St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1890-08-02
ARGENTINE'S FEVER,
The Cause Of the Revolution
in the South American
Republic.
A Government Trying to Do
Too Much and Go Far
Too Fast.
Final Condemnation Of It's
Reckless Poliey--Almost
Unlimited Debts.
INDUCING in a Mild Debauch
Of Speculation - The
Usual End.

Argentine Republic had been trying
ITO do too much and go too fast" says
the New York Sun. The present revo-
luton is the final condemnation of the
policy. For several years past all the
different sorts of governmental ma
chinery authorized to contract debts
have been working at full pressure.
The republic itself, the provinces of
which it is composed and the munich
palities have been borrowing money in
Europe to such an extent that scarcely
anything but the purse of Fortunatus
could repay. At first all that was asked
was obtained in London. Finally the
British investors became scared. 1t
seemed to them that the Argentine peo-
pie were trying to discount their future
for the next century. Then these South
Americans, finding that British purses
were closing, went to the continent for
money, and raised large loans in Paris,
Berlin and Amsterdam. They bor-
rowed until the European public aetu-
ally declined to lend.
Here are some of the things they have
been doing with all this money. They
decided to open up their vast country,
most of it very sparsely inhabited, by
lines of railroad running in every direc-
ton. These lines have been built or
are now building. Some of them run
to or toward the Cordilleras for long dis
tances through country that has not yet
been settled at all. Then all sorts of
other industrial enterprises have been
encouraged. Scores of companies were
organized in Europe. The amount of
,x,hI fhou oclynA
was, in round numbers, S550,000, 900.
They got. in fact, about $500, 900, 1000.
A General Fever of Speculation.
But this was not all by any means.
The fever of speculation and expansion
seized everybody. In addition to the
enormous transactions abroad, many
hundreds of companies were formed,
and millions of money put into them at
home. 1t should be borne in mind that
these home enterprises and debts are
entirely distinct from the obligations
and schemes organized in Europe. The
BuenoS AyreS Standard said in Novem-
Der last that since 1882 new companies
had been organized in the republic itself
with capital amounting in the aggregate
to about S600,000.000. The European
obligations are all payable in gold. but
at home loans were raised on the basis
of paper money. though it is stipulated
that the principal and interest. and also
dividends. must be paid i'll gold.
But in addition to this colo ssal load
of debt the craze for speculation found
means of involving the country still
deeper in the quicksandS. The two
great banks of the republic-the Ma.
tienal Mortgage bank and the Hypothe.
cate Bank of the Province of Buenos
Ayres-iSsued bonds known as Cedulas
The banks did not loan money, but they
loaned these bonds to owners of houses
and lands, the bonds being secured by
mortgages on the property and the bor-
rover selling the Cedulas for the best
price he could get in the market. Here
was fine chance for all owners of
realty to plunge into speculative enter
prises, and they improved it so well
that in eight years they piled up debts,
secured by mortgages On their homes
and other real estate, to about $500, 00O,
000.
Enormous Financial Load.
What. then, are the obligations which
these people, less than 4,O0000O in mum
Der, have assumed in the eight years
since the beginning of 1882 -? The own
ers of real estate have burdened them
selves with debts amounting to $780,.
100000; new companies have been floateG
at home with total capital of $780,
100000; and money has been borrowed
and companies f1oated in Europe to the
amount of about $500, 100000. In othel
words, the people of the young republic
have in eight years assumed a financial
load of over $500 for every man, woman
and child in the land, and that in &
country where most of the people are
still poor.
The natural result of this enormous
plethora Of money followed. Since the
days of the famous Mississippi scheme
speculation has seldom been so per.
fectly uncomfortable. Everybody saw
the chance to get rich in a hurry, and
mortgaged himself up to the eyes to i'm
prove it. Commodities of all sorts soon
brought great prices, and real estate
advanced by leaps and bounds. The
BuenOS Ayres Standard tells of bit OF
ground in that city that was offered to
the government in 1887 for $500. 900. The
government declined to pay so high a
price. A year later the land was
marketed for $l,000,000, and last sum
mer it was purchased by the government
for S5.000,000.
The two mortgage banks loaned all
the Cedulas they could secure mort
cages for, and the most exurayagant
financial legislation fastened the day OF
collapse. The Inevitable storm, which
began brewing over three years ago
when President Celman, now fugitive
from his capital, was inaugnrated,
seems to have been foreseen by nobody.
Celman himself, in his inaugural adj
dress, TINS congratulated the country:
1.-THE new period now inaugurated
has brilliant starting point, worthy of
figuring i'll our most glorious triumphS."
The Inevitable Result.
But the shoe began to pinch terribly
gold on this enormous debt. Then spe-
Gle payments were suspended. This
step may have been necessary to save
tue country from utter collapse, but it
helped wonderfully to unSettle values,
with the premium on gold running up
and down the scale from 10 to 40 per
cent. The aggregate of business fail
ureS in the last twelve months has been
enormous. The great financial houses
all over Europe that have involved
themselves so deeply have done their
best to avert a catastrophe by maintain
ing the market. But every argument
and resource originating in Europe or
with the Argentine government was
futile to avert the panic that seized
upon the country last winter.
The people. Smothered in debts they
have no present hope of paying, have
cast about for scapegoat and pitched
upon the government as the source of
all their troubles. The appropriately of
the Celman administration has been
augmenting for some time. The wild
est rumors concerning its character
have been circulated, and among them
the statement that President Celman
has invested 100000 of the public
funds for his own benefit abroad.
Threats of popular uprising have been
floating in the air for some time. Sew
eral days ago a number Of prominent
men were arrested for plotting a revoIu-
ton. and the elimination of this stormy
period has been reached in the present
outbreak, which, according to the re-
ports, has placed the capital in the
hands OF the insurgents, while the re-
volt is spreading to the provinces.
This Is brief statementof the causes
that have led to the revolution in the
Argentine Republic. No one can doubt
X, - G