The Foreign Debt of the Argentine Republic

The Foreign Debt of the Argentine Republic

The Foreign Debt of the Argentine Republic

The Foreign Debt of the Argentine Republic

Excerpt

The purpose of this study is to examine the export of capital as related to the finances of the Argentine Republic, in the hope that a limited investigation of a part of the broad field, besides having some intrinsic interest, will add to appreciation of the whole. Although my interest has been primarily in the recent period dominated by the United States money market, I believe that historical perspective must modify an estimate of the present situation.

In 1824, before the establishment of a single Argentine state, the Province of Buenos Aires contracted a loan in London, but defaulted four years later, finally arranging a settlement in 1857. For twenty years following 1861, when a permanent union was formed, provincial borrowing overshadowed that of the national government, which after 1880 played by far the dominant rôle. During the decade from 1880 to 1889, borrowing went on at a tremendous rate, culminating in disaster for both the Argentine and its creditors. Perhaps the most remarkable episode in the nation's financial history was the rapid recovery from the low point of that era.

During the World War, the government's financial needs were at first partly satisfied by American capital; but the relationship was temporary. The flotation of a long term loan was first made in 1924. Thereafter offerings came rapidly, so that nearly three hundred millions were taken by the national government alone. This would not in itself be an excessive debt for so wealthy a nation. Because of weak financial policies, it has only served to encourage the creation of a larger . . .

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