The Government’s representative, having analysed the effective revenue at the disposal of the Province, and allowing for the probable progress by which it might benefit in the immediate future, declared that the Public Treasury could not put aside more than £308,000 for the purpose of guaranteeing the dividends on the shares of the Bank; but that this sum would probably be increased by £44,000 during the next five years, and by £48,400 at the end of ten years; thus assuring the creditors of an interest of 31⁄2 per cent., and a proportional amortisation of 1⁄2 per cent. An arrangement on this basis was proposed to the creditors of the Bank at a general meeting, held at la Plata in November 1906, and was accepted.
We must add that at the present time the Provincial Government is considering a scheme designed to infuse new life into the Mortgage Bank. This system consists of founding a limited company in which both public and private interests would be represented; a state of affairs very like that already in existence, and yielding excellent results, in the case of the Bank of the Province of Buenos Ayres.
The great official establishment for loans on mortgage in the Argentine is the Banco Hipotecario Nacional. This bank grants loans upon real estate in the capital, provinces, and national territories. It issues cedulas which bear an interest of 5 to 6 per cent., with an amortisation rate of 1 to 4 per cent., which are quoted at about par on the market, so that the holder, after the deduction of expenses and commissions, obtains a satisfactory interest.
The value of cedulas in circulation at the end of 1908 amounted to £11,871,108 in paper (actual value) and £1,876,530 in gold, respectively.
In addition to these official establishments, there are various private companies, founded by means of foreign capital, which issue loans on real estate in the capital of the Republic and on land in some of the Provinces.
According to our information, these companies employ a capital of nearly £15,000,000, divided as follows:
| Argentine Railway Loan Co., Ltd. | £827,600 |
| River Plate Trust Loan and Agency Co. | 2,705,422 |
| Société de Crédit Foncier de Santa Fé | 511,120 |
| Mortgage Co. of the River Plate | 1,997,717 |
| River Plate and Gal. Investment Trust Co. | 504,000 |
| Dutch Mortgage Trust of the Rio de la. Plata | 286,194 |
| Argentine Mortgage and Agricultural Co. | 80,000 |
| The Standard | 541,488 |
| Crédit Foncier Argentine | 3,016,340 |
| Compagnie Pastorale Belge Sud.-Americaine | 1,350,102 |
| Société Hypothécaire Belge-Argentine | 1,583,130 |
| Banque Hypothécaire Franco-Argentine | 1,487,160 |
| Société Rurale de Bahia Blanca | 3,960 |
| —————— | |
| £14,894,233 | |
| ========= |
High as these figures are, however, they represent only a portion of the foreign capital employed in this class of transactions, for considerable sums are advanced by private persons who wish to obtain the high interest obtainable.
These companies lend only gold, that they may escape the fluctuations of the paper-money market, and usually limit their operations to dealing with properties in the capital or in the Province of Buenos Ayres, doing business with the rest of the country only in a very limited degree. Although Argentine legislation is extremely advanced in the matter of loans and mortgages, the lender fears, in the case of certain provinces, to encounter difficulties in practice, or delays of legal procedure in the case of foreclosing. The interest on mortgages, which during the year 1908 was maintained at about 9 per cent., is to-day showing a tendency to fall, on account of the abundance of money in the Buenos Ayres market; the rate is now as low as 8 per cent.