Evening star. [volume] (Washington, D.C.) 1854-1972, 1890-11-24
THE MATTER WITH THE EARRINGS.
The Extent of Spccuiations in the Argen-
tine Republic.


From the New York Star.
Mr.. Chas N. Harper sailed for Buenos Ayres
yesterday, in which city he has spent the last
ten years. The liquidation of the affairs of
Barring Bros. hurried him back to the Argen-
tine Republic, where he has large business in
terests, but before going he told something
about the state of affairs there and the causes
in that part Of the world which gave 80 much
trouble to the great English banking house.
1.-THE true cause Of the embarrassment of the
Barings," said Mr.. Harper, 'has been told by
the newspapers, but not fully explained.
LET it be remembered that in all the finan-
cial transactions Of the Argentine government
the Earrings were the real national treasury.
They furnished the money. Now listen to the
story:
For years the Argentine has been rushing
ahead AZ the booming country Of Spanish
America. They pushed forward grand scheme
OF railroad construction, which has amounted
to 5000 miles, some Of it in the face of great
engineering difficulties and involving immense
cost An amazing and not altogether unstable
prosperity was stimulated. and then the gov
eminent began n sort of artificial and specuia-
tive system OF promoting immigration. Lands
were sold at nominal prices, largely on long
credits farms in certain districts and on GER
taiE conditions were given away, and then, for
the purpose OF stimulating cultivation and pro-
duction, the device known as the 'cedula' was
invented
''The cedula caused the downfall of the Bar
ings."
what is the cedula?'
"Why, it is exactly the scheme fathered by
Senator Stanford Of California when he intro
duced his proposed law providing for govern
ment loans to farmers in Congress recently
1t is a mortgage bond authorized by the gov
eminent. issued by state and local banks. Sc
hN NM
proved lands, at the rate of so per cent OF their
nominal value, the interest on these cedulas
being guaranteed by the government.
THE mOmen. this scheme for distributing
money was fairly understood it was taken adj
vantage OF to a most marvellous extent.
Everybody-old-timer in the republic and
newcomers-fairly wallOwed in money, in
paper money issued by the banks; for nearly
every farm in the nation was covered over
with cedulas. 1t was in 1882 that this craze
broke out. and within the last eight years
more than $415, 0OO. 600 has been loaned on
this class of securities. OF course, the nat
ural result has at last come about-interest has
been defaulted and the assumed value of the
lands is found to be not the market value.
There is not million dollars worth of these
ing Bros. can tell where most of them are
placed, and if they did tell it would be found
that England il plastered all over with them,
Is it any wonder that the tight little island is
in financial worry! Is it any wonder that the
big English house found it impossible to carry
the burden of the interest which it had guar
anteed on those hundreds of millions of
cedulas?
''If it were not for the magnifcently recu-
perative powers which the Argentine people
and government possess the cedula and the
trouble with the Barings would undo all the
great good which legitimate enterprise has ac-
complished in the republic, and would leave
the commerce and the productive industries of
the nation at the mercy of the sharks and har-
pies of the worlds financial centcrs
"But," concluded Mr.. Harper, fortunately
abiding proof that the people and government
will come out of this crisis in an honorable and
wholly safe way, fulfilling their obligations to
the public and to the great banking house which
SO steadily befriended them"