The principles on which the establishment of this institution is based——The necessity of a rapid redemption of fiduciary money—— The imperfect success of this programme——New issues of notes—— New attributes of the _Caisse_ dating from 1899——The exchange of paper for gold and _vice versa_——The development of this system of exchange——The authority attaching to the _Caisse_. Among the official institutions which are closely connected with the issue and redemption of paper money, the _Caisse de Conversion_ demands a special place, on account of the important part which it plays in the financial life of the Republic. This establishment was created in 1890, at a moment particularly critical for the credit of the country, when the terrible crisis occurred which ruined several banks and resulted in a depreciation of the fiduciary currency which exceeded all expectation. The Government which presided over the destinies of the country understood that it was necessary, in order to ameliorate such a situation, to put some means into practice which should ensure a more gradual movement of paper, its reduction in no matter what form, and its future convertibility within a short and definite period, as the message declared which accompanied the draft of the law submitted to Congress. In obedience to these excellent principles of financial and banking policy, it proposed the creation of a Junta or a special Directorate, “independent in its action, and uniting the necessary faculties for the recovery, administration, and application of the elements that must be confided to it for the effectual accomplishment of its important mission.” An “important mission” it was indeed that was confided to the Junta by law; for this body was to see the gradual conversion and redemption of paper money, supervise the strict execution of all the laws relating to paper money, and oversee all issues of the same. With the object of effecting, sooner or later, the actual and effective conversion of paper money, the law created a “Conversion Fund,” composed of the metallic reserves of the guaranteed banks, the sums for which these same banks would be debitors on account of the value of stock bought as guarantees, the public funds issued to guarantee the bank issues, and all the sums which, in virtue of other legislative enactments, might be destined to the conversion of bank paper, and especially those proceeding from economies made out of the general budgets. The Executive attached a special significance to this fund, proposing to use it to great advantage in the future; if the succeeding Governments had the wisdom to maintain the elements indispensable to the regular circulation of the national currency.