“The bonds of that debt were quoted on the London Exchange; but in time they were quoted no more, for they had at length lost all value; even their name was erased. A day came, however, when the children of Argentina’s creditors went to search for their bonds among forgotten papers; and the bonds were redeemed. For many that was a day of legitimate surprise; the bearers had offered their paper to their debtors at any price; but now they were told that they would receive its written value. It was enough for them that they should be paid in future; but they were told that even the arrears of interest and amortisation should be arranged by means of new stock, which was known as Deferred Bonds. “When, among its assets, a nation possesses such a trait in its life as this——a trait unique in the financial history of the nations——it has the right to hold its head erect, affirming its honour and its credit.” Since that date, and during thirty-six years, the country scrupulously paid the interest on its debt, until the disastrous year of 1890, when, as a result of the financial and political crisis, the most violent the country had ever suffered, the payment of the foreign debt began to be a matter of serious consideration for the Administration. Many schemes were proposed to help the State tide over that difficult time; but none of them included the repudiation of the debt. The Government then at the head of affairs accepted the most onerous of these schemes, because it was that which was most to the advantage of its creditors. The arrangement then decided on, known as the _Morituri_ loan, or Morgan loan, has been the subject of severe criticism; but one thing was not and will not be debated, namely, the noble and patriotic intention which inspired the authors of this transaction, and resolved them to safeguard the worthy traditions of Argentine credit. By respecting their foreign liabilities they served the truest interests of their country, and respected also the spirit of the Constitution, which holds that credit, and foreign credit in particular, should be the great constitutional resource, placed in the hands of Governments “for the urgent needs of the nation, or for undertakings of national ability.” CHAPTER III THE DOUBLE CURRENCY The persistence of the double currency——The history of paper money—— The origins of the premium on gold, and its almost continual increase——The year 1890 and the depreciation of the currency—— The causes of this depreciation; abuses in the issue of paper, caused by a bad financial and administrative policy.