The South American Republics Volume I Part 5

besieged the colorados in Montevideo and controlled the country districts. This apparently ended all hope of expelling Rosas from power.

The emigration of the intelligent and high-spirited youth of Buenos Aires to Montevideo and Chile increased. Among these exiles and martyrs to their devotion to const.i.tutional government were many Argentines who shortly rose to the top in politics and whose abilities gave a great impulse to the intellectual movement. Among them were Mitre, Vicente Lopez, Sarmiento, Valera, and Echeverria, who share the honour of establishing civil government in Buenos Aires, and who aided Urquiza in preventing South America from becoming a military empire, and in uniting the Argentine province into a stable nation.

[Ill.u.s.tration: BUENOS AIRES IN 1845.

[From a steel engraving.]]

The longer the tyrant reigned, the less men remembered their own factional divisions. Practically the whole civil population of the capital was ready to support a rebellion. Rosas, however, was to fall, not by a revolution in Buenos Aires, but because his system was inconsistent with the local autonomy of the provinces. He put his partisans into power as military governors, but no bond was strong enough to keep them faithful to his interests. As soon as they were well established in their satrapies, they became jealous of their own prerogatives and of the rights of their people. Rosas ceased to be a real federalist when he made Buenos Aires the centre of his power. He lived there, he raised most of his revenue there, and the city's interests became in a sense synonymous with his own. He excluded foreigners from the provinces, he forbade direct communication between the banks of the Parana and Uruguay and the outside world. Everything was required to be trans-shipped at Buenos Aires so that it might be subject to duty.

The chief lieutenant of Rosas was General Urquiza, whom he had appointed governor of Entre Rios. The latter's generalship overcame the unitarian rebellions in that province and repelled the invasions from Uruguay.

Under his wise and moderate rule the province flourished and recovered from the devastations of the previous civil wars. Its fertile plains were covered with magnificent herds of cattle and horses, which fed and mounted an admirable cavalry. Urquiza himself was the greatest rancher in the province and could raise an army from his own estates. Entrenched between the vast-moving floods of the Uruguay and Paraguay, he was practically safe from attack, and his relations with his neighbours in Corrientes, Uruguay, Paraguay, and Brazil were those of warm friendship and alliance, as soon as he had declared against the tyrant, who, seated at the mouth of the Plate, cut off the countries above from free access to the sea. Though Urquiza was a caudillo he had no such ambition for supreme power as plagued Rosas. He was even-tempered, of simple tastes, and careless of military glory.

In 1846 the rupture between him and Rosas came, and thenceforth he devoted himself to the overthrow of the tyrant. Three times his attacks failed; but, in 1851, he arranged an alliance with Brazil and with the colorado faction in Uruguay. The war was opened by Urquiza's crossing the Uruguay and, in conjunction with a Brazilian army, suddenly falling upon the blancos, who, in alliance with Rosas, were besieging Montevideo. Most of the defeated forces joined his army, and accompanied by his Brazilian and Uruguayan allies he recrossed the Uruguay and moved over the Entre Rios plains to a point on the Parana just at the head of the delta. The Brazilian fleet penetrated up the river to protect his crossing, and on the 24th of December the entire force of twenty-four thousand men, the largest which up to that time had ever a.s.sembled in South America, was safely over and encamped on the dry pampas of Santa Fe. The road to Buenos Aires was open. Rosas could do nothing but wait there and trust all to the result of a single battle. On the 3rd of February he was crushingly defeated in the battle of Caseros, fought within a few miles of the city. Of the twenty thousand men he led into action half proved treacherous, and many of his princ.i.p.al officers betrayed him. He took refuge at the British Legation, and thence was sent on board a man-of-war which carried him into exile.

CHAPTER VIII

CONSOLIDATION

After forty years of struggle no formula had been found which would satisfy the aspirations for local self-government and at the same time secure the external union so essential to the welfare of the whole country. The questions between the provinces and Buenos Aires, and between the different cities which were rivals in the race for national leadership, seemed to a superficial glance to be as far as ever from solution. There had, however, been a shifting of the material balance of power which was soon to change the situation. The provinces had suffered most severely from the long civil wars. Corrientes was well-nigh a desert, in Santa Fe the Indians roamed up to the gates of the capital town, and the Andean provinces were isolated and poor. The long peace under Rosas's rule had increased the wealth and population of Buenos Aires. The city lost hundreds of enthusiastic young liberals, but it gained thousands who fled from the disorders of the interior. Its population had doubled since his accession. Thirty thousand English, Irish, and Scotch had crowded in to engage in sheep-raising, and the rural population of Buenos Aires province was nearly two hundred thousand. City and country together had doubled, while the rest of the confederation had only increased one-half. The capital province now contained twenty-seven per cent. of the total population, and the disproportion in wealth and percentage of foreigners was far greater.

The number of sheep increased from two and a half million in 1830 to five times that number, and by 1850 there were eight million cattle and three million horses in the single province.

All over the country rational ideas about government had made progress.

The people were thoroughly sickened of military rule. Civilisation, education, and general intelligence were spreading their beneficent influences; industry, commerce, and the pursuit of wealth were absorbing more of the national energies.

Urquiza, greatest of the caudillos, saw that without peace and union Entre Rios could not be insured prosperity. He had no sooner entered Buenos Aires than he took measures looking to the framing and adoption of a federal const.i.tution. After his victory he was named provisional director of the confederation, but he showed no wish to play the role of a Rosas. All the governors met and agreed to the calling of a Const.i.tuent Congress, in which each province was to have an equal vote.

As a further precaution against the predominance of Buenos Aires the session was to be held in Santa Fe. The provinces were anxious to form a strong federation and the only opposition came from Buenos Aires. Her statesmen did not realise that she was bound to be the centre of the system and that the pull of her superior ma.s.s would, before many years, be sufficient to control the aberrations of the satellites. Though the governor of Buenos Aires had agreed on behalf of his province, and though Urquiza's military power was overwhelming, the legislature of that province refused its a.s.sent. It was clear that Buenos Aires and the other provinces would not be able to agree upon a basis of union. The ambitious cities of the interior each aspired to take the place of Buenos Aires as the capital, and to this humiliation the latter city would never submit unless after another civil war.

Urquiza determined not to use force, and retired to his ranch. As soon as he was out of sight, the city rose in arms against his nominees. The broad-minded Entre Rios chieftain sent back word that he had won the battle of Caseros for the sole purpose of giving Buenos Aires her liberty and that he would not now intervene to prevent her making the use of it she chose. He even disbanded his troops. However, when the Buenos Aireans marched an army to the attack of Santa Fe where the Const.i.tuent Congress, attended by delegates from all the other provinces, was holding its sessions, he again took the field. A counter-revolution broke out in the rural districts of the Buenos Aires province against the faction dominant in the city. Urquiza joined his forces to theirs and besieged the town. A land siege was useless without a blockade on the water side, and Urquiza tried to establish one. He was unsuccessful because the commanders of his ships treacherously betrayed him, surrendering to the city party for a heavy bribe. He raised the siege and retired to the northern provinces.

Buenos Aires virtually declared her independence of the other provinces by this action, but the latter took no further steps to force her into their union. Urquiza and his followers had, however, accomplished more toward uniting the Argentine into a firmly knit nation than had been done in the previous forty years. The opposition of Buenos Aires helped convince the other provinces of the necessity of a union. With the mouth of the river in the hands of a hostile state more powerful than any one of them separately, the position of Entre Rios, Santa Fe, or any one of the others, would have been critical. Only by uniting could they hope to maintain themselves and avoid absorption in detail. Intelligent Argentines had long been convinced of the desirability of a firm and enduring union, and the present danger crystallised that conviction in men's minds. Back of all this was Urquiza's influence. At last a military chief had come to the possession of supreme power who was willing to aid his country in establishing a stable and free government, and whose purpose was not merely the gratification of his own love of power. Argentine writers are divided in their opinion of Urquiza's real abilities, and many think that ignorance and irresolution, rather than a lofty patriotism, caused his moderation after his victory over Rosas.

Intelligent foreigners, however, who saw the Plate for themselves during this period are unanimous in praising his character, his dignified bearing, his liberality, and his capacities. Argentina had pa.s.sed the stage when a military dictator was her natural chief. The day for const.i.tutional government had arrived; Urquiza was a product of his time, and consciously or unconsciously embodied the changed political sentiments of his countrymen.

On the 1st of May, 1853, the Const.i.tuent Congress adopted a const.i.tution substantially copied from that of the United States of North America--and that const.i.tution, with a few amendments, has continued to be the fundamental law of the Argentine Republic. The navigation of the Parana and the Uruguay was declared free to all the world, largely as a reward to Brazil for her a.s.sistance against Rosas, although she protested against the extension of that liberty to any nations except those who had territory on the banks. The city of Parana, in the province of Entre Rios and on the eastern sh.o.r.e of the Parana River, was made temporary capital of the Republic. The various provincial capitals had been unable to agree that any one of them should have the honour and profit of being the political metropolis, and the city of Buenos Aires was selected as the permanent capital, to become such as soon as the province of that name should enter the confederation. The delegates had a double purpose in making this selection. Buenos Aires was the natural commercial and political centre, and, all things considered, the most convenient location in the provinces. In the second place, they desired to weaken the great province of Buenos Aires by cutting it in two, and to curb the city's political influence by placing it directly under the control of the federal government.

Urquiza was naturally selected as the first President, and was recognised by foreign nations. Buenos Aires protested, claiming still to be, for international purposes, the Argentine nation. She did not, however, formally declare her independence and seek for recognition as a new power. Buenos Aires, as well as the confederation, looked forward to the time when she would join the latter. Throughout Urquiza's six-year term, the provinces prospered amazingly. His administration of his province had guaranteed the security of property, and now as President he extended the blessings of peace to much of the rest of the confederation. The new bonds sat lightly on the outlying provinces of the Andean regions, but Urquiza did not stretch his const.i.tutional authority to interfere with them, satisfied to let them learn by degrees that the right of local self-government guaranteed by the paper const.i.tution would be respected in practice. The freedom of navigation caused unprecedented prosperity in the river provinces. The towns on the Parana and Uruguay doubled in population during his six-years' service.

Corrientes had been continually ravaged by the civil wars as lately as the last few years of Rosas's reign, but the a.s.surance of peace was all that was needed to start the rebuilding of the houses and the restocking of the ranches. The impulse in population, wealth, and commerce then given to the river provinces has never since lost its force. Foreign capital and immigration were invited and the rivers and harbours carefully surveyed. Rosario, in Santa Fe, was made a port of entry and began a growth that has made it second only to Buenos Aires itself.

In Buenos Aires events were gradually shaping themselves toward reuniting that province with the confederation. A liberal provincial const.i.tution was adopted, and though the ruling bureaucracy preferred the _statu quo_, fearing that their own fall from power would follow any triumph of the provincials, they were unable to hold the city in check.

It was too evident that the real interests of the city, and even her future commercial supremacy, were menaced by a continuance of the separation. In 1859 the situation became so strained that Buenos Aires marched an army to attack the federal government. Urquiza met it near the borders of Santa Fe and Buenos Aires, and administered a defeat. He advanced to the city and required his vanquished opponents to agree to accept the const.i.tution of 1853, and to consent that Buenos Aires should become a member of the confederation. He yielded, however, to the wishes of many Buenos Aireans and consented in the interests of harmony, that the question of the dismembering of the city from the province and capitalising the former should remain open for future determination. The essential justice in all other respects of the const.i.tution of 1853 had long been admitted even in Buenos Aires and there remained no reason why the latter should not enter the confederation once and for all. On the 21st of October, 1860, General Bartolome Mitre, Governor of Buenos Aires, swore to the const.i.tution, saying: "This is the permanent organic law, the real expression of the perpetual union of the members of the Argentine family, so long separated by civil war and bloodshed."

Meanwhile, Urquiza's term had expired. Dr. Derqui, his successor, was suspected of designs against the autonomy of the provincial governments.

The a.s.sa.s.sination of the Governor of San Juan and the succession of a member of an opposite faction, was made the occasion for Federal intervention in the affairs of that province. The government of Buenos Aires protested and it became evident that this untoward event was soon to disturb the peace of the newly formed confederation. The Federal Congress, under Derqui influence, refused to admit the members from Buenos Aires. Mitre marched out at the head of her forces and at the battle of Pavon, September 17, 1861, he overthrew the provincial forces.

Buenos Aires remained mistress of the situation. The governments of certain provinces had been imposed on their people by the Derqui administration, or they were obnoxious to the triumphant Buenos Aires party. They were overthrown and Derqui was deposed. Happily for the Argentine, Mitre was a sincere patriot and, though young, was moderate and conciliatory. Made president of the republic as the representative of the victorious Buenos Aireans, he set about the final reorganisation of const.i.tutional government in a spirit of unselfishness and with a foresight and skill that greatly aided to save his country from the sterilising anarchy of civil war.

The accession of Mitre in 1862 marked the end of the period of uncertainty. The government of the Argentine Republic was now finally and definitely established and fixed, after fifty-two years of conflict.

The const.i.tution of 1853 was left unamended, except that Buenos Aires became the seat of federal government without being separated from its province or ceasing to be the provincial capital. The free international navigation of the rivers was not interfered with, and Buenos Aires abandoned her pretensions to special commercial privileges. She was thenceforward more and more the centre of gravitation and power for the whole republic, but her influence came from legitimate natural causes and was exercised within const.i.tutional limits. The autonomy of the provinces was not interfered with, and it was no longer possible, even in the remotest districts, for a caudillo to rally at his call the gauchos, always ready for a raid, a campaign, or an invasion.

[Ill.u.s.tration: BARTOLOMe MITRE.

[From a steel engraving.]]

Though the form of the federal government was fixed and its theoretical supremacy has never since been questioned, its real power at first was feeble. Urquiza was master in the mesopotamian provinces, and in case of need Mitre could count on little military help except from his own province. The only result of the battle of Pavon which was immediately apparent was the shifting of the centre of power from Urquiza's capital to Buenos Aires. Nevertheless, henceforth the tendency was constantly toward strengthening the bonds of union. Urquiza and the other provincial governors showed no disposition to attack the central authority, and in turn the latter was careful to avoid useless aggressions against them. The problem of reconciling provincial rights with the existence of an adequate federal government had at last been solved. The nation pa.s.sed on to a still more difficult question,--the smooth and satisfactory working of democratic representative inst.i.tutions in the absence of an effective partic.i.p.ation in public affairs on the part of the bulk of the population. Elections have not carried the prestige of being the expression of the majority will. The ruling cla.s.ses have been anxious enough to obey the popular voice and to govern wisely, but people can only gradually be trained into the habit of expressing their will clearly and indisputably at regular elections.

The insignificant disturbances to public order which have occurred since 1862 have been indications of dissatisfaction with the imperfect detail workings of the complicated system of ascertaining the popular wishes, or hasty protests against mistakes on the part of those in power. Never have they endangered the Federal const.i.tution nor diverted the steady course of the nation's progress in the art of self-government.

CHAPTER IX

THE MODERN ARGENTINE

General Mitre's administration is memorable for the beginning of that tremendous industrial development which in thirty years made Argentina, in proportion to population, the greatest exporting country in the world. Foreign capital and immigration were chief factors in the transformation that within a few decades changed an isolated and industrially backward community into a nation possessing all the appliances and luxuries of the most advanced material civilisation.

In 1865 circ.u.mstances forced Mitre into the Paraguayan war. Lopez, the Paraguayan dictator, hated the Buenos Aireans quite as much as he did the Brazilians with whom he was constantly quarrelling, and he was only awaiting a favourable opportunity to vent his dislike on either or both.

He counted on the coolness that naturally existed between Urquiza and Mitre to insure him the former's aid. In 1864 Brazil intervened in the affairs of Uruguay by a.s.sisting one of the parties in the civil war then raging. Lopez regarded the action of Brazil as endangering the balance of power in the Plate regions. In retaliation he seized the Brazilian province of Matto Grosso, which lay along the Paraguay north of his own territory. Mitre wished to remain neutral, although he had no sympathy with the brutal despot, and had an understanding about Brazil's action in Uruguay which safeguarded the interests of Argentina. Lopez, however, insolently demanded free pa.s.sage across Argentine territory for the troops which he wished to send against Brazil and Uruguay. Mitre's refusal was followed by a Paraguayan invasion, and national honour required that this violation of territory be resented. Brazil and the Flores faction in Uruguay welcomed the alliance of Argentina. The Paraguayan invasion was repulsed by their combined forces, and the allies advanced up the Parana against Lopez in his own dominions. It was natural that Mitre should be commander-in-chief of the allied armies, although Brazil furnished the bulk of the troops and bore the brunt of the expense. Urquiza disappointed Lopez in refusing to revolt against Buenos Aires, and although he took no great personal interest in the war he co-operated in many ways with Mitre.

The enormous expenditures of the Brazilian government furnished a splendid cash market for Argentine stock and produce, and the resulting profits compensated for the pecuniary sacrifices involved. In two years'

fighting both the Argentine and the Brazilian armies suffered tremendous losses on the field and in the cholera hospitals. After the great repulse at Curupayty in 1867 the number of Argentine troops was largely reduced. When the Brazilian fleet finally forced the pa.s.sage of the river, opening the way to Asuncion, Mitre resigned the command into the hands of the Brazilian general Caxias, and the last two years of the war were carried on princ.i.p.ally by Brazilian troops. By the peace of 1870 Argentina's t.i.tle to certain valuable territory was quieted, and she gained an important commercial advantage by the opening of Paraguay to her trade. Her commercial and industrial leadership in the Plate valley has never since been endangered. Politically also the indirect results were gratifying. The tremendous sacrifices in men and money had sickened the Brazilian government and people of foreign complications.

Thereafter, the emperor pursued a policy of non-interference, which has left to his Spanish neighbours a free hand among themselves. With the withdrawal of the Brazilian troops from Paraguay, the balance of political power began slowly to pa.s.s from Rio to Buenos Aires.

Sarmiento, the "schoolmaster president," succeeded Mitre in 1868. His election is said to have been the freest and most peaceful ever held in the republic and to have represented as nearly as any the will of the electors. The development of population, wealth, and industry continued in increasing geometrical proportion. During forty-five years before 1857 the population had only a little more than doubled; during the forty-five years since that date, the increase has been four hundred and fifty per cent. The yearly increment holds fairly steady at four per cent., which is as large as that of any country in the world. In 1869 the city of Buenos Aires had one hundred and eighty thousand people, and in 1902 it contained eight hundred and fifty thousand. Immigration had begun to pour in at the rate of twenty thousand per annum, and had rapidly increased to over a hundred thousand, when the great crisis of 1890 temporarily interrupted the flow. The years from 1868 to 1872 were prosperous over much of the civilised world, but nowhere more so than in Argentina. Sarmiento's administration was, however, characterised by the beginning of that policy of governmental and commercial extravagance which has so deeply mortgaged the future of Argentina, and has repeatedly hampered the legitimate development of this marvellously fertile region. In the ten years prior to 1872 foreign commerce doubled, but the foreign debt increased fivefold.

The last of the caudillos, Lopez Jordan of Entre Rios, revolted in 1870 against Urquiza, who was still governor of that province. The redoubtable old patriot was captured by the rebels and a.s.sa.s.sinated. In 1901 a monument was erected to his memory in the city of Parana, his old capital, and the day of the unveiling was a national festival in all the republic. The Federal government avenged his death and suppressed the insurrection after an obstinate, expensive, and b.l.o.o.d.y little war.

Sarmiento's administration was, however, not popular, and the news that he had virtually determined to name his successor created much dissatisfaction. Mitre headed the opposition in the city, while in the provinces some of the discontented went so far as to take up arms. Julio Roca, then a young colonel, defeated them at Santa Rosa, and Sarmiento was able to hand over the reins of government to Dr. Avellaneda without any further serious opposition.

[Ill.u.s.tration: JULIO ROCA.]

A commercial crisis was beginning when the new President took office in 1874. He initiated a policy of retrenchment, under which the government managed to pay its obligations and weather the storm. General Roca was made Minister of War and came into further prominence as the conqueror of the Indians, who had hitherto prevented white men from settling on the vast and valuable southern pampas. In 1854, after the fall of Rosas, the Indians recovered most of the territory from which he had driven them twenty years before. Later, the frontier was advanced very slowly, but in 1877 Alsina, one of the most successful governors Buenos Aires ever had, undertook a vigorous campaign. In the following year General Roca threw the power of the Federal government into this vastly important enterprise. He carried the frontier south to the Rio Negro and west to the Andes, attacking the Indians in their fortresses--a policy which insured permanent white domination. The ultimate consequences of opening up to civilised settlement the immense territories comprised in Roca's conquests cannot yet properly be estimated. The vast region of Patagonia, that was marked on the maps in our boyhood as an unclaimed and uninhabitable arctic waste, has since been added to Argentina as an indirect result of Roca's campaign of 1878. Buenos Aires put in a claim for the whole of the territory conquered from the Indians, but the Federal statesmen refused to allow one province to become well-nigh as large as all the rest together. By a compromise her area was increased to sixty-three thousand square miles, while most of the new acquisition was divided into territories under the direct administration of the Federal government.

As the time for the presidential election of 1880 approached, political matters began to look ugly. It was evident that Avellaneda intended to choose his successor. Through the provincial governors, the police, the army, the employees on the public works, and the officials of all kinds he had easy control of the election machinery. Even the most scrupulous President often cannot prevent the exercise of coercion in his name and without his knowledge. The opposition in South America usually refrain from voting: indeed, it is considered almost indelicate for outsiders to interfere in a matter so strictly official as an election. The privilege of voting is not so highly prized and so jealously guarded as in the United States and the northern countries of Europe.

Avellaneda and his adherents had fixed upon General Roca as the next President. The princ.i.p.al opposing candidate was Dr. Tejedor, governor of Buenos Aires, who was supported by Mitre's party and also by many of the other Buenos Aires party, the "autonomists." The contest was really between Buenos Aires and the provinces. General Roca was strong with the army and with the country, but so tremendously had Buenos Aires grown that the result appeared doubtful. Her population, city and province, had in 1880 reached six hundred and fifty thousand,--more than a quarter of the total in the whole Confederation. The next three provinces put together did not equal her numbers and lagged still farther behind in wealth and ability to concentrate their forces.

Radical counsels prevailed in Buenos Aires. Roca's opponents, seeing that they were at a hopeless disadvantage with the election machinery in Avellaneda's hands, determined to use violence. In June, 1880, the partisans of Tejedor rose against the Federal government. The police and militia of the city joined them and paraded the streets, while the alarm flew to the country, and the troops of the line began to concentrate outside the city. Presently the President and his Cabinet fled for safety to the Federal camp. For a few weeks there was some skirmishing and much negotiating, and in one encounter near the south end of the city a thousand Buenos Aireans were killed. Finally, the two sides came to an agreement by which the Roca party retained substantially all that they had been contending for. The General succeeded to the Presidency without further opposition, and the city of Buenos Aires was detached from the province. The federalisation of the great city was the last step in the process of adaptation that had been going on ever since the expulsion of the Spaniards. Political equilibrium between the provinces and Buenos Aires had been reached. Thenceforth the latter's direct predominance was to be purely intellectual, commercial, and social. For the privilege of being capital of the republic, the city exchanged her provincial autonomy. Buenos Aires province, as formerly const.i.tuted, was the greatest menace to a peaceful federal union. In an a.s.sembly where the rights and influence of all the provinces were supposed to be equal, the magnitude of Buenos Aires was a constant occasion for the jealousy of her smaller sisters and for aggressions on her own part. Deprived of the city, the remainder of the province was not powerful enough to be dangerous. Now that it is federalised, the city itself proves to be the strongest tie binding together the different parts of the Confederation.

The greatest of all the waves of material prosperity reached its culmination during Roca's first administration. Business fairly boomed; foreign commerce increased seventy-five per cent. from 1875 to 1885; the exports of hides, cattle, wool, and wheat swelled from year to year; the railroad mileage tripled in ten years; the revenues mounted sixty per cent. in five years; the use of the post-office, that excellent measure of education, wealth, and higher national energies, tripled. All danger of disturbances serious enough to affect property rights had long since pa.s.sed; the provincial governors worked harmoniously with the Federal authorities. A part of Roca's system was to rest his power as chief executive on the co-operation of the governors; the members of Congress also bore somewhat the same relation to the President. As a rule, a majority in Congress supported his measures.

In spite of present prosperity, dangers had been inherited from past administrations. There were weak spots in the political and financial structure that had grown too rapidly to be altogether well built. The people still lacked the hard and continued training in business that older nations have had, and the national temperament tended toward a reckless optimism. European money lenders stood ready to stimulate this tendency by offering easy credit facilities in return for careless promises of exaggerated interest rates. The medium of exchange was a vastly inflated and fluctuating paper currency. From the beginning Argentine rulers had resorted to note issues to tide over their pecuniary difficulties. When Rosas a.s.sumed power in 1829 the paper dollar was worth fifteen cents, and by 1846 he had driven it down to four cents. In 1866, Mitre's administration had established a new arbitrary par at twenty-five paper dollars for one gold dollar.

Sarmiento's extravagances made suspension necessary and sent gold to a premium. In 1883 President Roca remodelled the currency, issuing new notes convertible into gold, and exchanging them for the old paper at the rate of twenty-five for one. But his effort to contract and steady the circulating medium excited protests from a community that was growing rich in the rapid inflation of values. Foreign money was being loaned to all sorts of Argentine enterprises on a scale that, considering the small population of the country, has never been precedented anywhere. Railroads, ranches, commercial houses, banks, land schemes, building enterprises, were capitalised for the asking. The provincial governments borrowed money recklessly, while interest was guaranteed on new railroads, and charters granted to all sorts of speculative enterprises. The nation undertook to supply itself in a single decade with the drainage works, the docks, the public buildings, the parks, the railroads, that older countries have needed a generation to provide. So much capital was being fixed that the attempt at specie resumption cramped the speculative world. Within two years it was given up, and issues of paper money resumed.

General Roca retired from office in 1886, and was succeeded by his brother-in-law, Juarez Celman. The four years during which the latter remained in office are memorable for reckless private and public borrowing. The healthy activity of General Roca's administration gave place to a mad fever of speculation. Congress pa.s.sed a national banking act, and under its provisions banks of issue were established in nearly every province. The paper circulation almost quadrupled and the premium on gold doubled. The Federal government followed the example set by the provinces and munic.i.p.alities, and burdened the country with an indebtedness which has mortgaged the future of the country for years to come. Between 1885 and 1891 the foreign debt was increased nearly threefold.

[Ill.u.s.tration: GATEWAY OF THE CEMETERY AT BUENOS AIRES.

[From a lithograph.]]

During 1887 and 1888 few apprehensions of the inevitable result of the inflation seem to have been entertained. Up to the very day of the crash of 1889 the government cheerfully continued to borrow, to plan magnificent public improvements, and to build expensive railways. The public speculated confidently in the mortgage scrip issued through the provincial mortgage banks. Early in 1889 the government began to have difficulty in meeting some of the enormous obligations which it had undertaken. Conservative people became apprehensive; the independent press raised a warning voice. A ministerial crisis was followed by a panic in the Exchange. The new Secretary of the Treasury, in an effort to prevent further depreciation of the currency, diverted the redemption fund held by the government for bank issues. The currency dropped with sickening rapidity; the bubble companies collapsed; the public realised that many of the banks were unable to meet their obligations.