Never had the financial concerns of the republic borne so creditable and promising an appearance. In this prosperity nothing was thought of but schemes for improvement of every kind; and projects were submitted to the government for a variety of public works, piers, docks, custom-houses, &c., some of which were of manifest utility. It was under these circumstances, and with a view to carry into effect some of the projected improvements, that the government of Buenos Ayres determined to endeavour to raise a loan in England, which there was no difficulty in obtaining upon the terms they stipulated for, viz., seventy per cent. At that price parties in London contracted with them for a loan, nominally, of a million sterling, to be raised upon bonds bearing interest at six per cent per annum, payable half-yearly. A sinking-fund of £5000 per annum was to be applied to their redemption, and the contractors were further allowed to keep back the amount of the dividends for the first two years. This, with charges, &c., reduced the sum to be paid over to the government of Buenos Ayres to about £600,000. The first half-yearly dividend became due on the third or fourth quarter of 1824. Whilst the government were deliberating, amongst the many projects before them, how to lay out this money to the best advantage, the quarrel broke out with the Emperor of Brazil for the possession of the Banda Oriental, which soon settled all difficulty on that point, and absorbed every dollar of the loan in preparations for the ruinous war which followed. From the commencement of that struggle not only were the expenses of the state enormously increased, but, when resources were most wanted, nearly the whole of its ordinary revenues (depending upon the duties on foreign trade) were suddenly cut off by the blockade of the river Plate instituted by the Brazilians, which lasted during the whole continuance of the war, viz., from December, 1825, to September, 1828,--nearly three years. In their emergencies the government determined to avail themselves of the bank, an establishment which had been set up by the leading capitalists of Buenos Ayres in 1822, upon the grant of an exclusive privilege of issuing notes _in that province_ for twenty years. It was entirely independent of the government, and was managed by directors annually chosen by the shareholders. To the mercantile body it was of great utility, and its notes, payable in specie on demand, in default of any national coinage, had become the ordinary currency of Buenos Ayres, and were as readily taken as gold or silver:--its capital was a million of dollars. But, as this could not be done compatibly with its independence and existing constitution, it was further, in an evil hour, resolved to alter entirely its original character.