SOME EXPERIENCES UNDER PAPER MONEY 407
fashion and without perturbation of the foreign exchanges. Argen-
tina procured from Great Britain in this period, and indeed in
later periods also, a great part of her railway material by this
simple process.
Not all, however, is accounted for in this way. Part of the
proceeds of the loans were wanted by the Argentines for expendi-
tures in their own country. In so far, there was remittance of
funds from London to Buenos Ayres, an effect on the foreign
exchange market, a train of consequences analogous to that which
appeared in the Argentine exports. Such goods as textiles, foods,
drinks, tobacco, were more freely imported into the country
because it was profitable to import them; because prices in the
Argentine, translated into gold on the basis of the gold premium,
made it profitable to bring them in. The fact that the gold pre-
mium was relatively low during the years 1886-89 made it easy to
pay for such imports, and they streamed in. When the crash of
1890-91 came, and the gold premium soared, the converse effect
was experienced. The gold premium remained high; domestic
prices fell. Imports were harder to pay for, and the volume of
imports declined.
It need not be said that the phenomena of these few years in
Argentina are again only of the transitional kind. As in the
United States during the corresponding period, conditions soon
changed and trade was no longer carried on under inconvertible
paper. This rapid change in the monetary situation makes it
impossible to trace the long-run effects which one might expect
ander paper conditions. Among the long-run effects, the read-
justment of the prices of export goods in such manner that they
shall conform to the range of prices prevailing for the purely
domestic goods is the most significant. It is also that which
requires, as regards agricultural products, most time; and this
not merely because of the obscuring influence of crop irregularities,
but because the mobility of labor and capital is peculiarly uncer-
tain in agriculture. In a country such as the Argentine then was,
and indeed still largely remains — with great latifundia and
great landed proprietors, the cultivators of the soil a submerged
