Morning journal and courier., 1891-08-11
Argentine Cheap Money.

Tropics of the Time in the Century,
 In 1873 there was established in the cap- ital city of the Argentine Republic, Bue- nos Ayres, the Hypothecary, or Mortgage bank, whose main object was to make loans on all kinds of landed property. The principles upon which these loans were to be made were much the same as Senator Stanford is advocating as a basis for similar loans by the United States gov ernment Any person owning landed property in the province could go to the bank and secure loan for half its value, which was to be fixed by the banks ap- praisers. The bank gave him mortgage bond called cedula, which was to run for twenty-four years, at from six to eight per cent. interest, two per cent amortization, and one per cent. commission. The inter est was payable quarterly, and there were coupons attached for the twenty four years. The cedulas were issued in alpha betical series, beginning with A and run ming to P. They were bought and sold on the Bolsa or Stock Exchange, and from their first issue became an important ele- | ment In speculation. The first issue of se- ries A was between thirteen and fourteen
 
 about ninety six cents of our money, be- | ing based upon the unit of the French | monetary system. These remained st par | for only short time after issue. They were quickly followed by others, until se- | ries A closed with a total issue of $27, ,394, | 900. Then came series B with an issue of | S1 ,002 ,000, series 0 with $S13, 1000, series D with s2SS, 900, all at seven per cent. Then came series E with total issue of $15, ,SS0, 900 at six per cent, and with a total issue of $6, 100, ,000 at seven per cent. Ten years after the banks establishment over one hundred million dollars of these cedulas had been issued, all based, be it remembered, upon the landed property of 6 single province. They had from the out set been used for speculative purposes, and every year this use became more wild and reckless. A ring was formed between di- rectors of the bank and certain favored
 brokers for the absolute control of the
 successive issues. No one could obtain
 application through these brokers, and in
 order that all the members of the ring
 might reap their share of the profit the
 value of the property upon which the
 loans were placed was raised to e1trava- | gant figures.
 The fictitious prosperity which the Fly.
 pothecary bank brought to Buenos Ayres
 insected the entire republic, and in 1884
 Congress passed a law annexing Nation
 al Hypothecary bank to the National bank
 which was the fiscal agent of the govern ment and of all the provinces except Bue
 nos Ayres. The issue of cedulas on tn, landed property of the nation was author ized, for fifty per cent. of its value, at in terest from six to eight per cent, witl
 two per cent. amortization and one pe , cent. commission, no single loan to exceed two hundred and fifty thousand dollars
 and all payable at the end of twelve years
 The issue of cedulas was at first limited
 to forty million dollars, but this was ex } vember, 1890, six years after the Nationa bank began the experiment, it had out nt
 less than two hundred and four million F dollars in gold, all bearing interest Tn 2 Buenos Ayres bank had increased its issu !, of cedulas so that at the same date 1t hat out no less than three hundred and thirt, , million dollars, but these were in paper making the grand total of money whicl
 had been loaned upon land in the repubh
 during seventeen years, five hundred ant F thirty-four million dollars, or oyer on F hundred and forty dollars for every man . | woman and child.
 When the National bank went into tn , hypothecary business in 1884 paper none l was at par with gold. Several sever g checks to the national prosperity wer l felt during that year. Cholera made ne cessary rigorous quarantine against Med , iterranean steamers and checked immigra > tion. Heavy floods during the fall de F layed the shipment of crops from the in terior to the seabosrd. A new govern
 ment loan of ninety million dollars was @ be placed, but the European market
 which was expected to take ten milliol :, dollars of it, was so nearly sated with Al " genuine investments of one kind or anoth r. CT that it declined to take more than $3, - 500, 900. !, In January, 1885, run began upon tn Q Provincial bank of Buenos Ayres, an, , compelled it to suspend specie payments - Whereupon the president of the republi o declared the national currency legal ten l. der. Gold rose at once to seventeen pc :, cent premium, and then to twenty pc | cent In February it had reached thirty 7 three per cent, and it continued to rs steadily till at one time 1t was ct thre