FINANCE. The economic progress of Argentina has been accompanied throughout its course by extremely unfavorable financial conditions. The chief cause of the unsatisfactory state of public finance has been the inordinate increase of ex penditure, which was incurred without reference to the capacity of the people to shoulder new burdens. All thoughtful students of Argentine affairs unite in the opinion that the politicians of the country embarked with too light hearts on all kinds of undertakings—some productive, others wasteful and useless, and, to make mat ters worse, time administration of the budget was until recently extremely loose. In 1S70 the total budget of the Government was $12,635.000; in 1880 it was $16,815.000, or an increase of 33 per cent, in one decade; in 1890 it was $71,508, 000, or a further increase of 325 per cent.; and in 1900 it was $95.000.000 paper and $33,000,000 gold, or reducing it all to a paper basis, $19I, 000,000, or a further increase of 171 per cent. Dr. Albert B. Martinez, formerly Assistant Min ister of Finance, ascribes the great increase in public expenditure to the following principal causes: (a) Increase of administrative func tions, due to rapid growth of population: (b) increase of public debt; (c) depreciation of paper money: (d) wars, foreign and civil; (e) guar antee by the State of the payment of interest on costly public works: (f) imperfect administra tive machinery: (g) defective control of public expenses, etc. In 1890, on the eve of the great financial crisis, the revenues of the Republic amounted to $73,408,000 paper, as against an expenditure of 892,854.000. The enormous defi cit. together with the general unsettled financial condition of the country, forced the Government to suspend payment on the national debt, and during the following years the revenue continued to decline. Although since 1895 the revenue has been steadily increasing. the expenditure con tinued to be in excess of it, as is shown by the following, figures: Of the total revenue, import duties furnish less than one-sixth, the bulk of the revenue being derived from excise taxes on spirits, \vines, and tobacco (one-fifth), land and stamp taxes (about 7 per cent, of total revenue), proceeds from rail ways, telcgra pits, and posts (about 0 per cent, of revenue), and a number of other taxes. The in
crease of internal taxation took place in the early nineties to close the widening gap in the na tional finances, created by the growing deficits, and to put the country in a position to resume payments on the debt. The growth of the Ar gentine debt during the last three decades of the century was in round figures as follows: 1S70, $47,000,000; 1880, $85,000,000: 1890, $353,000, 000. In 1000, according to the report of the 10 mister of Fina nee, the total debt exceeded $440,000,000, and was distributed as follows: External debt, 380,004,1 IS pesos gold; inter nal debt, 9S,751,300 pesos paper, 0,375,000 pesos gold.
The annual service of the debt required more titan M27,000,000 in gold, or nearly one-half the revenue of the country. That the Government was unable to meet its obligations is shown by the large deficit in one of the foregoing tables. According to the agreement entered into by the Argentine Government with Lord liothschiId in 1893, it was practically relieved from payment of interest for fire rears (the interest for that period being converted into a new debt), and was to pay interest alone from 1898 to 1901. On .lanuary 12, 11101, the full payment of interest and sinking funds was to he resumed. Not withstanding the respite thus secured,the finances of the Government in 1901 continued to he as little satisfactory as before 1593. The chief items of expenditure are: For the army and navy, service of the public debt, Department of the Interior, Department of Justice and Public lnstnution, and Department of Finance. In spite of tite cry of economy raised since the great crisis of IS90, the cost of the army and nary has gone up from 11,000,000 pesos in that year to nearly 29,000,000 pesos in 1897; pensions, from 1.587.000 to 3,496,000 pesos; justice and public instruction, from 8,303,000 to 14,103,000 pesos; and the administration of the Depart ment of the Interior, from 19,525,000 to 24,801, 000 pesos.