The Argentine Crisis.

Manawatu Herald, Volume III, Issue III, 27 January 1891, Page 2

The Argentine Crisis.

The rise and fall of the Argentine is fully described by Mr Lawson who in June last pnid a vibifc to the River plate. The start in speculation reads like a chapter from the New Zealand of ten years d'goJ He asseits that between 1887 and 1889 everybody in Buenos Ay res went more or less off their head. Land rose rapidly. It was bought on credit and paid for with , niortaage bonds. Under one Apt of Congress, the speculator in land could pioVout blocks, get them fradulently valued, hold a bogus sale, mbdi vide the mortgage over the various lots, mike them over to men of straw, apjl tjieu walk off with the plunder {Bills were kept being renewed by nnerohants, who had to gut the Rnmo treatment from Europe. The l>ubb'e burst by the European supplies c/asin?'. The Free Ban^iu" Act

Mr Lawson, *'a crop of political banks spring up— one in each province ' —which had the right of note issue. Congress created for their convenience a speciiiV'lJohcl bearing four and . half per ejefrt. interest, which they " were to purchase and pay for by inBtaleiitehts. For every dollar of &iich -bonds held they were to have the right to issue a one-dnllnr note. Existing banks were to call in their old notes and replace them with new ones The (hen circulation (1887) was about 80,000,000 dols., and authority was given to increase it by . _J5,0 p<* cent, right off. A hundred f|s&V twenty millions dollar! of a *f | paper ourrency for 4,000,000 of looks a liberal provision, but the Ai'gentin-s soon on "grew it Tho legitimate condition oxj)-»n<ted quickly to 160 000,000 do lan», aiul sti 1 more paper money was tneled to stuve off a collapse of the various booms now in thoir dea'h struggle. It was provided with I hine>e simplicity—by reissuing old notes which had been illegally preserved, instead of being burned — by secretly exceeding the legal maximum issue, and in desperate cases, as at Cordoba by giving valee, or I. 0. IPs when the notes ran out. Where the Argentines have failed as amateur ba kers, properly-qualified men of European experience might aohu-ve a great success With even moderately sound banking, the Argentine crisis might be solved in a year or two. Without them it can only go fr >m bad to worse." No won d that such a system shook even the groat house of Baring Brothers.