Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-06
Further Exports of Gold
Would Embarrass Republic
in Difficult Situation.
COMMERCE HAS Jagged
AS INVESTMENTS GREW
But Nation Has Shown Inherent
Honesty as Debtor to
United States.
BY DR.. MAX WINKLER.
Special Dispatch to The Star.


the Argentine Republic celebrates the
flrst anniversary of the revolution, which
TOOK place on September 6, 1880, result
ing In the overthrow CT the Irigoyen
regime and the establishment OF a pro-
visional government under Uriburu.
Inc enthusiasm with which the
change was received in the United
states found expression in loan to
Argentina. extended by New York bank
ing houses to the extent Of $4,000 900
for one year, at per cent, or on terms
lower than those ever accorded the Ar
gentine Republic within Is years.
Not since 1914 has Argentina been
able to borrow en- more satisfactory
terms; Early that year. $4,000. 600
was obtained in London on 1888 per
cent basis, About three years later the
National City Co. OF New York made its
debut as a lender to Argentina, grant,
ing the republic a shcrt-terms loan on
6.185 per cent basis. In 1916, Hall
garten & Co.. of New York, loaned
money to the government on 6.278 per
cent basis.
Other Loans Underwritten.
In 1925, Blair & Co. underworld a
short-term Argentine loan en- 534 per
cent basis. This was followed by loan
arranged through the Morgan firm on
For the period 1925-l923. J. P. Nor
gan e. Co. were the bankers for Ar
gentina and leans arranged on behalf
OF the government were at rates vary
ing from 5.128 to 5.788 per cent. In
April of last year. the Chatham &,
Phenix arranged a $4,000. 900 issue on
SOB per cent basis which was refunded
by the one-year 5 per cent issue referred
to above through the banking firm Of
RYOWn W EAI ,r,;A 4,
the Hartman interests.
1t is this issue which has been caus-
ing appreciate embarrassment. not
only to Argentina. but to the bankers
The past year has been most trying to
the southern republic. Her economic
and financial condition has not i'm
proved sufficiently to enable her to re-
pay. without serious inconvenience, the
$50 100000 lean. To be sure, she still
possesses large stock of gold. appar-
entity the only means CT discharging her
debt. and American bankers see no rea-
son why the gold could not be shipped
here in settlement. ignoring entirely the
consequences of an economic nature re-
sultlng from shipment Of such pro-
Portions
At this time Argentina could but III
afford to part with more gold The DO
sition Of the peso is not particularly
by large reserve ratio. confidence is
lacking. and the further export of the
yellow metal will merely tend to ag-
gravate an already difficult situation.
Is not this going to affect rather Sc
rlouSly future MISUNDERSTANDING COM
mercial relations? Would it not be
desirable If United States bankers.
whose vaults are filled with gold TO
OVERLOOKING. could see their way clear
IN, 1AAy
a comeback. rather than impede her
rehabilitation2 Americas stake in Ar
gentina and her trade with the country
are certainly substantial enough to war
rant bankers giving serious considera-
ton to the advisability of not pressing
too hard a harassed but inherently
honest debtor.
American Investments.
Prior to the war American invest
mentS in Argentina aggregated only
$40,000000, while American-Argentine
commerce totaled 500, $50 900, of which
$72,458000 represented exports to and
$24. 402 900 imports from Argentina. In
other words Americas trade with her
southern neighbor showed in 1918
balance in favor of the United States
aggregattng more than S48000,000.
At the beginning of the current year
American investments in Argentina
were estimated at 1911 ,169, 900, larger
than those in any of the South Amer
lean republics and exceeding Americas
with the exception of Cuba. Against
this 22-fold increase, as compared with
the pre-var figure, Americas trade
with Argentina in. 1880 was only
slightly in excess of double the 1918
figures. Last year the United States
exports to Argentina amounted to
about $4,000 900, while imports to-
tailed somewhat less than $72, ZOO, 900,
resulting in a balance Of trade in
favor Of the United States of about
$50. 900 600.
Great Britain's investments in Argen-
tina have, during the same period. in
creased from 1880, 700.o0o to $2,14O,-
100000, a gain of slightly more than
is per cent; while British-Argentine
trade last year amounting to almost
$500 900 900, shows relatively little
change as compared with the pre-war
total of $409 ass, 900. In 1880, the bal
ance of trade was in favor Of Great
Britain to the amount of more than
$153. 900, 900. against an adverse bal
ance for the United States of about
$50, 900, 900.
ADEQUATE Return Difficult.
These figures might possibly indicate
that Great Britain is somewhat more
logical place for Argentina to seek finan-
cial accommodations than the United
States. However both American and
British investments in the Argentine
Republic appear to have grown faster
than their commerce, and it Is not en-
tirely unreasonable to venture the sug-
gestion that both the United States and
Great Britain have reached a point
where the additional placement of funds
should be very carefully scrutinized, be-
cause it is becoming increasingly diff
cult for the southern republic to provide
an adequate return to foreign capital.
This should not in any way be in
terpreted as a warning against addi-
tional placement of funds in Argentina.
It does, however, mean that If further
investments are to be made. they
should be for strictly constructive pur-
poses. and that their proceeds should,
within a reasonable period OF time, be-
come revenue producing.
(Copyright, 1881. by North American News
paper Alliance, 1nc.)
U. S. TREASURY BALANCE.