External debt (July 31, 1905):
 National loans £42,297,050
 Provincial loans and others, assumed 30,395,916
 National cedulas 11,763,923
   Total £84,456,889
Consolidated Internal debt (Dec. 31, 1904):
 Gold$16,544,000
 Paper79,174,400
—————£10,178,718
 Total service on funded debt, 1905,
  $24,375,067 gold, and $15,914,335 paper £6,225,669
 Floating debt£259,170
 Treasury bills (Apr. 30, 1905)275,220
 Unpaid bills, $3,332,594, paper288,560
————£822,950

The paper currency forms an important part of the internal debt, and has been a fruitful source of trouble to the country. Few countries have suffered more from a depreciated currency than Argentina. During the era of so-called “prosperity” between 1881 and 1890 an enormous amount of bank notes were issued under various authorizations, especially that of the “free banking law” of 1887. During this period the bank-note circulation was increased to $161,700,000, and two mortgage banks—the National Hypothecary Bank and the Provincial Mortgage Bank (of Buenos Aires)—flooded the country with $509,000,000 of cedulas (hypothecary bonds). When the crash came and the national treasury was found to be without resources to meet current expenses, further issues of $110,000,000 in currency were made. The free-banking law which permitted the issue of notes by provincial banks was primarily responsible for this situation. Under the provisions of this law the provinces were authorized to borrow specie abroad and deposit the same with the national government as security for their issues. These loans aggregated £27,000,000. The Celman administration, in violation of the trust, then sold the specie and squandered the proceeds, leaving the provincial bank notes without guarantee and value. The national government has since assumed responsibility for all these provincial loans abroad. As on previous occasions, the great depreciation in the value of the currency has led to a repudiation of part of its nominal value. This depreciation reached its maximum in October 1891 ($460.82 paper for $100 gold), and remained between that figure and $264 during the next six years. To check these prejudicial fluctuations and to prevent too great a fall in the price of gold (to repeat a popular misconception), a conversion law was adopted on the 31st of October 1899, which provided that the outstanding circulation should be redeemed at the rate of 44 centavos gold for each 100 centavos paper, the official rate for gold being 227.27. Provisions were also made for the creation of a special conversion fund in specie to guarantee the circulation, which fund reached a total of $100,000,000 in March 1906. These measures have served to give greater stability to the value of the circulating medium, and to prevent the ruinous losses caused by a constant fluctuation in value, but the rate established prevents the further appreciation of the currency. On the 18th of January 1906 the currency in circulation amounted to $502,420,485, which is more than $95 per capita.

(A. J. L.)

History

The first Europeans who visited the river Plate were a party of Spanish explorers in search of a south-west passage to the East Indies. Their leader, Juan Diaz de Solis, landing incautiously in 1516 on the north coast with a few attendants to parley with a body of Charrua Indians, was suddenly attacked by them and was killed, together with a number of his followers. This untoward disaster led to the abandonment of the expedition, which forthwith returned to Spain, bringing with them the news of the discovery of a fresh-water sea. Four years later (1520) the Portuguese seaman, Ferdinand Magellan, entered the estuary in his celebrated voyage round the world, undertaken in the service of the king of Spain (Charles I., better known as the emperor Charles V.). Magellan, as soon as he had satisfied himself that there was no passage to the west, left the river without landing.

The first attempt to penetrate by way of the river Plate and its affluents inland, with a view to effecting settlements in the interior, was made in 1526 by Sebastian Cabot. This great navigator had already won renown in the service Cabot. of Henry VII. of England by his voyage to the coast of North America in company with his father, Giovanni Caboto or Cabot (see [Cabot, John]). Sebastian Cabot had in 1519 deserted England for Spain, and had received from King Charles the post of pilot-major formerly held by Juan de Solis. In 1526 he was sent out in command of an expedition fitted out for the purpose of determining by astronomical observations the exact line of demarcation, under the treaty of Tordesillas, between, the colonizing spheres of Spain and Portugal, and of conveying settlers to the Moluccas. Arrived in the river Plate in 1527, rumours reached Cabot of mineral wealth and a rich and civilized empire in the far interior, and he resolved to abandon surveying for exploration. He built a fort a short distance up the river Uruguay, and despatched one of his lieutenants, Juan Alvarez Ramon, with a separate party upon an expedition up stream. This expedition was assailed by the Charruas and forced to return on foot, their leader himself being killed. Cabot, with a large following, entered the Paraná and established a settlement just above the mouth of the river Carcarañal, to which he gave the name of San Espiritù, among the Timbú Indians, with whom he formed friendly relations. He continued the ascent of the Paraná as far as the rapids of Apipé, and finding his course barred in this direction, he afterwards explored the river Paraguay, which he mounted as far as the mouth of the affluent called by the Indians Lepeti, now the river Bermejo. His party was here fiercely attacked by the Agaces or Payaguá Indians, and suffered severely. Cabot in his voyage had seen many silver ornaments in the possession of the Timbú and Guarani Indians. Some specimens of these trinkets he sent back to Spain with a report of his discoveries. The arrival of these first-fruits of the mineral wealth of the southern continent gained for the estuary of the Paraná the name which it has since borne, that of Rio de la Plata, the silver river. As Cabot was descending the stream to his settlement of San Espiritù, he encountered an expedition which had been despatched from Spain for the express purpose of exploring the river discovered by Solis, under the command of Diego Garcia. Finding that he had been forestalled, Garcia resolved to return home. Cabot himself, after an absence of more than three years, came back in 1530, and applied to Charles V. for means to open up communications with Peru by way of the river Bermejo. The emperor’s resources were, however, absorbed by his struggle for European supremacy with Francis I. of France, and he was obliged to leave the enterprise of South American discoveries to his wealthy nobles. Cabot’s colony at San Espiritù did not long survive his departure; an attempt of the chief of the Timbús to gain possession of one of the Spanish ladies of the settlement led to a treacherous massacre of the garrison.

Two years after the return of Cabot, the news of Francisco Pizarro’s marvellous conquest of Peru reached Europe (1532), and stirred many an adventurous spirit to strive to emulate his good fortune. Among these was Pedro Mendoza. de Mendoza, a Basque nobleman. He obtained from Charles V. a grant (asiento) of two hundred leagues of the coast from the boundary of the Portuguese possessions southward towards the Straits of Magellan, and the inland country which lay behind it. Mendoza undertook to conquer and settle the territory at his own charges, certain profits being reserved to the crown. In August 1534 the adelantado, or governor, sailed from San Lucar, at the head of the largest and wealthiest expedition that had ever left Europe for the New World. In January 1535 he entered the river Plate, where he followed the northern shore to the island of San Gabriel, and then crossing over he landed by Buenos Aires. a little stream, still called Riachuelo. The name of Buenos Aires was given to the country by Sancho del Campo, brother-in-law of the adelantado, who first stepped ashore. Here, on the 2nd of February, Mendoza laid the foundations of a settlement which in honour of the day he named Santa Maria de Buenos Aires. Mendoza, after some fierce encounters with the Indians, now proceeded up the Paraná, and built a fort, which he called Corpus Christi, near the site of Cabot’s former settlement of San Espiritù. The expedition, which originally numbered 2500 men, was reduced by deaths at the hands of the Indians, by disease and privation, within a year to less than 500 men. From Corpus Christi, Mendoza sent out various bodies to explore the interior in the direction of Peru, but without much success, and at length, thoroughly discouraged and broken in health, he abandoned his enterprise, and returned to Spain in 1537.

A portion of one of the expeditions he despatched, under Juan de Ayolas, pushing up the Paraguay, is said to have reached the south-east districts of Peru, but while returning laden with booty, was attacked by the Payaguá Indians, and every man Asunción perished. The other portion, which had stayed behind as a reserve under Domingos Iralá, had better fortunes. Finding their comrades did not return, Iralá and his companions determined to descend the river, and on their downward journey opposite the mouth of the river Pilcomayo, finding a suitable site for colonizing, they founded (1536) what proved to be the first permanent Spanish settlement in the interior of South America, the future city of Asunción (15th August 1536).

In the meantime the colony at Buenos Aires had been dragging on a miserable existence, and after terrible sufferings from famine and from the ceaseless attacks of the Indians, the remaining settlers abandoned the place and made their way up Iralá the river first to Corpus Christi, then to Asunción. Here, by the emperor’s orders, the assembled Spaniards proceeded to the election of a captain-general, and their choice fell almost unanimously on Domingos Martinez de Iralá, who was proclaimed captain-general of the Rio de la Plata (August 1538). In 1542 the settlement of Buenos Aires was re-established by an expedition sent for the purpose from Spain, under a tried adelantado, Cabeza de Vaca. This able leader, eager to reach Asunción as quickly as possible, sent on his ships to the river Plate, but himself with a small following marched overland from Santa Catherina on the coast of Brazil to join Iralá. His doings at Asunción belong, however, not to the history of Argentina, but of Paraguay. Suffice it to say that differences with Iralá eventually led to his arrest, and to his being sent back to Spain to answer to the charges brought against him for maladministration. The second settlement made by his expedition at Buenos Aires was even less successful and long-lived than the first. Exposed to the incessant attacks of the savages, the piace was a second time abandoned, February 1543.

Forty years were now to elapse before any further efforts were made by the Spaniards to colonize any part of the territory of the river Plate and lower Paraná. In 1573 Juan de Garay, at the head of an expedition despatched Juan de Garay. from Asunción, founded the city of Santa Fé near the abandoned settlements of San Espiritù and Corpus Christi. Seven years later (1580), when the new colony had been firmly established, Juan de Garay proceeded southwards, and made the third attempt to build a city on the site of Buenos Aires; and despite the determined hostility of the Querendi Indians he succeeded in finally gaining a complete mastery over them. In a desperate battle, the natives were defeated with great slaughter, and the territory surrounding the town was divided into ranches, in which the conquered natives had to labour. The new town received from Garay the name of Ciudad de la Santissima Trinidad, while its port retained the old appellation of Santa Maria de Buenos Aires. It was endowed by its founder with a cabildo (corporation) and full Spanish municipal privileges. Garay, when on his way to Santa Fé, was unfortunately murdered by a party of Indians, Minuas (Mimas), three years later, while incautiously sleeping on the river bank near the ruins of San Espiritù. The new settlement, however, continued to prosper, and the cattle and horses brought from Europe multiplied and spread over the plains of the Pampas.