The “Conversion of Hard Dollars” loan was issued in virtue of the law of 2nd July 1889, which authorised an issue of £2,600,000 to be applied to the conversion of debts contracted in hard piastres. The new stock was to yield an interest of 3-1/2 per cent., with 1 per cent. redemption. The issue actually amounted to £2,659,500. The “Consolidation Loan” (authorised 24th January 1891) was one of the most important credit transactions ever effected in the Argentine Republic: a transaction which evokes memories of a critical period which we ought briefly to recall. When Signor Pellegrini’s Government came to power, on the 6th August 1890, the country was suffering from a political upheaval, and at the same time was entering upon a time of severe financial crisis, “the most violent, the most desperate crisis which has ever afflicted the Republic, and put its honour to the test,” according to the words of Vincenzio Lopez, the eminent finance Minister of that administration. The Treasury had exhausted its resources, in order to increase and support the funds of the National Bank, whose debt to the Government amounted to $47,491,483[104] in paper, and £2,528,224 in gold, while its debt to foreign creditors amounted to £3,708,037, and to home creditors £2,328,800. [Footnote 104: This amount is not reduced to gold, the rate of exchange not being fixed at the time.——[TRANS.]] If the situation of the National Bank, which served as the Government’s treasury, was serious, that of the National Mortgage Bank and that of the City of Buenos Ayres were no less grave. The first owed $1,690,833 in paper and £111,475 in gold in dividends, and the second was drained dry by its debts, amounting to $34,646,533 paper and £92,339 gold at home, as well as £1,960,000 abroad. From the outset the Government concentrated all its efforts upon the solution of these three grave problems. It proposed the reconstitution of the National Bank; it would enable the Mortgage Bank to continue operations, chiefly by repaying the advances which it had made to the State; and assist the City of Buenos Ayres to meet its engagements in respect of the interest of the foreign debt, constraining it to collect and employ the municipal revenues in a more methodical manner. The prime object of this important transaction was “to give the country a period of economic repose, by provisionally suspending the removals of metallic currency for the liquidation of the nation’s foreign engagements,” as the Government declared in the message which accompanied its proposal. To achieve this end, the creation of a consolidation loan was proposed, amounting to £12,000,000, and increased later on to £15,000,000 upon the advice of the lenders, the result being destined, for a period of three years, for employment in paying the interest on the nation’s loans and in relieving the Treasury of the burden of guaranteeing the dividends of the railways.