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The funded national debt of the Argentine Republic was reported in November, 1881, at $107,982,592, and those of the provinces at $29,689,047, constituting a total funded debt of $137,681,639, or $57 per capita approximately. The foreign debt comprises $82,365,930 national, and $2,611,320 provincial (exclusive of the Buenos Ayres debt assumed by the nation). It is proper here to transcribe the following extract from President Roca's special message to Congress, under date of September 23, 1881, on the subject of the so-called $100,000,000 loan for the conversion of those debts. The total amount proposed to be converted is $76,588,323, and the effect of the scheme would be to reduce the present annual service (interest and amortization) from $8,570,432 to $5,414,187. TO THE CONGRESS OF THE NATION: If it was in carlier days necessary to discuss the prerogative which a nation enjoys of paying off its debts at any moment, that right is now, at least, an undisputed fact. The most advanced nations of Europe and the United States of America have exercised it amply, when compatible with the situation and public interests of the country. The question of convenience is evident,

since with a lesser sum the state can meet its obliga

tions to its creditors, and is enabled at the same time to attend to the usual public service, under a reduced system of taxation in the country, or place a larger capital to increase the wealth, comfort, and development of the nation. The opportune moment to realize these operations depends on a combination of many circumstances and complicated elements, not easily defined and specified, but which show in their results, by the improved credit of the state and the facilities for solving financial problems, that the opportunity has arrived to effect the vast operation of consolidation of the debt, in order to make it less onerous and more reliable for the sake of the creditor. I believe that this moment has come for our country, and every day

Debt to foreigners..
Treasury bills.
Treasury bills.
Provincial public funds.

Total..

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420,060 (law of the 5th of November, 1872), to pay In this table are not included the emission of $1,the shares of the National Bank subscribed by the Government, nor the $16,000,000 lately created by Congress to close the account of the nation with the laws, and the special conditions of the issuing of the Provincial Bank. The special object of each of these loans, besides their bearing 5 per cent interest, render it unnecessary to take the same into consideration. I also consider that they should not be included in the conversion, and therefore they do not appear in Article III of the project, neither do the deferred three per cent bonds created to pay overdue interest on the 1824 loan, nor the home debt created by the law of 1st of October, 1860. The relatively low interest of those bonds renders any explanation unnecessary in reference to them; and, as the last will be all paid off by amortization before the end of next year, I have deemed it unnecessary to include them, the more so as their amount is now comparatively insignificant. Thus, the total amount of home and foreign debts is to be converted into 76,588,323 hard dollars. If all the bondholders accept the equitable and even advantageous terms of conversion offered to them, should The interest and amortization on the public debt, you pass the project, the result will be as follows: which now cost $8,507,432, will be reduced to $5,414,187, and this will be further reduced by $239,999 before the end of 1882; and, in 1890, when the deferred bonds of the 1824 loan will be paid off, the total service of the debts will be an annual saving of $748,041

* Reduced to dollars at the rate of 4.88 per pound sterling, 6,123,526 48 hard dollars.

in interest and $2,396,242 in amortization. This reduction will, I consider, compensate for the advantages offered to the bondholders, who, on the other hand, in addition to the premiums, will have the security that their bonds can not be converted for ten years, excepting so far as 1 per cent yearly amortization, established by Article 1, goes. If, however (but that is not probable), holders refuse to convert voluntarily, there is nothing for it but to pay them off in cash, at par; and, in this case, I think the new 5 per cent bonds can be negotiated at a price that will give the same results as the voluntary conversion offered to the present bondholders. The operation can be carried out in a lump, or successively, as may suit the interests of the state; and if, by some inconceivable error, the bondholders totally or partly refuse to convert voluntarily, in a very short time the increase of public and private wealth, and the elements at the disposal of the nation, will show that the country has sufficient means wherewith to amortize, in a short time, at least the most onerous of its debts. The credit of the country at home and abroad is rapidly reaching the level it has a right to. Our debts religiously paid even in the midst of the greatest difficulties, brought on by our political errors and the effect of a commercial crisis, have gained confidence for us at home and abroad, and consequently our credit is improved and

increased.

JUAN JOSÉ ROMERO.

JULIO A. ROCA.

It was regarded as probable that the project would be passed, there being a majority in its favor in both Houses. Another important bill brought during the session was one for the abolition of forced inconvertible paper money, and the success of which was looked forward

to as all but certain; indeed, the sanguine went so far as to predict the return to specie payments by the end of the year.

66

"We are in the habit," writes a British financier, of saying the number of paper dollars to the pound has fallen 10, from 149, at which they were this time last year, to 139;

the par

but a telegram has been received this week informing us that they have very recently descended to 127, or only 5 above par, value of the paper dollars being 122 to the pound. We have long said that paper and gold in the Argentine country would come to a level, as they have in the United States. Paper has now arrived at that standard, saving 5 dollars on 122. The fact is most important to the railway and tramway interests of that country. It is also important to the country itself, and its creditors. It affords a further assurance, if any were wanted, of the perfect good faith of the Argentines toward their bondholders. When their 6 per cent bonds were at 30, they never failed to pay the full interest and apply the heavy sinking fund. Now, that those cloudy days have passed away, the country is at peace, prosperity in a full blaze, and money matters are easy, of course the case of the bondholders is better than ever. The old 6 per cents have reached a premium. But we can not say that the Argentines have managed their financial matters well as to raising new loans. The recent Paris loan of £3,000,000 ($12,000,000) for railway extension was raised at 82, and the more recent Lon

* October, 1880.

don loan for similar purposes of £2,450,000 was placed at 91 per cent. Both these prices seem high for 6 per cent Argentine loans, especially when the old loan was at par or a premium. The last London loan, issued at 91 price, is really better than the old 6 per cent loan, which commands par or a small premium, since the heavy accumulative sinking fund of the old loan is rapidly paying those bonds off at par. The 1868 6 per cent loan has already been nearly paid off, and will be entirely extinguished by 1889. Therefore, those 6 per cents can never go to much premium. But the new 6 per cent loan, whose security is just as good, has an accumulative sinking fund of 1 per cent, which discharges the principal at par in 33 years. Therefore, these bonds may reach a higher premium than the old, for their time of repayment at par is much more distant. The credit of the Argentines being so sound, and the prosperity of the country so great, we should have thought that 6 per cents could have been placed at par. The Buenos Ayres Great Southern Railway 6 per cent debenture and the Central Argentine Railway 6 per cent stock is at 120 with the dividend just off, debenture stock at the same price, at which the purchaser only gets 5 per cent for his money. The government security may never stand so high as the railway, but there would have been a wide difference if the government 6 per cent stock had been placed at par, the railway 6 per cents commanding 20 per cent premium.'

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The new departure in Argentine foreign commerce referred to in the "Annual Cyclopædia for 1880 (p. 21), namely, an excess of exports the year following the one alluded to in that over imports, ruled in a still higher degree in marks President Roca, "with what we forvolume. Ships now leave our ports," remerly imported, and each successive year we have some new product to export. Here is one fact: 4,000 tons of flax shipped from the country between January 15th and April 15th this year."

Argentine 1868 six per cents were quoted in London at 101 to 1024 on December 22, 1881. These securities first reached par in December, 1880.

The subjoined tables show the values, sources, and destinations, respectively, of the exports and imports for 1880:

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Of railways there were ten in operation in 1881, of an aggregate length of 1,545 miles; and in course of construction three other lines, aggregating 190 miles. Of telegraph lines there were, in 1877, 4,848 miles (3,365 miles of which were the property of the state), with an aggregate of 9,887 miles of wires. The number of dispatches in 1879 was 242,259, of which 42,636 were official; the receipts having been $165,266, and the expenditures $169,266. In 1879 the number of letters that passed through the post-office was 6,696,328, of which 1,494,854 were official; and that of packages of printed matter 11,152,089, of which 457,913 were to or from foreign countries.

On the occasion of the opening of Congress, May 8, 1881, President Roca, in a long but unusually interesting message, presented an elaborate sketch of the country under its various aspects-political, financial, commercial, industrial, and intellectual. Here follow a few brief extracts from that document:

MESSRS, SENATORS AND DEPUTIES: As you are aware, peace, order, and complete liberty, with every prospect of a long duration, prevail all over the republic, and our credit has reached every country and market in Europe, where they are at last beginning to believe that we have reached the years of discretion and common sense. The uncertainty in which we were living, even in times which were apparently the most tranquil, has been succeeded by a most boundless confidence in the future. Life, movement, a spirit of progress, and a love of work, have sprung up in all parts. The provinces are no longer armed in defense of their autonomy or against revolution, but are occupied in political, social, and economic reorganization, improved administration, agriculture, irrigation, roads, banks, and all kinds of improvements.

The session before you is full of work to be done. It is as if we were a people newly born, as you will

*See "Annual Cyclopædia" for 1880, p. 21.

have to legislate on the attributes, means, and authority of the nation-so great was the want of a permanent capital for the republic. Now you may make laws in full liberty, knowing that they will be obeyed, and without consulting anything but common sense, justice, and expediency, or fearing that any provincial governor should enter these halls to protest against or dictate your measures.

The Executive is in perfect accord with the authorities of all the provinces, and not even the slightest hitch has occurred in the working of the liberal and complicated laws of our political system. The law ordering national intervention in Rioja resulted in a speedy and satisfactory solution, thanks to the clear terms in which the orders of Congress were expressed, and the tact and prudence of the commissioner appointed. I feel pleasure in telling you that the republic is on the best terms with all foreign powers. We can easily keep so, as the fundamental principle of our foreign policy is a determination to defend our rights and to respect those of others.

The Executive and the whole country have witnessed with profound sorrow the horrible drama on the Pacific, the ruin of two sister republics, and the gulf dug between three nations of the same blood, who should be united for mutual advancement, instead of tearing each other to pieces. For this reason the mediation of the United States Government in October last was so joyfully hailed by public opinion. We had a right to hope that such a powerful and respected nation would be able to bring about peace between the belligerents, and only when it failed did I deem it right to make a fresh attempt at conciliation, with the aid of a South American state which, being tinent, and for other reasons, I considered the best on the best of terms with the republics of this conwherewith to initiate a fresh attempt at friendly interference. The Minister of Foreign Affairs will reThe port to you the result of this negotiation. Governments of Peru and Bolivia addressed that of strife, and protesting against the terms of peace prothis country, denouncing the bitter character of the posed by Chili. In its turn the Chilian Government sent us the protocols of the conferences at Arica, explaining its line of action, and declaring that it sought no conquest. I trust that, after the recent battles, decorous and satisfactory bases of peace may be arrived

at.

The reclamations made by the legations of the belligerents here have been impartially attended to, with due regard to the exigencies of those at war and the rights of those who, in peace and tranquillity, remain strictly neutral.

The Colombian Government asked us to send a

representative to the conference at Panama, to introduce the principle of arbitration into American international law. Our relations with Brazil are perfect. served, and the efforts of some uneasy spirits fail beThe treaties which guarantee them are strictly obfore the circumspection and foresight of both Governments. We must definitely settle our boundaries with ing line, through mysterious and deserted forests, is the empire. It is a joint work, and, once the dividtraced, the science and civilization of both countries will soon break in on their solitude. In more peaceful days for Bolivia we can also settle our boundaries with her. We maintain with Uruguay the good relations natural between nations whose blood and interests are identical, and any differences that arise are promptly settled with good-will on both sides. Paraguay has broken off her commercial treaty with this country and Brazil, but this shall not alter our wishes for her prosperity.

The Holy See, and the American and European Governments, send us frequent proofs of friendship. I will lay before you this year several conventions which will consolidate our good relations with those powers.

I have the utmost confidence in the rectitude of our foreign policy. Nothing shall divert us from the principle of peace abroad and the firm assertion of our

rights. Our native land, whole and without a stain, shall link us equally with the past and the future.

The credit and wealth of the nation are apparent in every way, now that it is felt that peace and order are firmly established. The receipts at the custom-house in the capital for the last six months exceed by 1,045,500 hard dollars those in the same period of the previous year. Our bonds have reached the highest quotations in London, while here there is no price, as nobody will sell. Ships now leave our ports with what we formerly imported, and every year we have some new production to export. Here is one fact: 4,000 tons of flax shipped at the Riachuelo between 15th January and 15th April this year. The gross revenue of the national railways was $805,379. The Central Argentine Railway is now beginning to return what it received as guarantee. The balance in favor of government in 1880 was $130,993. The shares aro at a premium in London. The mint is finished, and might have been at work, but the Executive decided to wait to lay before you some measures to meet difficulties that have arisen since you passed the coinage act. The abolition of forced currency and a uniform circulating medium are of primary interest to the country. Forced currency and privileges are against the spirit of a free government and the Constitution, which guarantees freedom of trade and industry; they also drive away foreign capital, disturb business, and inflict enormous loss on the Treasury. Every effort that Congress and the Executive can make to free the country from this burden will be amply repaid. The day on which we get a uniform currency, and are free from inconvertible paper and privileges, there will be an immense influx of foreign money. Bad coin, like the primitive languages of America, is not a means of civilization, and, if we have progressed in spite of monetary chaos, it is solely due to the exuberant vitality of the country.

The twelve-million loan, authorized in October last, for railway extension in the interior, was successfully contracted for with Paris bankers at 82, and the works are progressing. As you will see in the Finance Minister's report, it is the first loan launched here (and perhaps in South America) direct, and with special commissions.

The National Bank, reorganized in 1876, shares the general prosperity of trade. The price of its shares shows its improved credit, and it will be of much greater service in the interior when the monetary con

fusion that interferes with the circulation of its notes shall have disappeared.

ARKANSAS. The biennial session of the Legislature commenced in January. The financial affairs of the State occupied considerable attention. A State Board of Finance was created, consisting of the Governor, the Treasurer, and the Auditor, and is empowered to borrow money to meet the expenses of the government by pledging the State's bonds, which shall not be hypothecated for a less amount than three fourths of their face value. The debt thus contracted is to bear no higher rate of interest than 6 per cent per annum, and is to be payable in two years. A senatorial commission was appointed to examine the Auditor's and Treasurer's books, upon the suspicion of a default in the Treasurer's accounts. That officer's honesty was not impugned, however, by the instigators of the investigation.

A law was passed, prohibiting the sale or giving away of intoxicating liquors within a radius of three miles from any church or school-house in the State.

The Legislature passed one measure which

promises to be effective, if enforced rigorously, in diminishing a class of crimes for which the State has borne an evil reputation. It is the so-called "pistol bill," which makes it a misdemeanor, punishable by a heavy fine, to sell or to keep for sale, or to furnish in whatever manner to any person, any species of sword or dagger, or any kind of pistol, excepting the regulation navy revolver. It also prohibits the carrying of deadly weapons of any sort, except the wearer be on his own premises, or on a journey, or be an officer of the law. Officers and justices of the peace are subject to like penalties for neglecting to arrest or to entertain proceedings under the act.

A law to protect the public against unqualified medical practitioners requires every person desiring to practice as a physician or surgeon to prove his or her qualifications before a county board, and to be registered in the office of the county clerk. Persons denied registry may demand an examination, as to their proficiency, by a State medical board.

The law relative to larceny was changed so as to make thefts of property under the value of ten dollars petty larceny only, the law having been excessively severe, thefts of above two dollars being punished as grand larceny.

Arkansas is still one of the most backward States in educational facilities. The publicschool appropriations amount to only $205,000 per annum, being considerably less in proportion to the school population than is spent by any other State. Congress has granted over 1,000,000 acres of land to Arkansas for school purposes. In some sections the State fund is supplemented by liberal local levies. Considering the facts that the public-school system was not established until 1868, and that in 1870 only 75 per cent of the adult population could read and write, substantial educational progress is being made. The State tax for school purposes is only two mills on the dollar. The local tax raised in the individual districts is determined by popular vote every year at an annual school-meeting. The tax usually voted in the more progressive districts is five mills. Some depend solely on the scanty allowance afforded by the State fund.

A state of violence and intimidation, in which the authority of the law was superseded, prevailed for several months in Perry County, terminating in the assassination of J. L. W. Matthews, editor of the "Fourche Valley Times." The judicial acts of County Judge Harris had been murmured at by a group of citizens, who complained that the murdered man had procured or influenced obnoxious proceedings. One day a band of armed men rode into Perryville, and frightened the judge from the bench by their menacing appearance. The Governor was appealed to, and General Newton, of the militia, visited the county, but found no outward evidences of lawlessness. There were no further disturbances until the evening in July on which Matthews was shot. Judge

Harris received at the same time a notice of warning to leave the county. Through fear, the sheriff and magistrates refrained from instituting proceedings against the suspected murderers, appealing to the Governor to restore order. Two detachments of militia were sent into the disturbed district to protect the civil officers in the discharge of their duty. The arrest and commitment of the prisoners took place under military guard. A guard of State soldiery was posted in the town for several weeks to preserve order. Similar lawless developments occurred in Polk County, though of a less serious character. Writs of the court were defied, and the sheriff threatened. Exhibitions of mob-law have not grown less frequent in Arkansas. Various cases of the infliction of vengeance on supposed criminals by bands of lynchers occurred in 1881, as in former years. Instances of the violent seizure of prisoners in legal custody, and the wreaking of popular rage upon their persons, continue to take place. These manifestations of lawlessness accompany, as usual, a high rate of crime, especially of the crimes against the person which spring from anger or revenge, or reckless bravado. The customary difficulty of procuring salutary convictions for serious assaults of this character still obtains. There are many signs, however, of a rapid reformation of the manners of the people in this respect. This tendency is clearly reflected in the expressions of the press, and in the attitude of the influential classes of citizens. The strict and judiciously framed law against the unwarranted carrying of deadly weapons, passed at the last session of the Legislature, indicates the vigor of the movement. The recent temperance legislation had for its principal motive the desire to prevent violence and crime. An active agitation, which wins a remarkable moral and numerical support, is now being carried on in favor of stringent restrictive or prohibitory enactments to suppress the liquor-traffic. This movement takes rank with the debt controversy as a leading political question. It has its root in the determination to redeem Arkansas from its reputation for savagery and anarchy; although the majority may condemn a prohibitory law, as unnecessary or impracticable.

The question of the repudiation of a part of the bonded debt of the State has rendered imminent a disruption of the Democratic party. The plan of resettlement embodied in the Fishback amendment, so called, which was rejected in the general election of 1880, is earnestly approved by a large section of the party, while the other branch includes its most decided opponents. Neither faction can sacrifice their liberty to speak and vote according to their principles in this question, while both are equally anxious to preserve the party organization in order to prevent the administration from falling into the hands of the Republicans. It was proposed, therefore, that at the Democratic Convention of 1882, a State ticket should

be nominated which should be supported by both divisions of the party unitedly, and that a resolution should be adopted, calling for a constitutional convention for the settlement of the debt question. Every member of the party should be guided by his own convictions on the debt question in the canvass for the Assembly elections, and in his action with reference to the Constitutional Convention. The Democratic State Central Committee, in a meeting in May, concluded to bring forward in the State Convention a proposition for an amendment which would not invalidate the objectionable bonds, but would yet prevent their funding or payment without the express acquiescence of the people. The purport of the proposed amendment, by which it is sought to stave off the question and avoid a final committal of the party, is expressed in the following first draft to be submitted to the party convention in the beginning of 1882:

1. Hereafter the General Assembly of this State shall be prohibited from making any settlement or adjustment of the bonded debt of this State, based on what ford bonds, which shall be binding upon the State, is known as railroad-aid bonds, levee bonds, or Holuntil such adjustment shall have been submitted to and voted upon by the qualified electors of this State by the next succeeding general election after such act have been ratified by a majority of the qualified electof adjustment has been passed, and the same shall ors voting at such election.

2. That no act of the General Assembly of this State, which may hereafter be passed, making an appropriation to pay off any part of the principal or interest of any of the bonded indebtedness of this State, based upon what is known as railroad-aid bonds, levee bonds, or Holford bonds, shall be binding on the State or paid from the Treasury until such act shall have been submitted at the next succeeding general election after such act of appropriation has been passed to the people, and the same shall have been ratified by a majority of all the qualified electors voting at such election; and they further recommend that no action on said indebtedness be taken by the General Assembly until such amendment shall have been submitted to a vote of the people.

The financial troubles of Arkansas date from its first erection into a State in 1836. A State Bank was organized, and authorized to issue $2,000,000 of bonds, and further credit was obtained by means of a real-estate bank, whose $1,500,000 of bonds were guaranteed by the State, and secured by the public lands. Both institutions suspended payments in the second year. This was the commencement of the State debt, the unskillful management of which has ever since impeded the progress of the State. The State debt matured in 1862. Since the restoration of self-government in 1869 the weight of public sentiment has favored the evasion of the vast liabilities which it would still tax all the resources of the State to discharge in full. The debt contracted in waging war against the Federal Government was declared void. Its repudiation was followed by a series of defaults on other obligations. The levee bonds were decided to be unconstitutional by the Supreme Court in 1878, and all the railroad-aid bonds have since been declared

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