The mutiny of the army, however, under General Lavalle, and his barbarous murder of General Dorrego, the Governor, blasted all these flattering prospects, and involved the whole republic in confusion and ruin. The consequences of the civil warfare which followed to the finances of the country were deplorable, and infinitely worse than those occasioned by the war with Brazil. The currency suffered apparently beyond all hope of recovery, and the paper dollar, after great fluctuations, fell to about 7d., at which rate it has, with little variation, been stationary for the last seven years.
In the five years from 1828 to 1832, inclusive, the receipts and expenses were as follow:—
| Dollars. | ||
|---|---|---|
| 1 | The expenditure of the Government, or Home Department, was | 8,254,515 |
| 2 | Of the Department of Foreign Affairs | 778,935 |
| 3 | Of the Finance Department and Public Debt | 29,884,831 |
| 4 | Of the War Department | 31,947,435 |
| Dollars, currency | 70,865,716 | |
| The revenue in the same period only produced | 40,889,263 | |
| Leaving a deficiency of to be provided for by loans and other extraordinary ways and means. | 29,976,453 | |
The War Department, it will be seen, absorbed more than three-fourths of the whole revenue:—nor was this the final account of the extraordinary expenses which may be traced to the revolt of the troops above alluded to. Whilst they were cutting the throats of their countrymen in the interior, the Indians broke in upon the frontiers, left without defence, and made it necessary to organise a new army to put them down, which occasioned a great expenditure, though it was, perhaps, compensated for by the extension of the frontiers, and the new security it gave to the lands in the south of the province.
To provide for these expenses the Funded Debt was again very largely increased, and at the close of 1835 stood as follows:—
| 4 per cents. | 6 per cents. | |||
|---|---|---|---|---|
| Dollars. | Dollars. | |||
| Created before the war with Brazil | 2,000,000 | 5,360,000 | ||
| In | September, 1827 | 6,000,000 | ||
| " | February, 1831 | 6,000,000 | ||
| " | March, 1834 | 3,000,000 | ||
| " | November, 1834 | 5,000,000 | ||
| 2,000,000 | and | 25,360,000 | ||
| Of which the Sinking Fund had redeemed up to that time | 574,246 | and | 6,389,713 | |
| Leaving unredeemed at the close of 1835 | 1,425,754 | and | 18,970,286 | |
Besides this there was a floating debt in treasury-bills and other outstanding claims of nearly 8,000,000 more to be provided for out of the ways and means for 1836, which, after every possible reduction of the establishments, were hardly equal to meet the ordinary expenditure. In the hope of being enabled to pay off this part of the debt, the Legislature authorised the Government, in the first instance, to offer for sale, at a fixed price, a portion of the lands in the south, acquired in the recent campaigns against the Indians:—but their expectations were not realised,—there were no bidders for the lands; and when the junta met the next year to receive the accounts for 1837, instead of any decrease in the floating debt, it had risen to above 9,000,000 of dollars. They then adopted the alternative of creating Public Funds, and passed a law for adding no less than 17,000,000 to the Public Debt. The funds in question were placed at the disposal of the government for sale, at a price not lower than sixty per cent, at which it was calculated that they would produce 10,200,000, and be, therefore, sufficient to cover the floating debt, and leave the ordinary revenue free to meet the ordinary expenditure of the states. To provide for the increased interest of the Public Debt, new stamp duties and a more strict enforcement of the direct taxation (Contribucion Directa) were enacted.
This was at the commencement of 1837, when, including this new creation of stock, the responsibilities of the government appeared to be as follow:—
First.—The Funded Debt.