The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1890-12-11
LESSON FOR FARMERS.
The Wreck of the Booming Re-
public of Argentine.
A NATIONAL MORTGAGE SYSTEM.
The Government Did What the Alliance
Want. the United States to Do
The Inevitable Result.
Cincinnati Commercial Gazette.

Atlanta session, declared in favor OF the
government loaning money TO individuals
on lands or other good securities.
The Argentine Republic has been doing
exactly this thing for its farmers and other
citizens, and having sown the wind, is
reaping the whirlwind. Its misfortunes
should fix the attention of every thought
full voter in our land. The points OF the
lesson stand out as bright as the sun in the
heavens. The finances of great, rich ana
rapidly growing nation have been almost
hopelessly involved.
international disorders have taken the
place of peace. The national securities are
dishonored, and through the Earrings,
whose calamity resulted from free invest
ments in these bonds, the financial world
was shaken in all of its centers, and ex-
cept for extraordinary and unprecedented
assistance universal panic and widespread
disaster would have followed. both for
Europe and America.
In view of the foothold which the very
policy that has SO nearly ruined the Ar
gentine Republic has gained III the United
States. the study of the problems which
the Farmers Alliance is forcing upon this
country becomes a matter of startling ma
tional concern.
4 few facts, taken mainly from the recent
work of Mr.. w. 4. Curtis on the Capitals
of South America" will show the condi-
ton of this nation which Farmers Alli-
ance policy has so seriously crippled.
The increase of population in the Argen-
tine Republic during the past twenty-five
years has been 154 per cent, while In the
same time in the United States it has been
only 10 per cent. Twenty-three lines of
steamships connect that republic with Eu-
rope, and from forty to sixty vessels are
sailing back and forth each month. The
imports of manufactured merchandise are
nearly 500, 000, 900 year. The pampas al
ready produce fruit enough for domestic
use and 1900, 600 bushels beside for export.
There are more sheep in its pastures than
are owned by any country in the world,
and the wool export is in round numbers,
100000, 900 pounds. The cattle trade with
Europe is already immense, and beef and
mutton are sent to England in the re-
frigerator ships at prices which we cannot
compete with.
There are banks in the republic with
greater capital than any in the United
States. For example, the Provincial bank
has a capital of $50, 100000 and S67 200, 600
of deposits. Ii does more business than
any of our banks, and more than the I'm
perial bank of Germany, being exceeded by
only two banks in the world. The Ma
tional bank has capital of $40,000,0 900, an
other has IS, 900, 900, another 81, 0O0, 900, and
several $5,000,000 each. Comparing the
banking capital and the deposits of the
Republic with those of the United States,
we ind that they amount to $64 per capita
there, against $40 per capita here. There
are more daily papers in Buenos Ayres
than in New York or London. The two
Argentine universities, under the patron
age of the government, are among the best
in America.
These facts are sufficient to show the
enormous resources of this South Ameri-
can republic, and its wonderful promise
under wholesome development. But just
at this point of almost unprecedented
prosperity and rapid advancement in
everything that tends to make a nation
great and powerful, poison, exactly SIM
of our own country is attempting to intro
duce into our financial system, began its
work with the Argentine Republic.
On the 14th of September, 1885, when
the republic was in the full tide of pros
perity, a law was passed creating great
national mortgage bank, whose special
functions were to make loans to individ-
uals upon real estate security. This bank
was authorized to operate in all the prov
inces and territories of the republic 1t
did not loan money directly on mortgages,
but il did worse. II issued transferable
mortgage bonds, called cedulas, on the ex-
ecution of mortgages in its favor. These
sold for what they would fetch by the
holders, and the nation guaranteed the
interest.
Ii also organized a national pawn office,
in which personal property Of every de-
scription could be deposited and loans
made upon it by officers appointed by the
president of the Republic The establish
ment operates by public money advanced
by the national bank. Besides this central
national pawn Office others were also es-
tablished by law in the several provinces
and in all their principal towns and cities
In two years. the National Mortgage
Bank had put in circulation nearly Sos
100000 of cedulas, the interest upon which
was guaranteed by the government. Be
fore the expiration of another year this
sum had been increased to $4,000 600. and
on the LIST of August, 1889 or three wears
after the passage of the South American
Farmers Alliance bill, the National Mort
gage Bank and the provincial banks had
issued SfO,000,0 900 in cedulas, the average
rate of interest guaranteed by the govern
ment being fraction less than per cent.
Things went from bad TO worse and at
last came the catastrophe that could not
be averted.
The failure of the great firm of Barring
Bros. completes this history The theories
of the Farmers Alliance, as practically
applied by the Argentine Republic. wrecked
that great financial institution, and but
for the prompt assistance of the greatest
financial agencies in the world. the imam
clal prosperity of the civilized world would
have received a shock from which il could
not have recovered in years.
The controlling cause of the Baring's
downfall was their guarantee of Argentine
securities. The collapse so long expected,
and which was inevitable from the govern
ment guarantee of its immense loans To
citizens upon values of every kind, in tated
fictitious and otherwise. fell on the house.
of the Earrings and wrecked il.
The latest information from London in
regard 10 this tremendous failure of the
Earrings shows its extent, and the influences
which its guarantee on the loans of the
Argentine Republic had upon its fortune
IL now seems that IN addition 10 the
Ss5,oo0oo0 contributed from the influential
sources already mentioned, the Roths-
chIldS have placed $20,Ooo. 900 To be used As
guarantee 10 assure the interest on the
various loans of the Argentine Republic
which the Barring Brothers hold. The in
formation IN this country among those
having knowledge of the affairs of the
BaTlngs Is that while the immediate cause
Of the distress Of that house was the nm
expected Withdrawal of a depoSit of
t2,9uS,eo by the Russian government. the
real cause of the Gripping of the house
was the drain upon II which has been going
on for some years. arising out of its efforts
10 pay the interest upon the inflated Argen-
tine bonds.
Morning robes make n. lasome Christ
mas present, such aS NAV f.. seen AT Nv
ans, PauSon & Co.. so. ~. sol Front
street, corner Columbia.