Washington in this respect.
Owing to their dependence on the Northern Hemisphere for the Capital necessary for the continuance of their development, the River Plate countries, and South American countries generally, are as a barometer, and an extremely sensitive one, in regard to the conditions of the Money markets of the Older World.
Thus already in 1913, the fear of Balkan complications in both Argentina and Uruguay was represented by a general fall in what previously may have been somewhat inflated, or at least too anticipatory, land values.
This fall, coupled with and increased by relatively bad harvests, marked the commencement of rather bad times in both Republics. In this regard it may be well to say that comparatively bad times come easily and swiftly on a country like Argentina, the prosperity of which depends very largely indeed on its cereal production and in which landowners and agriculturists from the largestEstancieroto the smallestChacrerohave long been encouraged by Nature to regard each coming year as inevitably more prosperous than its predecessor. The result of this optimism, usually justified by the event, is that when any set-back, caused, say, by late frosts or early rains, such as farmers in less favoured lands would take as an ordinary risk of their occupation, does occur, the streets of Buenos Aires are immediately filled with men with long faces running to the Banks and anxiously discussing the ruin which, apparently, seems to them to be staring them in the face, notwithstandingthat most of them must often have been through similar “crises” before.
One need only go “on ’Change” to be almost convinced that the whole vaunted prosperity of the Republic is tumbling about its ears. Even newspapers, which, by this time at least, ought to know better, join in the panic cry.
At such times people possessed of Capital and common sense make good investments; the Banks tide everyone else over quite comfortably enough not to interfere with the socially obligatory summer gathering at Mar-del-Plata; the following harvest is a bumper; and all is well again in the best and sunniest of all possible Republics.
That is the usual course of happenings after inferior harvests but, as is easy to imagine, the present situation is as unique in South America as it is in all other parts of the world. On the River Plate, indeed, it was, if one may be permitted the expression, aggravated by anticipation consequent on the (almost miraculous for these countries) following of yet another rainy harvest-time.
On the top of all came August with its declarations of European War, the first result of which in the River Plate Republics was intimate realization of the extent to which they had been dependent on Europe since the commencement of their real commercial development.
They were thrown entirely on their own resources and ability with no chance of any immediate help from outside.
It is to the credit of both Republics that they rose to the situation. Seven days of Bank Holiday were at once proclaimed in Argentina; during which time the Ministry of Finance and other Government departments were loyally assisted by both native and foreign bankers and financiers to devise necessary measures.
In the result Laws were summarily passed by Congress to prevent all exportation of gold; outgoing ships might only take with them sufficient coal to last them till they reachedthe next port in South America(Argentina and Uruguay asyet produce no practically valuable coal, so that they are dependent on import for their stocks of this fuel), and provision was made that cereal exports should be limited to the surplus of such produce after the retention of a liberal allowance for home consumption until the next harvests.
Uruguay adopted similar protective measures.
So far so good, but the Argentine Banks, generally, were faced with the necessity for immediate decision under conditions which, unfortunately, are all too frequently recurrent in rapidly progressing countries. Many of the securities held by them were obviously not worth the value that they had been taken for, in consequence of the previous shrinkage of values above alluded to.
This was a momentous matter for consideration during the seven days’ Bank holiday.
In the result, all Banks adopted the policy of cutting losses even at the risk, amounting to extreme likelihood, of letting their weaker customers drown,[17]while mercy was only extended to those evidently strong enough to keep afloat throughout the crisis and its after effects.
This decision taken, and enforced on the reopening of the Banks, scarcely any credit establishment took any advantage of the Moratorium declared by the Government.
In Uruguay the situation proved easier on account of a comparative absence of the complication of securities based on inflated values. Here again the Uruguayan showed his superiority in the matter of cautiously prudent finance over his more enthusiastically volatile over-river cousin.
This observation notwithstanding, it is now clear that although a severe financial pinch is still felt in both countries, the Argentine and Uruguayan ships of State are both fully trimmed to enable them to ride over bad financial weather,the first shock of which was the most perilous to meet and needed the most prompt and intelligent handling.
In the result neither country will eventually be any worse for the moral effects of having suddenly been left to its own resources.
Meanwhile land, especially, perhaps, in Argentina, offers an opportunity to Capital such as, as has been said elsewhere in these pages, everyone for humanitarian reasons must hope will never occur again.
Given knowledge of just where and what to buy, large fortunes await those with courage and capital to purchase either town lots or agricultural and pastoral land in either Republic; in Argentina preferably for earlier realization.
Once peace is declared, and even before, it needs little imagination to perceive the wealth to be secured by the agricultural and live-stock produce on markets suddenly deprived of much of the usual output of sources of cereal supply as Russia and Canada, through withdrawal of labour for military purposes, and faced with an enormously increased demand for meat and grain caused by the necessary shortage of production over all War-infected areas.
In fact Argentina and Uruguay are likely soon to experience the truth of the proverb, “It’s an ill wind that blows nobody any good,” and they are among the very few countries of the world about the commercial conditions of which, after the war, it is pretty safe to prophesy in the direction of a prompt return, in an enhanced degree, to their normal course of ever-growing prosperity.
Always with the factor of population and consequent sufficiency of agricultural labour being reserved for consideration after the event. A large and very serious reservation which cannot safely be lost sight of by anyone desirous of land speculation in either of the two countries under discussion.
Let the reader pardon this recurrent insistence on this question of population, made in the hope that it may help to open the eyes of the Authorities concerned, especiallyArgentine, to the crying necessity in their country’s interests for practically workable inducements to true colonization, as distinguished from mere partial exploitation of necessitous wage-earners. And the eyes not only of the Authorities, but of everyone having a pecuniary interest of any sort in either Republic, so that their Congresses and landowners may be forced to consider the question in the liberal and enlightened spirit which alone can remove the greatest menace to their country’s economic progress.
If the two Governments and great landowners would only devote one-tenth part of the admirable ingenuity and energy with which they, and the Argentine especially, have very successfully combated locust invasions to the attraction of small-holding proprietary agriculturalists, the River Plate Territories would soon break into an irruption of statues of the originators of such measures which would outrival the vast quantity of those erected to the memories of Generals San Martin, Artígas and Urquíza. (One could travel far in Argentina without discovering a town which does not possess a statue of the first-named deliverer of his country. Uruguay has also many San Martin statues, but runs preferably, as is natural, to Urquíza and, lately, in consequence of the whitewashing efforts of modern historians, Artígas.)
In view of the actual situation, financial and commercial statistics relating to the ante-war era necessarily seem to savour mustily of the back-number. This savour is, however, more due to imagination than to actual fact, since such statistics are just as interesting as ever they were and really show the normal trend of things economic to be resumed and likely to be followed in even a more favourable course, as far at least as Export is concerned. As for the Import of manufactured goods an attempt to deal with some of the probabilities or possibilities of this question in its future aspects is made later in this chapter.
The “Caja de Conversión” (A term for which “Conversion Chest” is the usual clumsy translation, though “Conversion Box” stands as a triumph of the translator’s art. Perhaps “Conversion Office” sounds best, though it does not convey a true idea of vaults filled with sacks of golden coin and therefore “Conversion Bank” is here preferred) is an Argentine Government Institution under the control of the National Ministry of Finance created for the purpose of dealing with the issue, exchange, and conversion of the currency of the country. It issues the paper currency and must hold in reserve sufficient gold to meet the circulating paper money; it also mints the nickel and copper coinage of the country.
Under the Conversion Law a fixed ratio was assigned as between gold and paper. A paper dollar, instead of being theoretically equivalent in value to a gold dollar, was declared to be worth only 44 cents gold; thus with 44 cents gold as the fixed equivalent of one dollar paper and, conversely, 2·27 paper dollars that of one dollar gold, and the smallest gold coin minted the equivalent of 2½ dollars gold, the use of paper in all the odd amounts of everyday transactions is inevitable and consequently the major portion of the gold which reaches the country is forced by the public need of the more convenient currency into the “Caja de Conversión.”
The accumulation of gold in the “Caja” on December 31st, 1915, was well over 61 millions sterling, and it must be noted that these accumulations cannot leave the “Caja” under any consideration (unless by special sanction of Congress), except in exchange for paper currency, until the time when the currency shall be placed on a logically complete metallic basis. The provisions of the Conversion Law in this regard are exceptionally stringent; under them every official of the “Caja,” from the highest to the lowest,is personally responsible for their observance, and they cannot be overruled by any power in the land. So, until Congress approves what is commonly referred to as the conversion, the store of gold in the “Caja” will continue practically intact and will increase.
The misuse of this term “Conversion” has given rise to much confusion of ideas, even in Argentina. The actual conversion took place with the above-mentioned assignment of the fixed ratio of value between gold and paper.
It is obvious that the present is not the moment for the change in the form of the currency, but it should be added that apart from the immediate effects of the war the time for that change has not yet arrived. Irresponsible projects for the change have been put forward from time to time during recent years, but official declarations in that regard have never yet gone further than complacent platitudes to the effect that the time for it was fast approaching; without, however, the faintest indications of any schemes for carrying the change out in practice. Besides, under the Law it cannot be accomplished until a fund or deposit in the Bank of the Nation, and to which the National Government makes contributions out of revenue, has reached the amount necessary to form a reserve against the paper currency in circulation prior to the passing of the Conversion Law. For a long while past, the amount of that fund stood at six millions sterling, but this amount (then still insufficient for such reserve) became reduced in August last to two millions sterling in consequence of special financial measures adopted by the Argentine Government at the outbreak of the war and referred to more fully in the chapter on “The War.”
On the 31st of December, 1914, the Argentine Government held gold accumulations to the value in round figures of 63 millions sterling, of which, as has been seen, 2 millions pertain to the Conversion Fund at the Bank of the Nation. This fund must not be confused with the amounts in the “Caja,” the uses of the former (apart from its constituting, ashas been said, a reserve against the paper currency in circulation previously to the passing of the Conversion Law) being limited to the purposes of foreign exchange, the benefit of the Fund itself and to aid the control of the market; while the accumulations in the “Caja” can only, in normal circumstances, leave it in exchange for paper currency.
Besides the actual gold in the “Caja” this Institution held at the end of 1915 gold and bonds to the value of over 14 millions sterling which had been deposited at the various Argentine Legations. These deposits have naturally increased largely since. Besides all this the Bank of the Nation, the Bank of the Province of Buenos Aires and the private banks held large amounts of gold.
Uruguay has not introduced, and has always resisted the temptation to introduce, any such complications of her currency; which is on a thorough gold basis.
The Argentine Conversion Law was passed in 1899 and abrogated in 1901-2 by Congress (in consequence of the anticipation of possible war with Chile, over the frontier question, the payment by the Nation of Provincial debts and the closing of Argentine ports because of an outbreak of bubonic plague).
Therefore the present solid financial status of the Argentine Republic dates from only twelve, or, on the most liberal reckoning, fifteen years ago.
Uruguay’s first surplus (of $453,110) accrued in 1905-6; though an increased surplus has figured in each Uruguayan National Budget since that date.
Is controlled by the Conversion law, above referred to, which fixed a ratio between the value of the paper and gold currencies and made these interchangeable at that ratio until the time should be judged to have arrived for the substitution of metallic coinage for paper.
The law was passed as the only available though drastic remedy for the state of financial chaos, nothing less, in which Argentina found herself for some years after the crisis of 1891. For the coming of this chaos Argentines blame the European Bankers who, at least, looked on whilst the country floundered into it. For this view they have considerable reason. The Bankers were men of great experience in Finance; of which the Argentines of that day had little or none. Argentina relied on the men who had taken her Finances in hand for the development of her vast natural resources. She awoke to find herself in a financial condition which would have spelt a century of ruin to any less nature-favoured land. And it was an Argentine, Señor Ricardo Pillado, now Director-General of the Division of Commerce and Industry in the Ministry of Agriculture, who devised the Law which, though it in effect involved a partial repudiation of the country’s liabilities, at any rate made possible the financial renaissance on which her present great prosperity was founded.
As has been seen, the Conversion Law said that a paper dollar should be equivalent to 44 cents gold and that conversely a gold dollar should be worth 2·27 paper dollars. This ratio was supposed to have been fixed by taking the average ratio of value between paper and gold over a certain period immediately prior to the passing of the Law.
This basis is now believed to have been fictitious, it being found that, had such an average of values been struck, a paper dollar would have become the equivalent to something much more like 60 cents gold. So that in fact a repudiationof 40 cents liability on every paper dollar in circulation was made to become one of 56 cents.
That, however, is past history; and the existing Law appears likely to remain in operation for an indefinite time to come.
It has its inconveniences. Institutions and traders are obliged by Law to keep their books in both currencies. There is no gold coin available as an equivalent to 1 paper dollar. One needs to have a clear 50 dollars’ worth of notes before one can get gold out of the Conversion Bank; so that all transactions involving odd amounts must be carried through with the aid of paper. In point of fact gold is only seen in the course of important transactions. Still, the gold is there, in the country, in the Conversion Bank; and cannot be withdrawn from the coffers of that Institution except as against paper dollars, nor can paper dollars be issued except as against gold actually in the Conversion Bank. For the absolutely strict observance of these rules everyone concerned, from the President of the Republic down to the humblest employee of the Caja is personally responsible under the law. By the operation of the law the Republic holds a usually ever-increasing stock of gold; the accumulation of which is aided by the inconvenience for practical exchange of the figures ·44 and 2·27.
There is no doubt but that the object which the framers of the Conversion Law originally had in view, the rehabilitation of the country’s Finance and credit, has been fulfilled long ago; and it is for other reasons that Foreign Capitalists and Banks, to whom Argentina must still look for the means of her fuller development, prefer to let the dual monetary system, with its several practical inconveniences, continue instead of encouraging Congress to declare the purpose of the Law fulfilled, by which declaration it would, by its terms, lapseipso facto. On that happening there would be a period, momentary only, in all probability, but still a period, during which the coffers of the Conversion Bank would be openthrough the automatic lapse of the Law of its creation. And Capitalists and Bankers, grown very prudent indeed in their generation, prefer that those coffers should remain closed and safeguarded as they are; even at the cost of some few extra clerks to cope with a system which otherwise works very satisfactorily.
Shin-plasters, as the paper dollars are called by Anglo-Argentines, fulfil all the purposes of daily life as well as would silver or other metallic tokens. Paper dollars, guaranteed by gold, have also other advantages over a metal coinage which might not be so fully guaranteed.
Therefore the Conversion Law remains a live letter on the Argentine Statute Book.
It is, however, a vulgar error to refer to the time when other tokens might be substituted for paper as the time for “Conversion.” Conversion really took place with the coming into operation of the law which converted a fluctuating ratio into a fixed one.
The speculation in gold, referred to elsewhere, which had attained disastrous dimensions just prior to the passing of the Law, was another evil to which that Law put an end. Then as now all everyday transactions were carried out in paper; but, then, no man could tell from hour to hour what the paper he held was worth. Everyone was by force of circumstances practically a gambler whether he wished to be one or not. The paper tokens for which he had sold his wares one day might be worth much more or less the next. Everyone had to make his own forecast of probabilities before he could make or give a price for anything; and therefore became a constant speculator, a gambler in futures, in fact. The bad moral effects of such a state of things is obvious. Many other financial evils were rife at this time, which now have only historic interest, among them may be mentioned the Banks of Issue for which authority appears practically to have been given by the State to anyone able to procure and furnish offices. Stacks of the notes of these preciousInstitutions still occupy space as curious lumber somewhere in the cellars and garrets of Government House. Valueless and best forgotten by a prosperous and enlightened nation which no longer needs any such awful examples to deter it from lapse into irregular finance.
Uruguay has a gold, silver and nickel coinage, but, as in Argentina, notes are the most common tokens, especially for amounts of $1 and upwards. As will have been understood, Uruguay has no Caja de Conversión, her currency being and always having been on a direct gold basis.
One of the immediately world-wide effects of the great War has been the practically total elimination of German trade competition, an elimination which may not unreasonably be calculated to last for some time to come.
This therefore is the golden opportunity for other competitors to capture the large bulk of export trade which had gradually been absorbed and was in course of constantly increasing absorption in the countries under discussion by German firms.
Many Consular Reports and publications of the “Bureau of American Republics” have respectively dealt with the consequent loss of trade to Great Britain and the comparatively slow advance in that respect made by the United States and these documents have insistently pointed out the whys and wherefores of German commercial success over their chief rivals.
The writer cannot therefore lay claim to originality in the present observations, but does claim that his persistence in the reiteration of what he, and many greater than he, have continually urged on every possible occasion during the past decade has been and is in what appears to him to be the best interests of those most concerned.
Of the two nations the British still has the better opportunity to extend its commerce in both Argentina andUruguay. The reasons (apart from the actual kaleidoscopic financial and industrial situation) for this opinion are that the English (as all people hailing from the British Isles are commonly called in South America) have already acquired in both countries a firm reputation for straightforward dealing, founded on many years’ experience and untainted by any suspicion of underlying political motives, whereas the South American Republics generally harbour a latent but constant resentment of what they rightly or wrongly consider to be the tendency of the United States to assume a dominating influence over both Americas. In fact to construe the Monroe doctrine as meaning, to cite the catch-phrase which to the innermost South American mind embodies something very closely resembling an unpleasant truth, “America for theNorthAmericans.”
Therefore, pushing United States’ commerce is immediately met by a seemingly dull indifference to the merits of the wares it offers, praise it those wares never so loudly. And this observation suggests another of almost equal truth and importance, viz. that the loud and strenuous vaunting of an article and thehustlingmethods so much admired in the great Republic of the North are worse than useless in Spanish South America. “Why so much talk and so much hurry to strike a bargain if the thing is really good?” is the mental attitude of the average Spanish American towards the vociferous North American traveller who usually makes the further mistake of appearing to wish to teach his listener the latter’s own business. This, as has been said elsewhere in these pages, is a thing no Argentine or Uruguayan will stand. No one is a more severe critic of himself, his methods and Institutions, no one is most enamoured of progress and improvement than he. Buthemust be the discoverer and chooser of the remedies for his own defects,heand he alone must be the arbiter of his own destinies and set his own house in order. In such matters he will brook no interference. And least of all from the United States.
It is surprising that the commercial ability of the latter country should not long ago have discovered and acted in harmony with this feature of South American psychology. It seems, however, to have escaped appreciation by “Yankee” cuteness.
Accordingly, we find, in the present writer’s opinion, two existing obstacles (apart, as has been indicated above, from the present financial situation) to the extension of the trade of the United States in Argentina and Uruguay. One of these, the inappropriate method of approach usually pursued by travellers and the other a strong and jealous suspicion of the ulterior motives of the United States in endeavouring to strengthen her commercial foothold in the Southern Hemisphere. The first of these obstacles should be easily removable, unless, indeed, it be too firmly rooted in the North American mentality. The second is a matter for extremely delicate state diplomacy, and equally delicate behaviour of the United States’ delegates at each future “Congress of American Republics.”
Having thus glanced at seemingly obvious defects in United States methods we may turn to those of British manufacturers.
In their regard one can scarcely restrain the question, “Do they really want the South American trade at all?” Because, if they do, they set about getting it in the strangest possible ways. Their apparent attitude can be summed up by saying that they point-blank refuse to give a customer what he thinks he wants unless his ideas on that subject entirely coincide with what they think is best for themselves and, incidentally, it would seem, for him.
South American governments insist on the metrical system of weights and measures for Customs purposes: the British manufacturer persists in a firm refusal to contemplate anything but British Tons and Feet. This may seem a trifling matter to anyone not engaged in the Import trade of a metrical-system country, but in practice the renderingof British weights and measures into their metrical equivalents involves not only a large amount of clerical labour, but is also a frequent source of error in the results.
A most actively patriotic Briton who is the head of a large Importing firm in Montevideo told the present writer not long ago that in spite of his patriotism he had been driven to deal with German firms because, for one reason, of the constant inflictions on him of $80 fines by the Customs Authorities, that sum being the statutory fine in Uruguay for any misstatement of weight or bulk on a declaration.
He, in common with the generality of Importers in Argentina or Uruguay, had found himself confronted by several very weighty reasons for necessarily transferring the bulk of his orders from British to German firms, the chief of which was that above summed up; namely, that British manufacturers would not adapt themselves to his customers’ requirements.
“We are making this, that, or the other pattern” of whatever the article in question may be, and “if you don’t like that you must go elsewhere” is the gist of the average British manufacturer’s last word in the discussion. And, as the Importer is not running a Commercial Museum of articles of the highest quality or best British taste, but has to sell what he imports to customers who have lamentably independent ideas of what they want, he does go elsewhere, that is to say he did, and, most frequently, to Germany. To Germany, where most things were at all events cheaper, and where, if qualities were not so good as in the United Kingdom, manufacturers were adaptable, and their travelling representatives spoke Spanish and understood the ways and wishes and even the foibles of South American customers.
As a rule, commercial travellers from either Great Britain or the United States do not speak anything like fluent Spanish. Therefore, they are obliged to engage interpreters to accompany them on their business calls, while they were quite unable to take advantage of the opportunities soughtfor by their Spanish-speaking German competitors of mingling in the semi-social life of their customers. In the bar or restaurant the German traveller was a jolly good fellow always ready to pay his share of the wine bill and with his pockets filled with more than passable cigars and he could enjoy and respond to the local humour and generally take part in all the fun of a jovial evening-out; for which the Argentine, especially, is always ready and willing to find an excuse.
Now, doing persuasive business through an interpreter is by no means an invariably satisfactory proceeding, because the interpreter’s own mentality inevitably intervenes and unconsciously colours both sides of the argument with tinges of his own individuality. He says whathethinks you wish to say, and often enough replies with the best rendering he can make, not always an entirely accurate one, of what he conceives to be the meaning of the other party to the discussion. As for the evening-out! One has only to imagine the effects of a laborious translation of always very allusive wit; the point of which in Argentina most frequently hinges on double-meaning.
The German studied the language, and, as far as he could, the tastes and ways of the people of the country he intended visiting before he set out on his commercial travels.
Travellers of other nationalities should do likewise if they wish to secure a substantial share of the trade now left open to their bidding.[18]
And British manufacturers, if so be that (I repeat the question) they do want the South American markets for their goods, must make up their minds to suit the requirements of those markets whatever may be their own private opinion of South American tastes and ways. They must still remember that although German competition has ceased and may continue non-existent for even a very long time to come, and while Belgium is, for the time being, hopelessly crippled, thereareother nations who desire to rise, and may succeedin rising, to an occasion which, for the awful cause of it, one can only hope will never occur again.
It is a truly great opportunity for both British and United States Commerce, in which, as has been pointed out, the former has a very considerable start in the political and commercial sympathies and prejudices of South Americans. Nothing which British manufacturers cannot remedy appears to exist to prevent them from taking extremely profitable advantage of that start, not only for the recovery of lost ground, but for grasping a very large share of new openings. Will they? Do they really care enough about extending their businesses to do so?
That is the only question, and it is one which they alone can, and soon, we hope, must answer; one way or the other. If they do not want new business or wish that old business should come back to them, there is no more to be said. And no more grumbling to be indulged in about the proportionate falling back of British trade in South America.
It may be objected that the United States, the full manufacturing activities of which remain unimpaired by the withdrawal of labour for military purposes and the output of which is not absorbed to so great an extent as it is with us for war material, have for that reason already a great start of Great Britain in all foreign markets. To this objection I would reply that the time for the struggle for the Argentine and Uruguayan markets is hardly yet; because climatic accident still recently produced results which, coupled with the falling on them of the shadow of the Great Terror, suspended their purchasing power. Two very lean years of cereal production due to weather, the occurrence of two consecutive seasons of which is without parallel in these countries’ history, were followed by another perilously rainy harvest time complicated by shortage of harvest labour due to war risks, and imagined risks, of the transport of the usual army of Italian harvesters who (like theGolondrinas—swallows—after which they are nicknamed in SouthAmerica) annually go to Argentina and Uruguay[19]and return to Italy after the harvest has been got in. These causes temporarily paralysed Argentine and Uruguayan commercial activity by, as has been said, suspending the purchasing powers of both.
But with the productive recovery[20]of these countries with their enormous natural endowments and producing as they do all the foodstuffs that the populations of poor war-trampled Europe need most, what a call for all kinds of agricultural machinery will come from them in return for their meat and cereals and in order that more and more land may be laid under contribution for the production of these primarily necessary supplies! Failing other labour sources, an augmented stream of Italian “swallow” and permanent emigration will set out for the River Plate, wealth will develop on both shores of that river, and with wealth the demand for all the manufactured things to the desire for which wealth gives rise. Hardware, cutlery, cotton and woollen cloths, electrical appliances and material; the host of things which Britain makes and Germany once sold will come into increasing demand in South America with the spring of the new era on which the whole civilized world will enter when the blackness of devastation shall have passed and the evil which created it be rendered powerless for further ruinous crime.
Would that the millions of able-bodied men murdered by this war could have been utilized instead as an agricultural expeditionary force on the shores of the River Plate! They and their children and the world would have been the richer for their labour carried out under conditions as happy as their present, and for many (alas!) past, task is terrible. They would have supplied that in which Argentina and Uruguay are lacking, namely, the human element, for thedevelopment of their natural resources. Countries in which vast areas of land yet await the plough for cereal cultivation and the improvement of their natural rough pasturage and other vast areas of rich alluvial soil need only irrigation to turn them into a terrestrial paradise.
Capital never is and never will be wanting for good investment, but the fund of human labour cannot be drawn upon by a mere signature. And the daily waste of thousands of lives for the full activity of which there is ample room and urgent need on behalf of the millions remaining is, sentiment apart and from a commercial point of view alone, the saddest thing in War.
Europe needs bread and meat not only to fulfil her normal needs but also to replace her own interrupted production of these prime necessities of life. The River Plate countries can produce both in practically unlimited quantities; provided only that they can obtain the necessary labour a ghastly wastage of which is going on daily in Europe, some parts of which are consequently threatened with famine.
Surely if civilization be anything but a mere theoretic expression there will never be another great war!
With this pious hope we may pass to a more concrete subject, namely, commercial credit on both sides of the River Plate.
As has been indicated in another chapter, Uruguay enjoys a more literally creditable reputation than her bigger sister. The causes of this have also been already dealt with.
In practice one can but advise anyone approached by firms in either country to do what it may be taken that any ordinarily prudent man of business would do, viz. to make due enquiry as to his proposed new customer. His means of doing this are really even better than if the latter were established in London or New York, since the commercial community in either Argentina or Uruguay is comparatively small and consequently, to use a current phrase, almost everyone there knows everyone else and a good deal about him and his business.
Several of the chief banks in Buenos Aires and Montevideo have their head offices in London and all have branches or accredited correspondents in the principal European and North American capitals and commercial centres.[21]
The wholesale importing houses in Argentina and Uruguay usually give ninety days’ acceptances for imported goods and in their turn give six months’ credit to their retail customers. This arrangement has now the sanction of long usage based on its practically being a division of the burden of credit given to the storekeeper by the Importer between the latter and the Exporter.
The system of banking in both Argentina and Uruguay differs little from that obtaining in England except for a certain amount of good single-name paper being taken on account of the usually intimate acquaintance with the business and standing of all leading firms possessed by the commercial community generally.
Rents and working expenses, including special traders’ taxes, in the Capitals of both Republics are high, but the scale of profits when calculated on anything like a reasonable turnover will in most cases be found to leave a balance in favour of both wholesale and retail traders which would be regarded as highly satisfactory by their European and North American brethren. In fact, it may fairly be said that if a man in either country does any appreciable bulk of business in any branch of commerce or trade he is doing what elsewhere would be considered as very good business indeed. When rumour assigns shakiness to any established firm it may be taken as certain that such rumour is founded on tales of speculation outside the lines on which that firm’s true business has been built up. There seems a temptation inherent in new countries for men who have earned money in businesses they understand to risk it in other speculations of which they have next door to no experience. This is, ofcourse, a phase of the “get rich quick” fever which frequently attacks the young inheritors of stable businesses which seem to them too slow and sure to be interesting or indeed to require much looking after.
At one time the Buenos Aires Stock Exchange was responsible for a large number of victims among all classes of the public, but of late years the public has fought very shy of it indeed; so shy in fact as now to be practically unrepresented in the share ring of that Institution. As a consequence of this abstention the few brokers and professional speculators who daily do what courtesy perhaps demands that one should call business there suggests the tale of the island the inhabitants of which lived simply by taking in each other’s washing.
Joking apart, however, the share ring in the Buenos Aires Temple of Mammon were best avoided by the uninitiate. In this ring there is always one, sometimes two (its strength does not run to more), media of pure speculation in course of manipulation by one speculative group or another. The names or nature of these media do not really seem to matter. They vary. Sometimes they may be the shares of the Dock Company of an inchoate Port, sometimes those of an Industrial Company with vague expectations. Indeed, vagueness which may be tinged by rumour and imagination with a hue dimly resembling that of impending rich surprise is almost essential to the initiation of this kind of gamble.
The shares are bulled out of all proportion to their even possible value for a little while and then no more is heard of them; and other very similar ones reign in their stead in the sensational place on the blackboard, on which all bargains during each day are chalked up as they are called out by the parties making them.
The end of these really stillborn booms is mystery. Who are the unfortunate last in? Strangers, doubtless, when there are any. But if there be none, as is the case more frequently than not? One hears vague talk of Paris and other European capitals and then silence for ever more.
Anyhow, the stranger, for whom this book is chiefly written, would, if he took a hand in any one of these games, soon find out that though he might see the price of the shares he had purchased mounting gaily up on the blackboard like mercury in the tropics he could never realize to any appreciable extent. Did he start to sell, then all the weak little bulls of whom his co-speculators would be composed, people to whom ten dollars a day one way or the other makes all the difference in their domestic budget, would rush to sell also out of sheer fright, and down would go the market on him like a guillotine. At the finish he would be left with a very large proportion of his probably not over-valuable holding; of which he would have little further news than notices regarding proposed reconstruction schemes, etc.
It must not, however, be imagined that the Buenos Aires Stock Exchange is by any means exclusively devoted to such work as that just indicated. On the contrary, many Bank and Industrial shares are also quoted and the other, the Securities, ring is just as genuinely serious as the gambling part of the share ring is meretricious. The chief securities dealt in in the former are the Bonds of the NationalCedulas, as “gilt edged” a security as could well be wished for.
These Cedulas are Bonds issued by the National Hypothecary Bank, an Institution of the National Government, as against mortgages of freehold property in the Republic; the method of their issue being, shortly, as follows.
An intending Mortgagor lodges a proposal with the Bank; on which his title is examined and the property offered valued by Government experts appointed for each purpose.
The result of the examination of title being satisfactory, the Bank states the amount for which on its valuation, fixed after leaving ample margin for possible depreciation, it will accept the mortgage.
But the Bank has no cash funds, and therefore issuesBonds, carrying interest at 6%, and subject to annual amortization, for the amount agreed to be granted to the Mortgagor. The latter, if he require cash, as is usually the case (most of such borrowings being actually effected with the objects for which the Bank was founded, viz. improvements of the property mortgaged, extension of holding, or purchase of stock and implements), must take his bonds to the Stock Exchange for sale. For them there is always a free and open market, the price obtainable usually varying only according to ordinary accidents of supply and demand.
Many brokers hold standing orders for these Bonds, at a price, for Europe (before the War Antwerp was always a buyer at a certain level). The only really appreciable downward fluctuations of this security are of very short duration, an hour or two at most, and are due to what can only be condemned as the inconsiderate action of the Directors of the Hypothecary Bank. That is to say, the Bank’s acceptances of Mortgages are sometimes allowed to accumulate and then, all of a sudden, the Directors seem to get to work and sign and issue huge batches of Bonds. Not only do most of these find their way to the Stock Exchange, in consequence of anticipatory orders lodged with brokers by absent or upcountry mortgagors, but many such people leave selling orders with the Bank itself.
The result of all this frequently is that one fine morning or afternoon cartloads of these Bonds arrive on the Stock Exchange and flood the market, in spite of all the market can do with the best intention of sustaining prices.
Soon, however, the mass is absorbed by the home and foreign demand, and the little crisis which could never have occurred except through the bad management above described, is over and normal prices rule again.
All this relates to the current issues of these Bonds, the “Cedula Argentina” as they are now called.
Formerly they were issued in series, each of which was distinguished by an alphabetical letter. The last of theselettered series was “L.” This system of series had inconveniences, inasmuch as the regulations under which they were issued prescribed redemption in Bonds of the same series, which interfered with entirely free dealing; some of the earlier series being now only obtainable at a high premium on account of the buyer’s need of them to make up a parcel.