40 MODERN MONETARY SYSTEMS
equivalent to 227-27 paper piastres for 100 gold piastres.
This same law also created a Conversion Office for the pur-
pose of receiving gold in exchange for new notes which it
was to issue at the legal rate of 44 gold centavos to one
piastre, and vice versa of supplying gold at the same rate
in exchange for the currency notes.!
The right to repayment in gold was to have been ex-
tended to the notes of previous issues, which were thus to
become convertible, and the Conversion Office was to
have had the task of securing that she entire fiduciary cur-
rency should be convertible at a fixed rate.
But the Office had not been endowed in the first in-
stance with a sufficient stock of gold to be able even to
convert the fiduciary currency in quantities adequate to
the exigencies of foreign payments ; and, as in the case of
India, it was only after a series of good years, when the
Trade Balance was favourable and gold received from
abroad was deposited in exchange for notes and accumu-
lated, that the Office was in a position to operate. But
from 1903 onwards, as the deposits of gold exceeded the
withdrawals, the Conversion Office was able to supply
any gold which might be required to meet a Trade deficit,
and the exchange was thus stabilised within the gold points
corresponding to the new parity.
The gold coin and bullion held by the Office exceeded
so million gold piastres from 1904 onwards, rose to 102
millions in 1906, and, in spite of a serious crisis in 1907-38,
reached 222 millions in 1912. The stock of gold, to-
gether with the reserve kept by the Conversion Office,
henceforward provided the total paper currency with a
cover of nearly 72 9, comparable to that of the most reput-
able Banks of Issue; and the monetary system of the
Argentine was to operate with perfect regularity until it
1 The text of this law is to be found, e.g., in M. Masson-Forestier’s
thesis “Les caisses de conversion et la réforme monétaire en Argentine
et au Brésil,” Paris, 1913, and a commentary by its author in M. J. M.
Rosa’s “La reforma monetaria en la Republica Argentina,” Buenos-Aires,
Lois, 1909. (See also M. Réné Théry’s “Rapport des changes avariés et des
réglements extérieurs,” Paris, 1912.)
