The projects for Argentine liquidation, which involve the fate of
the Barings and the risk of their guarantors, have at last come to a head. The Republican Government offers £1,565,000 a year for five years, leaving the bondholders to divide the money among themselves. The bondholders, through the Rothschild Committee, have accepted, and propose that the "priority debts "—that is, the debts secured on Customs— should submit to a reduction of 1 per cent., to be paid back after five years ; and that the " unsecured debtors" should accept 60 per cent. of the face-value of the coupons, and not be paid back. Under this arrangement the Republic is treated as an ordinary bankrupt with secured and unsecured debts, which the late Mr. Bagehot used to argue was unfair, all the revenues of a State being equally pledged to all its creditors. The injustice might however be borne, but that in order to benefit the Barings and relieve their guarantors, the Waterworks Debt for water- works in Buenos Ayres has been thrust violently among the secured debts. It is not a secured debt at all, even if it is a debt which ought to be paid ; and had it been in the hands of the public, would hardly have been men- tioned. It is possible, therefore, that the indignation created by this arrangement may prevent final acceptance of the proposals ; though it is more probable that the bond- holders, weary of delays and aware of the uselessness of seeking justice from great financiers, will growlingly submit. They will be prudent in so doing, for another revolution is pending in Argentina.
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