The National Mortgage Bank is strictly a governmental institution managed by a board of directors appointed by the President of the Republic and confirmed by the Senate. This bank issues national cedulas (real estate mort gage bonds). The transaction must not in amount exceed 50 per cent of the value of the lands. Loans are limited to $250,000 to any one person. These cedulas bear either 5 or 6 per cent interest, and, because this bank is a national institution, have the guaranty of the Argentine Republic. Some of the first issues were of 7 per cent, but all have 1 per cent amortization. They were principally held in Belgium, having been one of the favorite in vestments of the Belgian public. The total amount of cedulas issued is in the neighborhood of $200,000,000.
Argentine finances suffered from a crisis that began in 1913 and went on with increasing stress until the end of 1914 and the early months of 1915, when conditions began to im prove. The European War was, of course, a tremendous shock, which further unsettled the financial structure of the country, but which offered some compensating advantages in the form of increased demand and higher prices for the food products which Argentina was so abundantly able to supply. The situation in 1915 improved rapidly, and in 1916 decidedly favorable tendencies prevailed.
The national finances, collection of customs, stamp taxes, disbursements, and the service of the public debt are entrusted to the Depart ment of Finance; and the conversion office (Caja de Conversion) is charged with the maintenance, as we have said above, of the proper relation between gold and paper money, besides having in its care the national archives, the bureau of statistics, the national chemical office (established to enforce the national pure food law), the custom-houses, ports, and all banks.
The basis of the monetary system of Ar gentina is the gold standard. The unit is a gold peso, divided into 100 centavos, weighing 1.6129 grammes of gold .900 fine, or, say, 1.4516 grammes fine gold. Its par value, expressed in terms of United States currency, is $0.96475. The parity of $1 United States currency in terms of Argentine gold pesos is $1.0365. The actual currency of Argentina is government notes, to which a value of 44 per cent of the gold peso has been assigned by the government.
This parity of 44 per cent is maintained through the medium of a conversion fund which ex changes gold for paper, and vice versa, on the basis of $44 gold for $100 paper, or $227.27 paper for $100 gold. Therefore, since the value of the paper peso is fixed by governmental de cree and is maintained through the conversion fund, the paper peso represents 0.6387 grammes
of fine gold, and its parity expressed in terms of United States currency is $0.4245. The parity of $1 United States currency in terms of Argentine paper pesos is $2.35576 curso legal (paper currency). Bills of exchange on foreign countries are quoted in both paper and gold, but usually they are quoted in gold. When Buenos Aires quotes New York exchange on the basis of paper currency, the quotation rep resents the equivalent in United States currency of $1 paper peso. Thus, 42.50 means that $0.4250 United States currency is the equivalent of $1 peso, paper. When Buenos Aires quotes New York exchange on the basis of the gold peso, the quotation is expressed in gold pesos; thus, York sight $1.0375) means that $1.0375 Argentine gold pesos equal $1 United States currency.
The trade balance in favor of Argentina in 1915 was noteworthy : 331,000,000 Argentine gold pesos. Failures in the republic during the recent period of financial crisis are summarized as follows: Year 1912, assets $95,000,000 and liabilities $82,000,000; year 1913, assets $200, 000,000 and liabilities $173,000,000; year 1914, assets $603,800,000 and liabilities $422800,000; year 1915, assets $233,500,000 and liabilities $178,000,000. These figures, supplied to us by the courtesy of the National City Bank of New York, clearly demonstrate both the stress and the recovery mentioned above. The budgets at hand give us: Total estimated ordinary revenue for the year 1913, $342,292,894.54 curso legal; and for the year 1914, $361,773,132. The new budget, signed 22 Feb. 1917, appropriates the same amount as in 1916, namely, 381,000,000 paper pesos ($161,772,600). The latter proved to be excessive. The income for custom houses and port services during 1916 amounted to $118,587,979, against $108929,011 for 1915, and $133,352,488 for 1914. The total debt of the republic, 31 Dec. 1911 was $526,540,088 gold; at the end of 1912 it was $532,398,699 gold; on 31 Dec. 1913 it amounted to $544,820,000 gold; and on 31 Dec. 1914 it was $545,023,470 gold. We must add to the total for 1913 about $100,000,000 gold in order to approximate the amount of the public debt in 1915 and 1916.
Americas, The (New York 1914 et seq.), published monthly and giving reliable information; Cosby, J. T., Latin American Monetary Systems and Exchange Conditions' (New York 1915) • (Financial Con ference. Proceeedings of the First Pan-Ameri can> (Washington 1915) ; Funes, G., de la Historia Civil de Buenos Aires) (Buenos Aires 1856) ; Gonzales, V., Foreign Exchange> (New York 1914) ; Lough, W. H., (Financial Developments in South American Countries' (VVashington 1915).