During the period 1897 to 1900 the Government created various issues of 4 per cent bonds in settlement of national railway guaranties in arrears and for the settlement of obligations of the Provinces of Buenos Aires, Santa Luis, Corrientes, and Mendoza, as well as the City of Buenos Aires and the Santa Fe Railways. Bonds amounting to £31,870,890 were issued for this purpose, of which £22,869,195 remained outstanding on December 31, 1923. These bonds are mostly held in Great Britain, France, and Belgium. A cumulative sinking fund of one-half of 1 per cent per annum is provided for the service of these loans.

STEADY ADVANCEMENT IN CREDIT AND VALUE OF SECURITIES

Following the readjustment of its finances the credit of the Republic steadily improved, and the value of its securities steadily advanced. In the years 1907 to 1911 several important loans were authorized. Although these were classed by the Government as internal loans, they were practically all sold abroad.

The 5 per cent internal gold loan of 1907 was authorized to the amount of £7,000,000. These bonds were issued in London, Berlin, and Paris.

In 1908 the Government issued £892,857 4 per cent gold bonds to the Argentine North Eastern Railway to cover part of the cost of certain extensions. In 1910 additional £466,269 4 per cent bonds were issued to this railway in part payment for its extension to connect with the Paraguay Central Railway.

The city of Buenos Aires in 1909 issued in London and Germany £2,976,180 in bonds secured by certain taxes. These bonds were assumed in 1913 by the National Government.

The Federal Government in 1909 issued £10,000,000 5 per cent internal gold bonds distributed as follows: £2,960,000 in London, £3,400,000 in Paris, £1,640,000 in Berlin, and £2,000,000 in New York. A portion of the bonds offered in New York were resold abroad. The proceeds of the loan were used to provide for railways and other public works. The sinking fund is 1 per cent per annum, cumulative. These bonds to the amount of £8,006,980 remained outstanding on December 31, 1923.

A 5 per cent loan for £1,209,600 was floated in 1910 to provide funds to purchase the Cordoba & North Western Railway for the Government. The offering price was 101. On December 31, 1923, £1,003,020 of these bonds were outstanding.

In 1911 a 350,000,000-franc 41⁄2 per cent internal gold loan was floated in Paris and Antwerp at 991⁄2 to provide funds for certain public works. The sinking fund is 1 per cent per annum cumulative. On December 31, 1923, 295,107,000 francs remained outstanding. An issue of £1,613,600 5 per cent bonds of the port of the capital (Buenos Aires) was authorized in 1913 for extension and additions to the port. Approximately £1,000,000 of these bonds were sold to the public at 99, the balance being issued to contractors. In the same year 5 per cent bonds to the amount of £1,367,500 were authorized and subsequently issued to the various railway companies for the construction of irrigation works.

BONDS ISSUED DURING 1915

In 1915 the condition of the financial markets of Europe brought about by the war compelled Argentina to seek new channels for funds to carry out certain public works that were under way and to meet the necessary financial requirements of the country. The first issue was in 6 per cent treasury bonds to the amount of £5,000,000 and $25,000,000. The sterling bonds were offered in London and the dollar bonds in New York. The proceeds of the issue, which matured May, 1920, were used to retire £9,000,000 treasury bills and to pay for public works.

TOTAL BONDS OUTSTANDING-POSITION OF FOREIGN INVESTORS

Large additional amounts of short-term bonds were sold in the United States during 1916 and 1917. These were all repaid at

maturity.

In September, 1920, a syndicate of American bankers offered to the public an issue of $50,000,000 7 per cent two-year notes at 99% and interest, the proceeds to be used to repay advances to the Argentine Government by the Banco de la Nación. The notes were dated October 1, 1921, and matured October 1, 1923. They were not callable prior to maturity, at which time they were retired through the sale in New York of six-month 6 per cent treasury notes to the amount of $55,000,000.

On February 1, 1922, $27,000,000 five-year 7 per cent bonds, due February 1, 1927, were issued. These bonds are not callable and there is no sinking fund. The bonds were quoted on the New York Stock Exchange at 103 in February, 1925. The original offering price was 99 and interest.

In September, 1923, two New York banking houses offered $55,000,000 Government of Argentina six-month 6 per cent treasury gold notes. The proceeds of this loan were used for the purpose of retiring the $50,000,000 two-year 7 per cent notes due October, 1923, as above reported. These notes matured on March 1, 1924. In 1923 the city of Buenos Aires floated a 60,000,000 paper pesos 62 per cent internal loan, a part of which was offered in the United States at the rate of $320 per 1,000 pesos. It is estimated that $500,000 of American capital was invested in this loan.

On January 17, 1924, $40,000,000 6 per cent external sinking fund gold bonds of 1923, series "A," dated September 1, 1923, due 1957, interest payable March 1 and September 1, were issued in New York at 962. The bonds are in denominations of $500 and $1,000, registerable as to principal only. Beginning March 1, 1924, a sinking fund of one-half of 1 per cent of the maximum amount of bonds outstanding is to be set aside each six months, plus an amount equal to the interest accrued and unpaid on all bonds acquired through the operation of the sinking fund to the date of each sinking-fund payment. The sinking fund will purchase bonds below par or, if necessary, draw them at par and may be increased at the discretion of the Government. A part of series "A" bonds are issuable in sterling in denominations of £20, £100, and £200, under conditions similar to the dollar issue. The bonds were quoted in New York in February, 1925, at 962. This new issue of dollar bonds provided for part of the six-month notes issued September 1, 1923, to refund the $50,000,000 7 per cent notes which matured October, 1923, described above.

In February, 1924, Argentina sold in New York $20,000,000 51⁄2 per cent six-month certificates at par for refunding purposes. These certificates were redeemed in August, 1924. On June 16, 1924, a new issue of $10,000,000 52 per cent Argentine Treasury gold certificates was subscribed for by New York bankers. Proceeds of this loan are understood to have been used for financing the repair of two Argentine battleships built in this country. This loan matured in June, 1925. In September, 1924, the Argentine Government was again in the New York market and an issue of $5,000,000 in the form of 4 per cent six-month certificates was offered, the proceeds to be used for the purchase of steel sheets to forestall damage by locusts in the agricultural sections of Argentina. In August, 1924, a new shortterm loan was issued to the amount of $20,000,000 5 per cent sixmonth certificates maturing in February, 1925, to redeem the certificates issued in February for a like amount. In December, 1924, a 6 per cent 34-year series "B" loan of $30,000,000 was issued in New York for the purpose of reducing the Government's floating debt. The bonds were issued at 95 and are redeemable through the operation of a cumulative sinking fund of one-half of 1 per cent of the maximum value of the amount outstanding. Principal and interest is payable in United States gold coin without deduction for any Argentine taxes or impositions present or future.

Argentine bonds in normal pre-war times enjoyed great favor in Europe. During the period 1911 to 1914 most of the 5 per cent issues sold as high as 104 to 106, the 42 per cent bonds as high as 102, the 4 per cent bonds at 911⁄2 and the 31⁄2 per cent bonds at 862. The following table shows the quotations of the Argentine Government loans on the London Stock Exchange:

1 The par value of each of these bonds is £100 (see general text). Coupons on most of these issues are payable semiannually, the dates varying.

2 Amount authorized.

INTERNAL DEBT OF ARGENTINA

The internal debt of Argentina as of September 30, 1924, was as

follows:

The principal obligations in paper pesos on the above date were (a) the 5 per cent internal credit of 1905, outstanding to the amount of 64,921,280 paper pesos. These bonds were quoted on the Buenos Aires Stock Exchange in September, 1924, at 90; (b) the 5 per cent internal bonds of 1911, quoted at 86 in September, 1924, of which 83,099,200 pesos were then outstanding; and (c) the internal credits of 1922 and 1923, of which 59,016,700 pesos and 98,361,800 pesos, respectively, were outstanding in September, 1924. These bonds were then quoted in Buenos Aires at 97.80 and 97, respectively.

FLOATING DEBT OF ARGENTINA

The following statement (in paper pesos) of the Argentine floating debt as of June 30, 1924, is taken from the report of the Minister of Finance, submitted to the Argentine Congress on August 29, 1924:

The Executive on December 22, 1924, promulgated law 11319, extending the budget for 1924, which had expired on November 26, so as to cover the remainder of the calendar year and to continue in effect until such time as the 1925 budget might be passed by Congress.

The 1924 budget provided for expenditures amounting to 568,033,668 paper pesos, while the proposed budget for 1925 shows an increase in cash expenditures of 20,283,119 paper pesos. The proposed budget for 1925 provides for an increase in the appropriation for the service of the public debt from 125,146,821 to 148,763,250 paper pesos. The latter amount includes an item of 8,300,000 pesos for the amortization of the short-term floating debt.

The ordinary administrative expenditures of the Government, exclusive of public debt service, pensions, supplementary credits, and public works, show a reduction of 6,521,614 paper pesos, as compared with the 1924 figures, but the item of pensions and retirements is increased from 20,348,747 paper pesos in 1924 to 23,537,052 for 1925, so that the actual reduction in administrative expenditures is really 3,333,309 paper pesos.

The increase in the appropriation for public debt service amounts to 23,616,428 paper pesos, so that the proposed budget for 1925 will exceed that for 1924 by 20,283,119 paper pesos.

The budget includes an appropriation for the payment of the service of the public debt, of the Provinces of Buenos Aires, Santa Fe, Cordoba, Entre Rios, Mendoza, and Tucuman, amounting in all to 3,953,699 paper pesos. These debts of the Provinces were assumed by the Federal Government in 1898, in view of the difficult financial situation of the Provinces at that time, and because of its desire to protect Argentine credit abroad, but none of the Provinces has complied with the terms of the agreement.

The budget now includes an item of 8,300,000 paper pesos to be set aside for the amortization of the short-term floating indebtedness. The Argentine national budget has shown a deficit for a number of years. To meet these deficits, the Government has had to resort to borrowing and to the creation of new sources of revenue. In the estimate of revenue for 1919, for example, an entirely new source was proposed, namely, the income tax.

The actual receipts and expenditures of the National Government for the period 1913 to 1923, the figures for 1923 being estimates of the Minister of the Treasury, are as follows: