For the realisation of these then important undertakings of public utility the Government of 1822 resolved to obtain the necessary resources, by raising a loan of a million sterling, giving as consideration a dividend of 6 per cent. and an annual redemption of 1 per cent.; the House of Baring to act as agents for the loan. Unhappily the executive power employed the resources furnished by this transaction in founding a bank which had a very short existence, and the intended public works were not effected. More than half a century elapsed before their realisation.
The loan was issued in 1824, and was taken up in entirety at a discount of 30 per cent., so that the Government received £700,000. For many years, at the time of the Rozas tyranny, and during the ensuing period of national dissolution, the payments on this loan were suspended; not until 1856, when the tyranny was overthrown and the Argentine nation reconstituted, did the Government of Buenos Ayres instruct Norberto de la Riestra to come to an understanding with the creditors, and to offer them the punctual payment not only of the future dividends, as they fell due, but also of all those overdue, on deferred stock at 11s. 2d., at 2 per cent. interest, with an annual redemption of 1⁄2 per cent. This debt is today extinguished, and has left no traces on the budget.
The second loan contracted by the nation after its reorganisation was intended to cover the expenses of the war to which it had been unreasonably provoked by the tyrant of Paraguay in 1865; and this loan has also disappeared from the ledger of the public debt.
The third national loan was contracted in 1870, the sum being £1,042,978, under the Presidency of Señor Sarmiento; and the capital was required for the accomplishment of public works. This loan and that preceding it were finally converted into others which carried a lower interest.
Then these transactions were followed by others, of which we will briefly enumerate the details.
The railway loan, authorised by the law of the 2nd of October 1880, was to raise the sum of $12,000,000; a sum required for the extension of the Central North Railway as far as the town of Jujuy, the Andean line as far as San Juan,
and for the branch line to Santiago de l’Estero. It bore 6 per cent. interest, with an annual redemption of 1 per cent. It was issued in London, in June 1881, for the amount of £2,450,000, at a price of 91 per cent.
The loan entitled “The Public National Funds,” which was decreed by the laws of 12th October and 28th June 1883, enabled the Government to pay for the shares in the National Bank (to-day in liquidation), which it had acquired. This loan, bearing 5 per cent. interest and 1 per cent. redemption, was issued in May 1884, by Baring Brothers, at a discount of 84·5 per cent., and amounted to £1,683,100.
The loan entitled “Harbour Works of the Capital,” authorised by the law of 27th October 1882, was contracted for the construction of the new harbour which the city of Buenos Ayres required for the development of her foreign trade. An issue of $20,000,000 in gold was decreed, bearing 6 per cent. interest, with 1 per cent. redemption.
The “Public Works” loan was created by the law of 21st October 1885; its amount was £8,400,000, and its object the unification of certain loans required for various undertakings. The shares bore 5 per cent. interest with an annual redemption of 1 per cent. The sum issued was £8,333,000, of which £4,000,000 was placed in London, in January 1886, at 80 per cent., and the remainder in January 1887 at 851⁄2 per cent. This loan was guaranteed, as far as the interest was concerned, by the customs revenue, and the representatives of the investors had on this pretext reserved certain rights of control over the administration of this revenue.