But there is still a cloud in the serene skies of the Republic; a cloud that might be the precursor of a truly national catastrophe, if the measures necessary to avert it were not taken in time. The peril arises neither from the economic situation, which is excellent, denoting an ever-increasing vitality, nor the relations of the Republic with the neighbouring nations, which are conceived in a spirit of peace and concord. Although a short-sighted diplomacy has attempted to envelop the relations between the Argentine and Brazil in an atmosphere of jealous distrust, there is no fundamental cause which might trouble the friendly relations of these two countries, which formerly fought side by side on the field of battle for the redemption of a sister nation. They have no conflicting economic interests which might divide them, and are destined to afford a great example of progress and of civilisation to the other States of South America. The peril to which we refer is of a totally different character: it is caused exclusively by the exaggerated expenditure of the public administrations, and the dangerous paths of armed peace upon which the country has entered; thus implanting, in young and free America, a ruinous system, which is ruining the nations of the Old World, burdens them with insufferable taxes, and diverts from production and labour too large a proportion of citizens. In order to face imaginary dangers, Congress and the Government have lately decreed that a sum of £40,000,000 shall be expended upon armaments. As for home politics, they form a domain which we do not desire to enter, and on which the world of affairs bestows little enough attention, so long as they do not compromise the public peace. The Argentine, in fact, is still under a system of personal power; the Presidency of the Republic is the focus about which all the political life of the country gravitates. In default of a people as conscious of its rights as of its duties, and possessed of the virtues necessary to a course of perseverance in democratic practices, it is the Government that manages the elections; and it is difficult to say whether it does so because there is no public opinion, or whether there is no public opinion because the Governments usurp the functions of the electorate. From this point of view there has been no change in the political _morale_ of the country; the only progress to be noted is that the parties resort less often than they used to violence as a solution of their quarrels. As for the administrative expenses, they are increasing with a rapidity only equalled by the growth of the fiscal resources of this fortunate country. Proposals for public works accumulate in the various Ministries, while waiting for the funds necessary for their execution; their total amounts to-day to the respectable figure of nearly £40,000,000.