Chapter IV: Front Matter (4)

_Communications._--The development of railways in Argentina, which
dates from 1857 when the construction of the Buenos Aires Western was
begun, was at first slow and hesitating, but after 1880 it went
forward rapidly. Official corruption and speculation have led to some
unsound ventures, but in the great majority of cases the lines
constructed have been beneficial and productive. The principal centres
of the system are Buenos Aires, Rosario and Bahia Blanca, with La
Plata as a secondary centre to the former, and from these the lines
radiate westward and northward. The creation of a commercial port at
Bahia Blanca and the development of the territories of La Pampa, Rio
Negro and Neuquen, have given an impetus to railway construction in
that region, and new lines are being extended toward the promising
districts among the Andean foothills. Beginning with 6 m. in 1857, the
railway mileage of the republic increased to 1563 m. in 1880, 5865 m.
in 1890, 7752 m. in 1891, 10,304 m. in 1901, and 12,274 m. in 1906,
with 1794 m. under construction. The greater development of railway
construction between 1885 and 1891 was due, principally, to the
dubious concessions of interest guarantees by the Celman
administration, and also to the fever of speculation. Some of these
lines resulted disastrously. The Transandine line, designed to open
railway communication between Buenos Aires and Valparaiso, was so far
completed early in 1909 that on the Argentine side only the summit
tunnel, 2 m. 127 yds. long, remained to be finished. The piercing was
completed in Nov. 1909, but in the meantime passengers were conveyed
by road over the pass. The gauge is broken at Mendoza, the Buenos
Aires and Pacific having a gauge of 5 ft. 6 in. and the Transandine of
one metre.

Tramway lines, which date from 1870, are to be found in all important
towns. Those of Buenos Aires, Rosario and La Plata are owned by public
companies. According to the census returns of 1895, the total mileage
was 496 m., representing a capital expenditure of $84,044,581 paper.
Electric traction was first used in Buenos Aires in 1897, since when
nearly all the lines of that city have been reconstructed to meet its
requirements, and subways are contemplated to relieve the congested
street traffic of the central districts; the companies contribute 6%
of their gross receipts to the municipality, besides paying $50 per
annum per square on each single track in paved streets, 5 per thousand
on the value of their property, and 33% of the cost of street repaving
and renewals.

The telegraph lines of Argentina are subject to the national telegraph
law of 1875, the international telegraph conventions, and special
conventions with Brazil and Uruguay. In 1902 the total length of wires
strung was 28,125 m.; in 1906 it had been increased to 34,080 m. The
national lines extend from Buenos Aires north to La Quiaca on the
Bolivian frontier (1180 m.), and south to Cape Virgenes (1926 m.), at
the entrance to the Straits of Magellan. Telegraphic communication
with Europe is effected by cables laid along the Uruguayan and
Brazilian coasts, and by the Brazilian land lines to connect with
transatlantic cables from Pernambuco. Communication with the United
States is effected by land lines to Valparaiso, and thence by a cable
along the west coast. The service is governed by the international
telegraph regulations, but is subject to local inspection and
interruption in times of political disorder.

The postal and telegraph services are administered by the national
government, and are under the immediate supervision of the minister of
the interior. Argentina has been a member of the Postal Union since
1878. Owing to the great distances which must be covered, and also to
the defective means of communication in sparsely settled districts,
the costs of the postal service in Argentina are unavoidably high in
relation to the receipts.

_Shipping._--Although Argentina has an extensive coast-line, and one
of the great fluvial systems of the world, the tonnage of steamers and
sailing vessels flying her flag is comparatively small. In 1898 the
list comprised only 1416 sailing vessels of all classes, from 10 tons
up, with a total tonnage of 118,894 tons, and 222 steamships, of
36,323 tons. There has been but slight improvement since that date.
There are excellent fishing grounds on the coast, but they have had no
appreciable influence in developing a commerical marine. The
steamships under the national flag are almost wholly engaged in the
traffic between Buenos Aires and Montevideo, the river traffic, and
port services.

Live stock, &c.

_Agriculture._--In 1878 the production of wheat was insufficient for
home consumption, the amount of Indian corn grown barely covered local
necessities, and the only market for live stock was in the
slaughtering establishments, where the meat was cut into strips and
cured, making the so-called "jerked beef" for the Brazilian and Cuban
markets. But three years later a new economic development began. In
1881 President Roca offered for public purchase by auction the lands
in the south-west of the province of Buenos Aires, the Pampa Central,
and the Neuquen district, these lands having been rendered habitable
after the campaign of 1878 against the Indians. The upset (reserve)
price was L80 sterling per square league of 6669 acres, and, as the
lands were quickly sold, an expansion of the pastoral industry
immediately ensued. The demand for animals for stock-breeding purposes
sent up prices, and this acted as a stimulus to other branches of
trade, so that, as peace under the Roca regime seemed assured, a
steady flow of immigration from Italy set in. The development of the
pastoral industry of Argentina from that time to the end of the
century was remarkable. In 1878 the number of cattle was 12,000,000;
of sheep, 65,000,000; and of horses, 4,000,000; in 1899 the numbers
were--cattle, 25,000,000; sheep, 89,000,000; and horses, about
4,500,000. Originally the cattle were nearly all of the long-horned
Spanish breed and of little value for their meat, except to the
saladero establishments. Gradually Durham, Shorthorn, Hereford and
other stock were introduced to improve the native breeds, with results
so satisfactory that now herds of three-quarters-bred cattle are to be
found in all parts of the country. Holstein, Jersey and other
well-known dairy breeds were imported for the new industries of
butter- and cheese-making. Not only has the breed of cattle been
improved, but the system of grazing has completely altered. Vast areas
of land have been ploughed and sown with lucerne (alfalfa);
magnificent permanent pasturage has been created where there were
coarse and hard grasses in former days, and Argentina has been able to
add baled hay to her list of exports. In 1889 the first shipment of
Argentine cattle, consisting altogether of 1930 steers, was sent to
England. The results of these first experiments were not encouraging,
owing mainly to the poor class of animals, but the exporters
persevered, and the business steadily grew in value and importance,
until in 1898 the number of live cattle shipped was 359,296, which
then decreased to 119,189 in 1901, because of the foot-and-mouth
disease. In 1906 the export of live stock was prohibited for that
reason. Large quantities of frozen and preserved meat are exported,
profitable prices being realized. Dairy-farming is making rapid
strides, and the development of sheep-farming has been remarkable. In
1878, 65,000,000 sheep yielded 230,000,000 Ib weight of wool, or an
average per sheep of, about 3-1/2 lb. In the season of 1899-1900 the
wool exports weighed 420,000,000 Ib, and averaged more than 5 lb. per
sheep. The extra weight of fleece was owing to the large importation
of better breeds. The export, moreover, of live sheep and of frozen
mutton to Europe has become an important factor in the trade of
Argentina. In 1892 the number of live sheep shipped for foreign ports
was 40,000; in 1898 the export reached a total of 577,813, which in
1901 fell off to 25,746. In 1892 the frozen mutton exported was 25,500
tons, and this had increased in 1901 to 63,013 tons.

Crops.

The advance made in agricultural industry also is of very great
importance. In 1872 the cultivated area was about 1,430,000 acres; in
1895, 12,083,000 acres; in 1901, 17,465,973 acres. In 1899 the wheat
exports exceeded 50,000,000 bushels, and the Indian corn 40,000,000
bushels. The area under wheat in 1901 was 8,351,843 acres; Indian
corn, 3,102,140 acres; linseed, 1,512,340 acres; alfalfa, 3,088,929
acres. The farming industry is not, however, on a satisfactory basis.
No national lands in accessible districts are available for the
application of a homestead law, and the farmer too often has no
interest in the land beyond the growing crops, a percentage of the
harvest being the rent charged by the owner of the property. This
system is mischievous, since, if a few, consecutive bad seasons occur,
the farmer moves to some more favoured spot; while, on the other hand,
a succession of good years tends to increase rents. The principal
wheat and Indian corn producing districts lie in the provinces of
Santa Fe, Buenos Aires, Cordoba and Entre Rios, and the average yield
of wheat throughout the country is about 12 bushels to the acre.
Little attention is paid to methods of cultivation, and the farmer has
no resources to help him if the cereal crops fail. In the Andean
provinces of Mendoza, San Juan, Catamarca and Rioja viticulture
attracts much attention, and the area in vineyards in 1901 was 109,546
acres, only 18% of which was outside the four provinces named. Wine is
manufactured in large quantities, but the output is not sufficient to
meet the home demand. In the provinces of Tucuman, Salta and Jujuy the
main industry is sugar growing and manufacture. In 1901 the production
of sugar was 151,639 tons, of which 58,000 tons were exported. The
sugar manufacture, however, is a protected and bounty-fed industry,
and the 51 sugar mills in operation in 1901 are a heavy tax upon
consumers and taxpayers. Other products are tobacco, olives,
castor-oil, peanuts, canary-seed, barley, rye, fruit and vegetables.

The pastoral and agricultural industries have been hampered by
fluctuations in the value of the currency, farm products being sold at
a gold value for the equivalent in paper, while labourers are paid in
currency. The existing system of taxation also presses heavily upon
the provinces, as may be seen from the fact that the national,
provincial and municipal exactions together amount to L7 per head of
population, while the total value of the exports in 1898 was only L6
in round numbers. The _guia_ tax on the transport of stock from one
province to another, which has been declared unconstitutional in the
courts, is still enforced, and is a vexatious tax upon the
stock-raiser, while the consumption, or _octroi_, tax in Buenos Aires
and other cities is a heavy burden upon small producers.

_Manufactures._--Manufacturing enterprise in Argentina, favoured by
the protection of a high tariff, made noticeable progress in the
national capital during the closing years of the last century,
especially in those small industries which commanded a secure market.
The principal classes of products affected are foods, wearing apparel,
building materials, furniture, &c., chemical products, printing and
allied trades, and sundry others, such as cigars, matches, tanning,
paints, &c. In some manufactures the raw material is imported partly
manufactured, such as thread for weaving. The lack of coal in
Argentina greatly increases the difficulty and cost of maintaining
these industries, and high prices of the products result. Electric
power generated by steam is now commonly used in Buenos Aires and
other large cities for driving light machinery.

_Commerce._--The rapid development of the foreign trade of the
republic since 1881 is due to settled internal conditions and to the
prime necessity to the commercial world of many Argentine products,
such as beef, mutton, hides, wool, wheat and Indian corn. Efforts to
hasten this development have created some serious financial and
industrial crises, and have burdened the country with heavy debts and
taxes. During the decade 1881-1890 great sums of European capital were
invested in railways and other undertakings, encouraged by the grant
of interest guarantees and by state mortgage bank loans in the form of
_cedulas_, nominally secured on landed property. In 1890 the crisis
came, the mortgage banks failed, credits were contracted, the value of
property declined, defaults were common, imports decreased, and the
losses to the country were enormous. The constant fluctuations in the
value of the currency, then much depreciated, intensified the distress
and complicated the situation. Recovery required years, although made
easier by the sound and steady development of the pastoral and
agricultural industries, which were slightly affected by the crisis;
and the steadily increasing volume of exports, mainly foodstuffs and
other staples, saved the situation. There have been some changes in
commercial methods since 1890, the retailer, and sometimes the
consumer, importing direct to save intermediate commission charges.
Such transactions are made easy by the foreign banks established in
all the large cities of the republic. The conversion law of 1899,
which gave a fixed gold value to the currency (44 centavos gold for
each 100 centavos paper), has had beneficial influence on commercial
transactions, through the elimination of daily fluctuations in the
value of the currency, and the commercial and financial situation has
been steadily improved, notwithstanding heavy taxation and tariff
restrictions. The import trade shows the largest totals in foodstuffs,
wines and liquors, textiles and raw materials for their manufacture,
wood and its manufactures, iron and its manufactures, paper and
cardboard, glass and ceramic wares. The official valuation of imports,
which is arbitrary and incorrect, was $164,569,884 gold in 1889, fell
off to $67,207,780 in 1891, but gradually increased to $205,154,420 in
1905. The exports, which are almost wholly of agricultural and
pastoral products, increased from $103,219,000 in 1891 to $322,843,841
in 1905.

_Government._--The present constitution of Argentina dates from the 25th of September 1860. The legislative power is vested in a congress of two chambers--the senate, composed of 30 members (two from each province and two from the capital), elected by the provincial legislatures and by a special body of electors in the capital for a term of nine years; and the chamber of deputies, of 120 members (1906), elected for four years by direct vote of the people, one deputy for every 33,000 inhabitants. To the chamber of deputies exclusively belongs the initiation of all laws relating to the raising of money and the conscription of troops. It has also the exclusive right to impeach the president, vice-president, cabinet ministers, and federal judges before the senate. The executive power is exercised by the president, elected by presidential electors from each province chosen by direct vote of the people. The president and vice-president are voted for by separate tickets. The system closely resembles that followed in the United States. The president must be a native citizen of Argentina, a Roman Catholic, not under thirty years of age, and must have an annual income of at least $2000. His term of office is six years, and neither he nor the vice-president is eligible for the next presidential term. All laws are sanctioned and promulgated by the president, who is invested with the veto power, which can be overruled only by a two-thirds vote. The president, with the advice and consent of the senate, appoints judges, diplomatic agents, governors of territories, and officers of the army and navy above the rank of colonel. All other officers and officials he appoints and promotes without the consent of the senate. The cabinet is composed of eight ministers--the heads of the government departments of the interior, foreign affairs, finance, war, marine, justice, agriculture, and public works. They are appointed by and may be removed by the president.

Justice is administered by a supreme federal court of five judges and an attorney-general, which is also a court of appeal, four courts of appeal, with three judges each, located in Buenos Aires, La Plata, Parana and Cordoba, and by a number of inferior and local courts. Each province has also its own judicial system. Trial by jury is established by the constitution, but never practised. Civil and criminal courts are both corrupt and dilatory. In May 1899 the minister of justice stated in the chamber of deputies that the machinery of the courts in the country was antiquated, unwieldy and incapable of performing its duties; that 50,000 cases were then waiting decision in the minor courts, and 10,000 in the federal division; and that a reconstruction of the judiciary and the judicial system had become necessary. In June 1899 he sent his project for the reorganization of the legal procedure to congress, but no action was then taken beyond referring the bill to a committee for examination and report. The proceedings are, with but few exceptions, written, and the procedure is a survival of the antiquated Spanish system.

Under the constitution, the provinces retain all the powers not delegated to the federal government. Each province has its own constitution, which must be republican in form and in harmony with that of the nation. Each elects its governor, legislators and provincial functionaries of all classes, without the intervention of the federal government. Each has its own judicial system, and enacts laws relating to the administration of justice, the distribution and imposition of taxes, and all matters affecting the province. All the public acts and judicial decisions of one province have full legal effect and authority in all the others. In cases of armed resistance to a provincial government, the national government exercises the right to intervene by the appointment of an interventor, who becomes the executive head of the province until order is restored. The territories are under the direct control of the national government.

_Army._--The military service of the republic was reorganized in 1901, and is compulsory for all citizens between the ages of 20 and 45. The army consists of: (1) The Line, comprising the Active and Reserve, in which all citizens 20 to 28 years of age are obliged to serve; (2) the National Guard, comprising citizens of 28 to 40 years; (3) the Territorial Guard, comprising those 40 to 45 years. Conscripts of 20 years of age have to serve two years, three months each year. The active or standing army comprises 18 battalions of infantry, 12 regiments of cavalry, 8 regiments of artillery, and 4 battalions of engineers. A military school, with 125 cadets, is maintained at San Martin, near the national capital, and a training school for non-commissioned officers in the capital itself. Compulsory attendance of young men at national guard drills is enforced for at least two months of the year, under penalty of enforced service in the Line. In 1906 the president announced that permission had been given by the German emperor for 30 Argentine officers to enter the German army each year and to serve eighteen months, and also for five officers to attend the Berlin Military Academy. The equipment of the standing army is thoroughly modern, the infantry being provided with Mauser rifles and the artillery with Krupp batteries.

_Navy._--The disputes with Chile during the closing years of the 19th century led to a large increase in the navy, but in 1902 a treaty between the two countries provided for the restriction of further armaments for the next four years. The naval vessels then under construction were accordingly sold, but in 1906 both countries, influenced apparently by the action of Brazil, gave large orders in Europe for new vessels. At the time when further armaments were suspended, the effective strength of the Argentine navy consisted of 3 ironclads, 6 first-class armoured cruisers, 2 monitors (old), 4 second-class cruisers, 2 torpedo cruisers, 3 destroyers, 3 high-sea torpedo boats, 14 river torpedo boats, 1 training ship, 5 transports, and various auxiliary vessels. Two of these first-class cruisers were sold to Japan. The armament included 394 guns of all calibres, 6 of which were of 250 millimetres, 4 of 240, and 12 of 200. There are about 320 officers in active service, and the total personnel ranges from 5000 to 6000 men. The service is not popular, and it is recruited by means of conscription from the national guard, the term of service being two years. These conscripts number about 2000 a year. In addition, there is a corps of coast artillery numbering 450 men, from which garrisons are drawn for the military port, Zarate arsenal and naval prison. The government maintains a naval school at Flores, a school of mechanics in Buenos Aires, an artillery school on the cruiser "Patagonia," and a school for torpedo practice at La Plata. The naval arsenal is situated on the "north basin" of the Buenos Aires port, and the military port at Bahia Blanca is provided with a dry dock of the largest size, and extensive repair shops. There is also a dockyard and torpedo arsenal at La Plata, an artillery depot at Zarate, above Buenos Aires, and naval depots on the island of Martin Garcia and at Tigre, on the Lujan river.

_Education._--Primary education is free and secular, and is compulsory for children of 6 to 14 years. In the national capital and territories it is supervised by a national council of education with the assistance of local school boards; in the 14 provinces it is under provincial control. Secondary instruction is also free, but is not compulsory. It is under the control of the national government, which in 1902 maintained 10 colleges. Of these colleges four are in Buenos Aires, one in each province, and one in Conception del Uruguay. For the instruction of teachers the republic has 28 normal schools, as follows: three in the national capital; one in Parana, three (regional) in Corrientes, San Luis and Catamarca; 14 for female teachers in the provincial capitals; and seven for either sex in the larger towns of the provinces of Buenos Aires, Santa Fe, Cordoba and San Luis. The normal schools, maintained by the state on a secular basis, were founded by President Sarmiento, who engaged experienced teachers in the United States to direct them; their work is excellent; notably, their model primary schools. For higher and professional education there are two national universities at Buenos Aires and Cordoba, and three provincial universities, at La Plata, Santa Fe and Parana, which comprise faculties of law, medicine and engineering, in addition to the usual courses in arts and science. To meet the needs of technical and industrial education there are a school of mines at San Juan, a school of viticulture at Mendoza, an agronomic and veterinary school at La Plata, several agricultural and pastoral schools, and commercial schools in Buenos Aires, Rosario, Bahia Blanca and Concordia. Schools of art and conservatories of music are also maintained in the large cities, where there are, besides, many private schools. Secular education has been vigorously opposed by strict churchmen, and efforts have been made to maintain separate schools under church control. The national government has founded several scholarships (some in art) for study abroad. The total school population of Argentina in 1900 (6 to 14 years) was 994,089, of which 45% attended school, and 13% of those not attending were able to read and write. The illiterate school population was about 41%, and of those of 15 years and over 54% were illiterate. Of the whole population over 6 years, 50.5% were illiterate.

_Religion._--The Argentine constitution recognizes the Roman Catholic religion as that of the state, but tolerates all others. The state controls all ecclesiastical appointments, decides on the passing or rejection of all decrees of the Holy See, and provides an annual subsidy for maintenance of the churches and clergy. Churches and chapels are founded and maintained by religious orders and private gift as well. At the head of the Argentine hierarchy are one archbishop and five suffragan bishops, who have five seminaries for the education of the priesthood. From statistics of 1895 it appears that in each 1000 of population 991 are Roman Catholics, 7 Protestants, and 2 Jews, the Jews being entirely of Russian origin, sent into the republic since 1891 by the Jewish Colonization Association under the provisions of the Hirsch legacy; from 1895 to 1908 the number of Jews in Argentina increased from 6085 to about 30,000.

_Finance._--The revenue of the republic is derived mainly from customs
and excise, and the largest item of expenditure is the service of the
public debt. Since 1891 the national budgets have been calculated in
both gold and currency, and both receipts and expenditures have been
carried out in this dual system. The collection of a part of the
import duties in gold has served to give the government the gold it
requires for certain expenditures, but it has complicated returns and
accounts and increased the burden of taxation. According to a
compilation of statistical returns published by Dr. Francisco Latzina
in 1901, the national revenues and expenditures for the 37 years from
1864 to 1900, inclusive, reduced to a common standard, show a total
deficit for that period of $408,260,795 gold, which has been met by
external and internal loans, and by a continued increase in the scope
and rate of taxation. The growth of the annual budget is shown by a
comparison of the following years:--

Total Revenue. Total Expenditure.

1864 $7,005,328 gold. $7,119,931 gold.
1880 19,594,306 " 26,919,295 "
1890 73,150,856 " 95,363,854 "
1900 / 62,045,458 paper. / 104,501,614 paper.
\ 37,998,704 gold. \ 23,644,543 gold.
1905 / 63,439,000 paper. / 105,581,680 paper.
\ 43,461,324 gold. \ 24,865,016 gold.

The bane of Argentine finance has been the extravagant and
unscrupulous use of national credit for the promotion of schemes
calculated to benefit individuals rather than the public. The large
increase in military expenditures during the disputes with Chile also
proved a heavy burden, and in the continued strife with Brazil for
naval superiority this burden could not fail to be increased greatly.
A very considerable percentage of Argentina's population of five to
six millions is hopelessly poor and unprogressive, and cannot be
expected to bear its share of the burden. To meet these expenditures
there are a high tariff on imported merchandise, and excise and stamp
taxes of a far-reaching and often vexatious character. Nothing is
permitted to escape taxation, and duplicated taxes on the same thing
are frequent. In Argentina these burdens bear heavily upon the
labouring classes, and in years of depression they send away by
thousands immigrants unable to meet the high costs of living. For the
year 1900 the total expenditures of the national government, 14
provincial governments, and 16 principal cities, were estimated to
have been $208,811,925 paper, which is equivalent to $91,877,247 gold,
or (at $5.04 per pound stg.) to L18,229,612, 10s. The population that
year was estimated to be 4,794,149, from which it is seen that the
annual costs of government were no less than L3, 16s. for each man,
woman, and child in the republic. About 71% of this charge was on
account of national expenditures, and 29% provincial and municipal
expenditures. Had the expenses of all the small towns and rural
communities been included, the total would be in excess of $20 gold,
or L4, _per capita_.

In 1889 the public debt of the republic amounted to about L24,000,000,
but the financial difficulties which immediately followed that year,
and the continuance of excessive expenditures, forced the debt up to
approximately L128,000,000 during the next ten years. In the year 1905
the outstanding and authorized debt of the republic was as follows:--

External debt (July 31, 1905):

National loans L42,297,050
Provincial loans and others, assumed 30,395,916
National cedulas 11,763,923
----------
Total L84,456,889

Consolidated Internal debt (Dec. 31, 1904):

Gold $16,544,000
Paper 79,174,400
---------- L10,178,718

Total service on funded debt, 1905,
$24,375,067 gold, and $15,914,335 paper L6,225,669

Floating debt L259,170
Treasury bills (Apr. 30, 1905) 275,220
Unpaid bills, $3,332,594, paper 288,560
--------- L822,950

The paper currency forms an important part of the internal debt, and
has been a fruitful source of trouble to the country. Few countries
have suffered more from a depreciated currency than Argentina. During
the era of so-called "prosperity" between 1881 and 1890 an enormous
amount of bank notes were issued under various authorizations,
especially that of the "free banking law" of 1887. During this period
the bank-note circulation was increased to $161,700,000, and two
mortgage banks--the National Hypothecary Bank and the Provincial
Mortgage Bank (of Buenos Aires)--flooded the country with $509,000,000
of _cedulas_ (hypothecary bonds). When the crash came and the national
treasury was found to be without resources to meet current expenses,
further issues of $110,000,000 in currency were made. The free-banking
law which permitted the issue of notes by provincial banks was
primarily responsible for this situation. Under the provisions of this
law the provinces were authorized to borrow specie abroad and deposit
the same with the national government as security for their issues.
These loans aggregated L27,000,000. The Celman administration, in
violation of the trust, then sold the specie and squandered the
proceeds, leaving the provincial bank notes without guarantee and
value. The national government has since assumed responsibility for
all these provincial loans abroad. As on previous occasions, the great
depreciation in the value of the currency has led to a repudiation of
part of its nominal value. This depreciation reached its maximum in
October 1891 ($460.82 paper for $100 gold), and remained between that
figure and $264 during the next six years. To check these prejudicial
fluctuations and to prevent too great a fall in the price of gold (to
repeat a popular misconception), a conversion law was adopted on the
31st of October 1899, which provided that the outstanding circulation
should be redeemed at the rate of 44 centavos gold for each 100
centavos paper, the official rate for gold being 227.27. Provisions
were also made for the creation of a special conversion fund in specie
to guarantee the circulation, which fund reached a total of
$100,000,000 in March 1906. These measures have served to give greater
stability to the value of the circulating medium, and to prevent the
ruinous losses caused by a constant fluctuation in value, but the rate
established prevents the further appreciation of the currency. On the
18th of January 1906 the currency in circulation amounted to
$502,420,485, which is more than $95 _per capita_. (A. J. L.)

HISTORY

The first Europeans who visited the river Plate were a party of Spanish explorers in search of a south-west passage to the East Indies. Their leader, Juan Diaz de Solis, landing incautiously in 1516 on the north coast with a few attendants to parley with a body of Charrua Indians, was suddenly attacked by them and was killed, together with a number of his followers. This untoward disaster led to the abandonment of the expedition, which forthwith returned to Spain, bringing with them the news of the discovery of a fresh-water sea. Four years later (1520) the Portuguese seaman, Ferdinand Magellan, entered the estuary in his celebrated voyage round the world, undertaken in the service of the king of Spain (Charles I., better known as the emperor Charles V.). Magellan, as soon as he had satisfied himself that there was no passage to the west, left the river without landing.

Cabot.

The first attempt to penetrate by way of the river Plate and its affluents inland, with a view to effecting settlements in the interior, was made in 1526 by Sebastian Cabot. This great navigator had already won renown in the service of Henry VII. of England by his voyage to the coast of North America in company with his father, Giovanni Caboto or Cabot (see CABOT, JOHN). Sebastian Cabot had in 1519 deserted England for Spain, and had received from King Charles the post of pilot-major formerly held by Juan de Solis. In 1526 he was sent out in command of an expedition fitted out for the purpose of determining by astronomical observations the exact line of demarcation, under the treaty of Tordesillas, between, the colonizing spheres of Spain and Portugal, and of conveying settlers to the Moluccas. Arrived in the river Plate in 1527, rumours reached Cabot of mineral wealth and a rich and civilized empire in the far interior, and he resolved to abandon surveying for exploration. He built a fort a short distance up the river Uruguay, and despatched one of his lieutenants, Juan Alvarez Ramon, with a separate party upon an expedition up stream. This expedition was assailed by the Charruas and forced to return on foot, their leader himself being killed. Cabot, with a large following, entered the Parana and established a settlement just above the mouth of the river Carcaranal, to which he gave the name of San Espiritu, among the Timbu Indians, with whom he formed friendly relations. He continued the ascent of the Parana as far as the rapids of Apipe, and finding his course barred in this direction, he afterwards explored the river Paraguay, which he mounted as far as the mouth of the affluent called by the Indians Lepeti, now the river Bermejo. His party was here fiercely attacked by the Agaces or Payagua Indians, and suffered severely. Cabot in his voyage had seen many silver ornaments in the possession of the Timbu and Guarani Indians. Some specimens of these trinkets he sent back to Spain with a report of his discoveries. The arrival of these first-fruits of the mineral wealth of the southern continent gained for the estuary of the Parana the name which it has since borne, that of Rio de la Plata, the silver river. As Cabot was descending the stream to his settlement of San Espiritu, he encountered an expedition which had been despatched from Spain for the express purpose of exploring the river discovered by Solis, under the command of Diego Garcia. Finding that he had been forestalled, Garcia resolved to return home. Cabot himself, after an absence of more than three years, came back in 1530, and applied to Charles V. for means to open up communications with Peru by way of the river Bermejo. The emperor's resources were, however, absorbed by his struggle for European supremacy with Francis I. of France, and he was obliged to leave the enterprise of South American discoveries to his wealthy nobles. Cabot's colony at San Espiritu did not long survive his departure; an attempt of the chief of the Timbus to gain possession of one of the Spanish ladies of the settlement led to a treacherous massacre of the garrison.

Mendoza.

Buenos Aires.

Two years after the return of Cabot, the news of Francisco Pizarro's marvellous conquest of Peru reached Europe (1532), and stirred many an adventurous spirit to strive to emulate his good fortune. Among these was Pedro de Mendoza, a Basque nobleman. He obtained from Charles V. a grant (_asiento_) of two hundred leagues of the coast from the boundary of the Portuguese possessions southward towards the Straits of Magellan, and the inland country which lay behind it. Mendoza undertook to conquer and settle the territory at his own charges, certain profits being reserved to the crown. In August 1534 the _adelantado_, or governor, sailed from San Lucar, at the head of the largest and wealthiest expedition that had ever left Europe for the New World. In January 1535 he entered the river Plate, where he followed the northern shore to the island of San Gabriel, and then crossing over he landed by a little stream, still called Riachuelo. The name of Buenos Aires was given to the country by Sancho del Campo, brother-in-law of the _adelantado_, who first stepped ashore. Here, on the 2nd of February, Mendoza laid the foundations of a settlement which in honour of the day he named Santa Maria de Buenos Aires. Mendoza, after some fierce encounters with the Indians, now proceeded up the Parana, and built a fort, which he called Corpus Christi, near the site of Cabot's former settlement of San Espiritu. The expedition, which originally numbered 2500 men, was reduced by deaths at the hands of the Indians, by disease and privation, within a year to less than 500 men. From Corpus Christi, Mendoza sent out various bodies to explore the interior in the direction of Peru, but without much success, and at length, thoroughly discouraged and broken in health, he abandoned his enterprise, and returned to Spain in 1537.

Asuncion

A portion of one of the expeditions he despatched, under Juan de Ayolas, pushing up the Paraguay, is said to have reached the south-east districts of Peru, but while returning laden with booty, was attacked by the Payagua Indians, and every man perished. The other portion, which had stayed behind as a reserve under Domingos Irala, had better fortunes. Finding their comrades did not return, Irala and his companions determined to descend the river, and on their downward journey opposite the mouth of the river Pilcomayo, finding a suitable site for colonizing, they founded (1536) what proved to be the first permanent Spanish settlement in the interior of South America, the future city of Asuncion (15th August 1536).

Irala

In the meantime the colony at Buenos Aires had been dragging on a miserable existence, and after terrible sufferings from famine and from the ceaseless attacks of the Indians, the remaining settlers abandoned the place and made their way up the river first to Corpus Christi, then to Asuncion. Here, by the emperor's orders, the assembled Spaniards proceeded to the election of a captain-general, and their choice fell almost unanimously on Domingos Martinez de Irala, who was proclaimed captain-general of the Rio de la Plata (August 1538). In 1542 the settlement of Buenos Aires was re-established by an expedition sent for the purpose from Spain, under a tried _adelantado_, Cabeza de Vaca. This able leader, eager to reach Asuncion as quickly as possible, sent on his ships to the river Plate, but himself with a small following marched overland from Santa Catherina on the coast of Brazil to join Irala. His doings at Asuncion belong, however, not to the history of Argentina, but of Paraguay. Suffice it to say that differences with Irala eventually led to his arrest, and to his being sent back to Spain to answer to the charges brought against him for maladministration. The second settlement made by his expedition at Buenos Aires was even less successful and long-lived than the first. Exposed to the incessant attacks of the savages, the piace was a second time abandoned, February 1543.

Juan de Garay.

Forty years were now to elapse before any further efforts were made by the Spaniards to colonize any part of the territory of the river Plate and lower Parana. In 1573 Juan de Garay, at the head of an expedition despatched from Asuncion, founded the city of Santa Fe near the abandoned settlements of San Espiritu and Corpus Christi. Seven years later (1580), when the new colony had been firmly established, Juan de Garay proceeded southwards, and made the third attempt to build a city on the site of Buenos Aires; and despite the determined hostility of the Querendi Indians he succeeded in finally gaining a complete mastery over them. In a desperate battle, the natives were defeated with great slaughter, and the territory surrounding the town was divided into ranches, in which the conquered natives had to labour. The new town received from Garay the name of _Ciudad de la Santissima Trinidad_, while its port retained the old appellation of Santa Maria de Buenos Aires. It was endowed by its founder with a _cabildo_ (corporation) and full Spanish municipal privileges. Garay, when on his way to Santa Fe, was unfortunately murdered by a party of Indians, Minuas (Mimas), three years later, while incautiously sleeping on the river bank near the ruins of San Espiritu. The new settlement, however, continued to prosper, and the cattle and horses brought from Europe multiplied and spread over the plains of the Pampas.

In the meantime the Spaniards had penetrated into the interior of what is now the Argentine Republic, and established themselves on the eastern slopes of the Andes. In 1553 an expedition from Peru made their way through the mountain region and founded the city of Santiago del Estero, that of Tucuman in 1565, and that of Cordoba in 1573. Another expedition from Chile, under Garcia Hurtado de Mendoza, crossed the Cordillera in 1559, and having defeated the Araucanian Indians, made a settlement which from the name of the leader was called Mendoza. In 1620 Buenos Aires was separated from the authority of the government established at Asuncion, and was made the seat of a government extending over Mendoza, Santa Fe, Entre Rios and Corrientes, but at the same time remained like the government of Paraguay at Asuncion, and that of the province of Tucuman, which had Cordoba as its capital, subject to the authority of the viceroyalty of Peru.

Evils of Spanish colonial system.

Asiento question.

Thus at the opening of the 17th century, after many adventurous efforts, and the expenditure of many lives and much treasure, the Spaniards found themselves securely established on the river Plate, and had planted a number of centres of trade and colonization in the interior. Unfortunately, in no part of the Spanish oversea possessions did the restrictive legislation of the home government operate more harshly or disadvantageously to the interests of the colony; it was a more effective hindrance to the development of its resources and the spread of civilization over the country, than the hostility of the Indians. Cabot had urged the feasibility of opening an easier channel for trade with the interior of Peru through the river Plate and its tributaries, than that by way of the West Indies and Panama; and now that his views were able to be realized, the interests of the merchants of Seville and of Lima, who had secured a monopoly of the trade by the route of the isthmus, were allowed to destroy the threatened rivalry of that by the river Plate. Never in the history of colonization has a mother country pursued so relentlessly a policy more selfish and short-sighted. Spanish legislation was not satisfied with endeavouring to exclude all European nations except Spain from trading with the West Indies, but it sought to limit all commerce to one particular route, and it forbade any trade being transacted by way of the river Plate, thus enacting the most flagrant injustice towards the people it had encouraged to settle in the latter country. The strongest protests were raised, but the utmost they could effect was that, in 1618, permission was granted to export from Buenos Aires two shiploads of produce a year. But the Spanish government was not content with the prohibition of sea-borne commerce. To prevent internal trade with Peru a custom-house was set up at Cordoba to levy a duty of 50% on everything in transit to and from the river Plate. In 1665 the relaxation of this system was brought about by the continual remonstrances of the people, but for more than a century afterwards (until 1776) the policy of exclusion was enforced. This naturally led to a contraband trade of considerable dimensions. The English, after the treaty of Utrecht (1715) held the contract (_asiento_) for supplying the Spanish-American colonies with negro slaves. Among other places the slave ships regularly visited Buenos Aires, and despite the efforts of the Spanish authorities, contrived both to smuggle in and carry away a quantity of goods. This illicit commerce went on steadily till 1739, when it led to an outbreak of war between England and Spain, which put an end to the _asiento_. The Portuguese were even worse offenders, for in 1680 they made a settlement on the north of the river Plate, right opposite to Buenos Aires, named Colonia, which with one or two short intervals, remained in their hands till 1777. From this port foreign merchandise found its way duty free into the Spanish provinces of Buenos Aires, Tucuman and Paraguay, and even into the interior of Peru. The continual encroachments of the Portuguese at length led the Spanish government to take the important step of making Buenos Aires the seat of a viceroyalty with jurisdiction over the territories of the present republics of Bolivia, Paraguay, Uruguay and the Argentine Confederation (1776). At the same time all this country was opened to Spanish trade even with Peru, and the development of its resources, so long thwarted, was allowed comparatively free play. Pedro de Zeballos, the first viceroy, took with him from Spain a large military force with which he finally expelled the Portuguese from the banks of the river Plate.

Effects of French war.

The wars of the French Revolution, in which Spain was allied with France against Great Britain, interrupted the growing prosperity of Buenos Aires. On the 17th of June 1806 General William Beresford landed with a body of troops from a British fleet under the command of Sir Home Popham, and obtained possession of Buenos Aires. But a French officer, Jacques de Liniers, gathered together a large force with which he enclosed the British within the walls, and finally, on the 12th of August, by a successful assault, forced Beresford and his troops to surrender. In July 1807 another British force of eight thousand men under General Whitelock endeavoured to regain possession of Buenos Aires, but strenuous preparations had been made for resistance, and after fierce street fighting the invading army, after suffering severe losses, was compelled to capitulate. The colonists, who had achieved their two great successes without any aid from the home government, were naturally elated, and began to feel a new sense of self-reliance and confidence in their own resources. The successful defence of Buenos Aires accentuated the growing feeling of dissatisfaction with the Spanish connexion, which was soon to lead to open insurrection. The establishment of the Napoleonic dynasty at Madrid was the actual cause which brought about the disturbances which were to end in separation. Liniers was viceroy on the arrival of the news of the crowning of Joseph Bonaparte as king of Spain, but as a Frenchman he was distrusted and was deposed by the adherents of Ferdinand VII. The central junta at Seville, acting in the name of Ferdinand, appointed Balthasar de Cisneros to be viceroy in his place. He entered upon the duties of his office on the 19th of July 1809, and at first he gained popularity by acceding to the urgent appeals of the people and throwing open the trade of the country to all nations. But his measures speedily gave dissatisfaction to the Argentine or Creole party, who had long chafed under the disabilities of Spanish rule, and who now felt themselves no longer bound by ties of loyalty to a country which was in the possession of the French armies.

Struggle for independence.

On the 25th of May 1810 a great armed assembly met at Buenos Aires and a provisional junta was formed to supersede the authority of the viceroy and carry on the government. The acts of the new government ran in the name of Ferdinand VII., but the step taken was a revolutionary one, and the 25th of May has ever since been regarded as the birthday of Argentine independence. The most prominent leader of the junta was its secretary Mariano Moreno (1778-1811), who with a number of other active supporters of the patriot cause succeeded in raising a considerable force of Buenos Aireans to maintain, arms in hand, their nationalist and anti-Spanish doctrines. An attempt of the Spanish party to make Balthasar de Cisneros president of the junta failed, and the ex-viceroy retired to Montevideo. A sanguinary struggle between the party of independence and the adherents of Spain spread over the whole country, and was carried on with varying fortune. Foremost among the leaders of the revolutionary armies were Manuel Belgrano, and after March 1812 General Jose de San Martin, an officer who had gained experience against the French in the Peninsular War. A state of disorder, almost of anarchy, reigned in the provinces, but on the 25th of March 1816 a congress of deputies was assembled at Tucuman, who named Don Martin Pueyrredon supreme director, and on the 9th of July the separation of the united provinces of the Rio de la Plata was formally proclaimed, and comparative order was re-established in the country; Buenos Aires was declared the seat of the government. The jealousy of the provinces, however, against the capital led to a series of disturbances, and for many years continual civil war devastated every part of the country. Bolivia, Paraguay and Uruguay rose in armed revolt, and finally established themselves as separate republics, whilst the city of Buenos Aires itself was torn with faction and the scene of many a sanguinary fight.

Republic established.

From 1816, however, the independence of the Argentine Republic was assured, and success attended the South Americans in their contest with the royal armies. The combined forces of Buenos Aires and Chile defeated the Spaniards at Chacabuco in 1817, and at Maipu in 1818; and from Chile the victorious general Jose de San Martin led his troops into Peru, where on the 9th of July 1821, he made a triumphal entry into Lima, which had been the chief stronghold of the Spanish power, having from the time of its foundation by Pizarro been the seat of government of a viceroyalty which at one time extended to the river Plate. A general congress was assembled at Buenos Aires on the 1st of March 1822, of representatives from all the liberated provinces, and a general amnesty was decreed, though the war was not over until the 9th of December 1824, when the republican forces gained the final, victory of Ayacucho, in the Peruvian border-land. The Spanish government did not, however, formally acknowledge the independence of the country until the year 1842. On the 23rd of January 1825, a national constitution for the federal states, which formed the Argentine Republic, was decreed; and on the 2nd of February of the same year Sir Woodbine Parish, acting under the instructions of George Canning, signed a commercial treaty in Buenos Aires, by which the British government acknowledged the independence of the country. It had already been recognized by the United States of America two years previously.

Unitarians and Federalists.

In 1826 Bernardo Rivadavia was elected president of the confederation. His policy was to establish a strong central government, and he became the head of a party known as Unitarians in contradistinction to their opponents, who were styled Federalists, their aim being to maintain to the utmost the local autonomy of the various provinces. Under the government of Rivadavia the people of Buenos Aires became involved, practically single-handed, in a war with Brazil in defence of the Banda Oriental, which had been seized by the imperial forces (see URUGUAY). The Brazilians were defeated, notably at Ituzaingo, and in 1827 the war issued in the independence of Uruguay. Rivadavia's term of office was likewise memorable for the constitution of the 24th of December 1826, passed by the constituent congress of all the provinces, by which the bonds which united the confederated states of the Argentine Republic were strengthened. This project of closer union met, however, with much opposition both at Buenos Aires and the provinces. Rivadavia resigned, and Vicente Lopez, a Federalist, was elected to succeed him, but was speedily displaced by Manuel Dorrego (1827), another representative of the same party. The carrying out of Federalist principles led, however, to the formation in the republic of a number of quasi-independent military states, and Dorrego only ruled in Buenos Aires. After the conclusion of the peace with Brazil, the Unitarians placed themselves under the leadership of General Juan de Lavalle, the victor of Ituzaingo. Lavalle, at the head of a division of troops, drove Dorrego from Buenos Aires, pursued him into the interior, and captured him. He was shot (December 9, 1828), by the order of Lavalle, and during the year 1828 the country was given up to the horrors of civil war.

Rosas dictator.