Moreover, in order still further to avoid all risks, such business is now done by means of cable transfers, instead of by cheques at one month from date as formerly; thus avoiding as far as possible any variation in the rate of exchange. It is chiefly during the period of exportation that these drawing transactions become of great importance.
Exchange business is transacted on a gold basis; that is, on the basis of the gold piastre, which is equivalent to a dollar, or to 5 francs of French money, or 4s. of English; as for settlements, they are made indifferently in gold or paper, on the basis of 44 centavos, or ·44 of a piastre in gold, for one piastre in paper.
Formerly the rate of exchange used to vary very perceptibly with the seasons. The banks used to buy during the export season, which for grain and wool lasts from December to March, and consequently profited by the abundance of the market to discuss the price. They then sold to import houses during the slack season, sometimes making a profit of 6 to 10 centimes. Now competition has greatly reduced these margins, which scarcely vary at all, in a normal season, except to the extent of an insignificant fraction.
| MILLIONS STERLING | ||||||
| BANKS | Deposited | Discounted | Cash Reserves | |||
| Gold | Paper[89] | Gold | Paper[89] | Gold | Paper[89] | |
| National Argentine | ·54 | 14·773 | ·26 | 15·004 | 1·86 | 4·611 |
| Spanish of the Rio de la Plata | ·52 | 10·076 | ·58 | 8·289 | ·26 | 2·84 |
| French of the Rio de la Plata | ·88 | 4·206 | 1·16 | 4·160 | ·62 | 1·117 |
| Italian of the Rio de la Plata | ·38 | 6·204 | ·8 | 4·259 | ·42 | 1·645 |
| New Italian | ·08 | 1·804 | ·16 | ·950 | ·02 | ·361 |
| Popular Argentine | ·004 | ·801 | ·01 | ·809 | ·02 | ·255 |
| Province of Buenos Ayres | ·18 | 4·593 | ·042 | 3·991 | ·04 | 1·188 |
| German Transatlantic | ·26 | 2·367 | ·94 | 2·552 | ·34 | ·533 |
| Anglo-South-American | .. | .. | .. | .. | .. | .. |
| British | ·28 | 2·886 | ·76 | 2·561 | ·30 | ·774 |
| German | ·02 | ·109 | ·06 | ·325 | ·06 | ·299 |
| London and Brazilian | ·16 | 6·688 | ·58 | ·545 | ·12 | ·185 |
| London and the Rio de la Plata | 1·46 | 11·906 | 1·64 | 7·629 | ·96 | 3·602 |
| National Argentine | ·98 | 16·940 | ·4 | 18·832 | 3·612 | 4·840 |
| Spanish of the Rio de la Plata | ·32 | 9·880 | ·38 | 8·553 | ·32 | 3·476 |
| French | 1·04 | 3·819 | 1·28 | 3·845 | ·78 | 1·179 |
| Italian | ·36 | 6·186 | ·74 | 4·681 | ·52 | 1·320 |
| New Italian | ·1 | 1·988 | 2·4 | 1·601 | ·036 | ·493 |
| Popular Argentine | ·04 | ·695 | ·0004 | 1·188 | ·03 | ·325 |
| Province of Buenos Ayres | ·38 | 4·919 | ·18 | 4·514 | ·22 | 1·232 |
| German Transatlantic | ·28 | 2·464 | ·96 | 2·424 | ·32 | ·693 |
| Anglo-South-American | ·16 | ·730 | ·42 | 2·173 | ·04 | ·308 |
| British-South-American | ·3 | 2·939 | ·76 | 2·508 | ·6 | ·748 |
| German-South-American | ·22 | ·264 | ·24 | ·563 | ·24 | ·660 |
| London and Brazilian | ·12 | ·739 | ·54 | ·651 | ·08 | ·211 |
| London and Rio de la Plata | 1·4 | 10·665 | 1·2 | 6·713 | 1·00 | 3·634 |
| National Argentine | 1·06 | 20·601 | ·4 | 21·483 | 4·54 | 5·944 |
| Spanish of the Rio de la Plata | ·44 | 11·077 | ·38 | 11·044 | ·38 | 3·687 |
| French of the Rio de la Plata | 1·18 | 4·013 | 1·02 | 4·919 | ·68 | ·880 |
| Italian of the Rio de la Plata | ·36 | 6·6 | ·8 | 4·699 | ·58 | 1·302 |
| New Italian | ·08 | 2·094 | ·16 | 1·874 | ·01 | ·413 |
| Popular Argentine | ·016 | ·809 | ·0002 | 1·443 | ·02 | ·273 |
| Province of Buenos Ayres | ·4 | 57·112 | ·12 | 5·788 | ·014 | 1·381 |
| German Transatlantic | ·236 | 3·053 | ·88 | ·234 | ·366 | ·906 |
| Anglo-South-American | ·14 | ·607 | ·16 | 1·461 | ·08 | ·255 |
| British-South-American | ·18 | 3·247 | ·46 | 2·606 | ·52 | ·739 |
| German-South-American | ·16 | ·264 | ·28 | ·756 | ·06 | ·141 |
| London and Brazilian | ·12 | ·713 | ·44 | ·774 | ·14 | ·255 |
| London and Rio de la Plata | 1·22 | 10·877 | ·98 | 7·119 | 1·9 | 3·669 |
[89] The amounts here given are, of course, the actual, not the face values, of the notes.
Again, the sales of money are now extended over a far longer period than before, as the export season itself has been extended by new products, such as maize, chilled and frozen meats, etc., which do not necessarily find their outlet at the same time as the rest of the harvest. Thus the banks have no longer any incentive to hoard reserves of money, as they are no longer certain of selling them a few months later.
All these conditions here enumerated are of course subject to certain small variations, according to the kind of trade or industry. The large landowner, the grazier, the farmer, the cattle-breeder, who has no money at his disposal but that coming from the sale of his products, can only procure credit, no matter what his wealth may be in land, at a rate far higher than that which is demanded of the large commercial houses of Buenos Ayres. But as we have especially attempted to demonstrate, the Argentine banks are to-day splendidly equipped with capital, so organised as to assist commerce by services of many kinds, and, finally, their charges have been abated, by the action of competition, to rates which one would hardly expect to find in practice in a new country.[90]
[90] The deposits in the Argentine banks at present amount to nearly £80,000,000.
As the latest sign of progress we may mention the establishment of the Clearing-House, which commenced operations in 1893, upon the model of the London Clearing-House, under the able management of the under-manager of the Bank of London and the Rio de la Plata, Mr Hogg. This institution, as its name indicates, serves to strike the balances of the sums which the various banks may owe one another, the balances only being actually paid over. The total sum represented by the operations of the Clearing-House in 1908 was over £352,000,000. This figure includes