Since the loan of 1882, the first financial operation of marked and conspicuous impor tance negotiated with the banks of the United States was an advance for a short period of $15,000,000 made in 1914 by the National City Bank of New York and its associates. Its sequel was the new issue made in 1915 by the same bank and its associates for a further amount of $25,000,000, the object of the second issue being the retirement of the first advance of $15,000,000; and it must be understood that the issue by the National City Bank and its associates was part of a loan of $50,000,000 of which Messrs. Baring Bros. & Co., of London, issued the other half in London. With this loan for five years, a number of small advances have been retired.
La Caja de ConversiOn was created by national law in the year 1896. Its duties have relation to the exchange of used notes for new; the receipts of gold and issuance of paper money for its legal value (44˘, gold, per dol lar), or, vice versa, the conversion of paper into gold at the same rate; the exclusive con trol of the printing and issuing of the cur rency of the country, etc. When the Caja de Conversion was created the circulation of cur rency in the republic was about $300,000,000, but to-day it is about $600,000,000; the gold value is about $425,000,000, and against this there is in the vault nearly $300,000,000, or about 70 per cent of the notes issued.
Development of Argentine Banking.— And now a few words in regard to the Argen tine banking system. During the early years of the independence of the country a number of banks were established, although the old Bank of the Province of Buenos Aires, founded in the year 1802, continued to lead them all. This was a bank of issue, having fiscal privi leges, and became a very powerful institution. It was, indeed, the pioneer and founder of the wealth of the country, its useful practice be ing to loan its money at low interest, with a 5 per cent amortization each three months, to the farmers and owners of land, enabling them to improve and develop the ranches. By such means did the principal land owners of Argen tina make their fortunes. This bank had close relations with Messrs. Baring Bros. & Co., and became very powerful, having large credits in London and controlling the exchange market for many years; nevertheless the financial and political crisis of 1890 caused its suspension, and years passed before it was reorganized with a capital of $30,000,000. TQ-day it is half-owned by the province of Buenos Aires and half by private shareholders. In the year 1873 a group of wealthy citizens organized a national bank, the government contributing half of the capital, and for many years this was a powerful institution, helping the develop ment of Argentine industries, such as the sugar in Tucuman, the wine industry in the provinces of Mendoza and San Juan, and agriculture in the province of Santa Fe. This
institution also experienced financial difficul ties in the crisis of the year 1890. During Dr. Pellegrinis administration, in the year 1891, the Banco de la Nacion Argentina was created, with a capital of $50,000,000 currency (this bank taking over the liquidation of the Banco Nacional). It is an entirely official bank, and. one of the articles of its claw of creation' con tains the provision that all the net profits are to be applied to the increase of its capital. To-day that capital has reached the sum of $128,000,000 paper, equivalent to over $60,000, 000, currency of the United States and the bank has besides a reserve fund of $14,500,000 in gold. The management does not sustain such relations of dependence upon the national government as the circumstances that the di rectors are named by the President of the re public, and their nominations require confirma tion by the national Senate, would seem to indicate. It has over 150 branches in Argen tina and is constantly increasing the number, following the growth of the nation. It has no agencies abroad, although its financial relations with the principal banks and bankers of the world are being increased every year, and it now has very friendly relations with some of the principal banks of the United States. Its deposits have reached over $300,000,000 gold, and during the universal financial difficulties of 1915 it helped the commerce and industry of the republic, which would otherwise have suf fered more severely from the restriction of credits caused by the war.
Beside the Bank of the Nation and the banks of the province of Buenos Aires to which we have referred, there are several private banks, formed solely with Argentine capital, which are very prosperous institutions and have been created as the requirements of the country demanded such as the Banco Espanol and Banco de Italia del Rio de la Plata, whose combined capital is over $80,000,000 (gold). There are also several foreign banks which have aided materially in the development of the trade of the country. One of the first of these was the Bank of Maua (now liquidated), es tablished in Buenos Aires and Montevideo about 1855. The very important London and River Plate Bank was founded in the year 1862. Since that date the following have been established: The London and Brazilian Bank, The British Bank, Anglo-South American Bank, two German and several other banks, in cluding Italian, Spanish and Dutch, with a total capital of about $300,000,000. The most re cently established is the agency of the National City Bank of New York.