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The Baring Crisis Revisited

Published online by Cambridge University Press:  05 February 2009

H. S. Ferns
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Extract

Several accounts of the Baring crisis, 1890–7, are available.1 Among these is my own, chapter xiv of Britain and Argentina in the Nineteenth Century (Oxford, 1960), based upon the Foreign Office papers in the Public Record Office, contemporary periodical literature and secondary works such as the now little-noticed classic, J. H. Williams, Argentine International Trade under Inconvertible Paper Money, 1880–1900 (Cambridge, Mass., 1920). My first purpose in exploring beyond the sources used forty years ago, in the archives of the Bank of England, Baring Brothers & Co., N. M. Rothschild, W. H. Smith and the Marquis of Salisbury, is to correct at least one error in my original work, and this unfortunately repeated by others. My second is to discover whether or not further study of archival material confirms, modifies or denies any of my first conclusions about the role of the Argentine government in the solution of the Baring crisis.

The principal error corrected concerns the form of Barings' involvement in Argentine affairs in the late 1880s. They did not get into difficulties because they underwrote a large loan to the Argentine government for the purpose of expanding the water supply and sewage system of Buenos Aires. The fact is that they promoted a private enterprise which took over the water and sewage system of Buenos Aires, and this failed for a number of reasons set out below.

As to my original conclusions about the Baring crisis, they have been confirmed by the archival material considered. The solution of the Baring crisis was made possible by the policies devised and enforced by the Argentine government.

Type
Research Article
Information
Journal of Latin American Studies , Volume 24 , Issue 2 , May 1992 , pp. 241 - 273
Copyright
Copyright © Cambridge University Press 1992

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References

1 Perhaps the best known being, Clapham, J. H., The Bank of England, a History (Cambridge, 1944), volume ii, chapter viiGoogle Scholar; Ford, A. G., ‘Argentina and the Baring Crisis of 1890’, Oxford Economic Papers, N.S. vol. 8, 1956CrossRefGoogle Scholar; Pressnell, L. S., ‘Gold Reserves, Bank Reserves and the Baring Crisis of 1890’, in Essays in Money and Banking in honour of R. S. Sayers, edited by Whittlesey, C. E. and Wilson, J. S. G. (Oxford, 1968)Google Scholar; Cuccorese, H., ‘La versión histórica sobre crisis de Baring Brothers’, Investigaciones y Ensayos, vol. 20 (Buenos Aires, 1976), pp. 265–321Google Scholar; Ziegler, P., The Sixth Great Power: Barings, 1762–1929 (London, 1988), chapter xivGoogle Scholar; Marichal, C., A Century of Debt Crises in Latin America(Princeton, 1990), chapter vi.Google Scholar

2 Dawson, F. G., The First Latin American Debt Crisis (London, 1990), pp. 79–80Google Scholar; Fitte, E. J., Historia de un emprestito (Buenos Aires, 1962)Google Scholar; Amaral, S., ‘El emprestito de Londres de 1824’, Desarrollo Económico 23, no. 92 (1984).CrossRefGoogle Scholar

3 Cairncross, A. K., Home and Foreign Investment, 1870–1913 (Cambridge, 1953), p. 94.Google Scholar

4 Barings' Archives (BA), Baring Brothers, Foreign, Colonial and Company Issues before 1939.

5 BA, H.C.4.1.65.

6 BA, H.C.4.1.65, Part i, Bouwer to Barings, 26 Dec. 1876.

7 BA, H.C.1.65, Part i, Bouwer to Barings, 11 Feb. 1877.

8 BA, H.C.1.65, Part i, Bouwer to Barings, 31 Aug. 1877.

9 BA, H.C.1.65, Part v, Bouwer to Barings, 10 April 1879.

10 BA, H.C.1.65, Part v, Bouwer to Barings, 17 Jan. 1880.

11 BA, H.C.1.65, Part v, Bouwer to Barings, 21 Oct. 1880.

12 BA, H.C.1.65, Part v, Bouwer to Barings, several letters in March 1881.

13 BA, Baring Brothers, Foreign, Colonial and Company Issues before 1939.

14 Marichal, , A Century of Debt Crises, appendix B, pp. 247–248.Google Scholar

15 Platt, D. C. M. (ed.), Social Welfare, 1850–1950, Australia, Argentina and Canada Compared (London, 1989), pp. 157–158.CrossRefGoogle Scholar

16 O'Hagan, H. Osborne, Leaves from my Life (London, 1929), vol. 1, p. 376.Google Scholar

17 British Library, Hamilton Diaries, 8 Jan. 1891.Google Scholar

18 Ziegler, , Barings, p. 200.Google Scholar

19 BA, H.C.3.1.142.

20 Ziegler, , Barings, pp. 227–228.Google Scholar

21 BA, H.C.4.1.171, Sandford to Barings, 6 Oct. 1884.

22 BA, H.C.4.1.65, Bouwer to Barings, 10 Jan. 1886.

23 BA, H.C.4.65, various letters of Bouwer to Barings, 1881–3.

24 Ziegler, , Barings, p. 254.Google Scholar

25 BA, H.C.4.1.124, Part ix, 1 May 1894.

26 Public Record Office, FO 6/404 Pakenham to Salisbury, 15 Oct. 1889.

27 BA, uncatalogued box of letters (Ubl.), Baring to Revelstoke, 14 Jan. 1890.

28 BA, Ubl., Baring to Revelstoke, 4 Jan. 1890.

29 BA, Buenos Ayres Water Supply & Drainage Company Limited, Report of the Proceedings at the Ordinary and Extraordinary Meeting of the Company…28 May, 1891, p. 5.Google Scholar

30 BA, Ubl., Baring to Revelstoke, 14 Jan. 1890.

31 BA, H.C.4.1.71, Part i.

32 BA, H.C.4.1.116, López to Barings, 30 Sept. 1890.

33 BA, H.C.4.1.116, Pellegrini to Barings, 1 Oct. 1890.

34 Bank of England Archives, G 15/189. In a printed communication to the shareholders of the Buenos Ayres Water Supply & Drainage Company Limited.

35 BEA, G15;/181, 2481/1, Note by Bertram Currie.

36 BEA, G4/113, 2484/1, Minute of the Court of Directors, 20 Nov. 1890.

37 Ibid.

38 BEA, G15/18, estimates appended to B. M. Currie and B. B. Greene to the Governor of the Bank of England, 14 Nov. 1890.

39 The Economist, 6 June 1891.Google Scholar

40 Ibid., 7 March 1891.

41 An example, ibid., 9 Dec. 1890.

42 The text of the Plan Recommended by the Committee on Argentine Finances at their Meeting in the Bank of England was printed in The Economist, 27 Nov. 1890.Google Scholar Material on all aspects of the Rothschild Committee is to be found in BEA, 91517.

43 BA, Buenos Ayres Water Supply & Drainage Company Limited, Report of the Proceedings of the Ordinary and Extraordinary Meeting of the Company held on Thursday, 28th May, 1891 and Adjourned Extraordinary meeting held on 11th June, 1891.Google Scholar

44 BA, H.C.4.1.124, Essex Reade to Barings, 28 Oct. 1891.

45 PRO, FO 6/429, private letter of Welby to Clarke-Jervoise, 13 Feb. 1893.

46 BA, H.C.4.1.115, Domínguez to Barings, 28 Dec. 1892.

47 BA, H.C.4.1.115, Domínguez to Barings, 4 Jan. 1893.

48 BA, H.C.4.1.124, Reade to Barings, 9 Jan. 1893.

49 Ibid.

50 BA, H.C.4.1.124, Romero to Reade, 10 March 1893.

51 BA, H.C.4.1.124, Part v, telegrams from Reade to Barings and Barings to Reade.

52 BA, H.C.4.1.124, Part v, Reade to Barings, 20 April 1893.

53 BEA, G15/193.

54 N. M. Rothschild Archives, RAL XI/111/20, telegram Rothschild to Romero, 2 May 1893.

55 NMRA, RAL XI/111/20, telegram Romero to Rothschild, 11 May 1893.

56 NMRA, RAL XI/111/20, telegram Rothschild to Romero, 12 May 1893.

57 NMRA, RAL Xl/111/20, telegram Avellaneda to Rothschild, 11 June 1893.

58 BEA, G15/191, Governor's statement to the Court, 14 Sept. 1893.

59 For further details see Ferns, H. S., The Argentine Republic: National Economic History (Newton Abbot, 1973), pp. 81–86.Google Scholar

60 Ford, A. G., The Gold Standard, 1880–1891, Britain and Argentina (Oxford, 1962), p. 96.Google Scholar

61 Ortiz, R. M., Historia Económica de la Argentina (Buenos Aires, 1964), vol. ii, p. 296.Google Scholar

62 Foreign political intervention as a ‘solution’ of the debt crisis, its repudiation and the Argentine response to suggestions of this kind have seemed to me outside the scope of this article. This study has, however, thrown up additional information on this subject, but none that requires any modification of the conclusions set forth in my Britain and Argentina in the Nineteenth Century.