The greatest of all the waves of material prosperity reached its culmination during Roca's first administration. Business fairly boomed; foreign commerce increased seventy-five per cent. from 1875 to 1885; the exports of hides, cattle, wool, and wheat swelled from year to year; the railroad mileage tripled in ten years; the revenues mounted sixty per cent. in five years; the use of the post-office, that excellent measure of education, wealth, and higher national energies, tripled. All danger of disturbances serious enough to affect property rights had long since passed; the provincial governors worked harmoniously with the Federal authorities. A part of Roca's system was to rest his power as chief executive on the co-operation of the governors; the members of Congress also bore somewhat the same relation to the President. As a rule, a majority in Congress supported his measures.
In spite of present prosperity, dangers had been inherited from past administrations. There were weak spots in the political and financial structure that had grown too rapidly to be altogether well built. The people still lacked the hard and continued training in business that older nations have had, and the national temperament tended toward a reckless optimism. European money lenders stood ready to stimulate this tendency by offering easy credit facilities in return for careless promises of exaggerated interest rates. The medium of exchange was a vastly inflated and fluctuating paper currency. From the beginning Argentine rulers had resorted to note issues to tide over their pecuniary difficulties. When Rosas assumed power in 1829 the paper dollar was worth fifteen cents, and by 1846 he had driven it down to four cents. In 1866, Mitre's administration had established a new arbitrary par at twenty-five paper dollars for one gold dollar. Sarmiento's extravagances made suspension necessary and sent gold to a premium. In 1883 President Roca remodelled the currency, issuing new notes convertible into gold, and exchanging them for the old paper at the rate of twenty-five for one. But his effort to contract and steady the circulating medium excited protests from a community that was growing rich in the rapid inflation of values. Foreign money was being loaned to all sorts of Argentine enterprises on a scale that, considering the small population of the country, has never been precedented anywhere. Railroads, ranches, commercial houses, banks, land schemes, building enterprises, were capitalised for the asking. The provincial governments borrowed money recklessly, while interest was guaranteed on new railroads, and charters granted to all sorts of speculative enterprises. The nation undertook to supply itself in a single decade with the drainage works, the docks, the public buildings, the parks, the railroads, that older countries have needed a generation to provide. So much capital was being fixed that the attempt at specie resumption cramped the speculative world. Within two years it was given up, and issues of paper money resumed.
General Roca retired from office in 1886, and was succeeded by his brother-in-law, Juarez Celman. The four years during which the latter remained in office are memorable for reckless private and public borrowing. The healthy activity of General Roca's administration gave place to a mad fever of speculation. Congress passed a national banking act, and under its provisions banks of issue were established in nearly every province. The paper circulation almost quadrupled and the premium on gold doubled. The Federal government followed the example set by the provinces and municipalities, and burdened the country with an indebtedness which has mortgaged the future of the country for years to come. Between 1885 and 1891 the foreign debt was increased nearly threefold.
GATEWAY OF THE CEMETERY AT BUENOS AIRES.
[From a lithograph.]
During 1887 and 1888 few apprehensions of the inevitable result of the inflation seem to have been entertained. Up to the very day of the crash of 1889 the government cheerfully continued to borrow, to plan magnificent public improvements, and to build expensive railways. The public speculated confidently in the mortgage scrip issued through the provincial mortgage banks. Early in 1889 the government began to have difficulty in meeting some of the enormous obligations which it had undertaken. Conservative people became apprehensive; the independent press raised a warning voice. A ministerial crisis was followed by a panic in the Exchange. The new Secretary of the Treasury, in an effort to prevent further depreciation of the currency, diverted the redemption fund held by the government for bank issues. The currency dropped with sickening rapidity; the bubble companies collapsed; the public realised that many of the banks were unable to meet their obligations.
At this crisis public alarm and indignation found a vent in the formation of a revolutionary society, called the Civic Union, which was pledged to overthrow President Celman. On July 26, 1890, disturbances began and there was a little fighting in the streets. Police and troops, however, put no spirit into their efforts to suppress the rioters. The President's best friends urged him to resign, and Congress passed a formal memorial to that effect. There was nothing for him to do but to obey the manifest wish of the people; he handed in his resignation and the Vice-President, Dr. Carlos Pellegrini, peacefully succeeded him.
The situation went from bad to worse; in 1891 the currency dropped to twenty-three cents on the dollar, the banks failed, and the laws for collection of debts were suspended for two months. The most which Dr. Pellegrini could hope to do was to hold things together until the general election should be held fifteen months later. No human wisdom could devise measures that would give immediate prosperity, and the public would be satisfied with nothing less. Dr. Pellegrini had to wait until later years for a proper appreciation of his labours. The other two great national figures were General Roca and General Mitre. The first had the prestige of his strong and successful administration; he enjoyed the confidence of the army, and he was the head of the great Nationalist party which was especially powerful in the provinces. General Mitre, the most eminent citizen of Buenos Aires, and in a way the living embodiment of the previous forty years of national history, had inevitably been selected as chief of the Civic Union. He had therefore led the movement through which the public opinion of the capital had overthrown Celman.
Mitre and Roca had co-operated in securing a peaceful transfer of the government from Celman to Pellegrini. Roca was inclined to favour Mitre for the presidency, but it soon became evident that the latter could not control the more radical members of the Civic Union, and that his candidacy would not reconcile all parties. February 19, 1891, an attempt to assassinate Roca was perpetrated in the streets of Buenos Aires. The spirit of mutiny grew alarmingly, and a state of siege was proclaimed; the Civic Union split into warring camps; trouble broke out in Cordoba, and successful revolutions overthrew the legal state governments in Catamarca and Santiago del Estero. Mitre and Roca formally withdrew from active political life in the hope that this might placate the dissident politicians.
The candidate fixed upon by the wing of Nationals who adhered to Roca, and the moderates of the Civic Union led by Mitre, was Doctor Luiz Saenz Peña, ex-Justice of the Supreme Court. The Pellegrini government gave him its earnest support, and charges were made by the Radicals that their votes would be forcibly suppressed in the election of October, 1891. They determined to anticipate violence with violence, but, on the eve of the election in October, 1891, their leaders were imprisoned and a state of siege declared. Saenz Peña was elected, but the Radicals began to intrigue to obtain control of the provincial governments, which would enable them to force his resignation or his compliance with their wishes. Serious trouble broke out early in 1892 in the province of Corrientes, with which the Buenos Aires radicals openly sympathised. The new President quickly cut loose from the Roca wing of the Nationalist party and allied himself closely with the moderate Civic Unionists, now usually called "Mitristas." The President's own son, who had been a candidate against him, headed the faction of the Nationalist party that had renounced Roca's leadership. Revolutionary movements against the governors who belonged to the Roca faction began in several provinces. In February there were armed protests in Santa Fé against a new wheat tax; a revolt broke out in Catamarca in April; by July the Saenz Peña administration was in the gravest difficulties. San Luiz and Santa Fé rebelled, and in August Salta and Tucuman followed. It was manifest that the President was not strong enough to hold down the selfish factions who saw in the general dissatisfaction and financial distress only an opportunity to get into office by force of arms.