Still, in Argentina and Uruguay these forces had not for some time been in full operation, from causes stated above; and, therefore, panic would not have been a surprising result from alarm falling on depression, before cool reason had time to assert its reassuring influence.
It soon did so, however, thanks to the virile and sound handling of the situation by the heads of Government and Finance.
Congresses assembled and their usually heterogeneous political elements unanimously and swiftly agreed to pass the several measures of economic defence placed before them.
During seven days’ Bank Holiday the finance of both Republics was set in good order; not only to avoid ill consequences from the initial and any likely future shocks, but to enable the countries to profit—as there can now be little doubt they are doing and will do—from the political and economic disturbance of Europe.
As Señor Carlos F. Soares, writing in La Nacion (Buenos Aires) under date January 1st, 1915, said:—
The laws and financial and economic measures necessitated by the European conflagration have proved opportune and efficacious.
Thanks to them, danger to the Credit Houses and Institutions was avoided; Internal and Foreign commercial pressure was lessened, the gold stock in the “Caja de Conversión,” which guarantees the value of the paper currency, was preserved; the escape of gold from the country was avoided; the lack of foreign bills of exchange was compensated for by deposits of gold at the various Argentine Legations; shortage of coal and dearness of wheat and flour were foreseen; and, finally, means of obtaining its value were assured to the natural wealth of the country.
Only one Buenos Aires Bank (of comparatively small importance) failed to reopen its doors after the seven days’ holiday; a failure which there is some reason to believe was by no means entirely due to the War.
Not one Bank and very few Commercial Houses availed themselves of the Moratorium; a fact which is highly creditable to the Local Banking and Commercial community.
The arrangements for the deposits of gold at the Legations constitute a feature novel to the system of International Exchange.