Aristides D. answered • 09/11/20
La excelencia es lo primero
Increase in imports, Increase in exports and European aid
After Argentina became emancipated from Spain in 1810, the control of commercial activity by a small group of Spanish merchants came to an end. The First Junta, the first national government established after the Revolution of May 1810, oscillated between open-ended and protectionist policies. The First Triumvirate (1811-1812), influenced by Bernardino Rivadavia, promoted unrestricted trade with Great Britain. The Second Triumvirate (1812-1814) and José Artigas —who controlled the Federal League during the 1815-1820 period— sought to restore the initial protectionist policy, plus the Supreme Director reinstated free trade again. Therefore, the Rio de la Plata economy became one of the most open economies in the world.
Each province issued its money, which had a different value from one another; and it could even vary between cities in the same province. Export-related activities enjoyed a certain degree of prosperity, as happened in Tucumán, where clothes were manufactured, and in Córdoba and on the coast, where breeding cattle were practiced in order to supply the requirements of the mines of Upper Peru. .
British influence in national politics increased. It was based on five main axes: totally free trade without any protectionist measures against British imports; finance with a central bank run by British investors; absolute control of the port of Buenos Aires as the only source of income for the country; British exploitation of natural resources and the consolidation of the Unitary Party with its center in Buenos Aires.
Gold exports, allowed by free trade policies, quickly depleted national reserves. This represented a big problem, since gold was the medium of exchange for the local economy. Rivadavia sought to solve this problem by establishing the "Discount Bank", a central bank authorized to print paper money. Despite the role it played, this bank was turned over to British private investors. In the middle of the 1820s, Manuel José García, Bernardino Rivadavia's Minister of Finance, asked for a loan of 2.8 million pounds sterling. Finally, only about 0.57 million pounds sterling reached Buenos Aires, mostly in bills of exchange. None of the planned works was carried out with that money. The loan would be paid off eighty years later. The cancellation of the £ 2.8 million loan amounted to £ 23.7 million (or almost 8 times more). In the 1820s, the paper peso began to devalue rapidly with respect to the strong peso, which was directly tied to the price of gold.
John Murray Forbes's report to John Quincy Adams, —the sixth president of the United States— in 1824, mentioned that Great Britain had a great influence on the country's economic policies: the government in Buenos Aires was so eager to be in good terms with Great Britain that most of its official institutions (such as the bank) were under the control of Great Britain, and that Great Britain did in fact exercise control over the Argentine economy similar to that it had over its own colonies, without this situation will demand financial, civil and military costs. The lack of an Argentine merchant fleet gave Great Britain control of maritime trade. Forbes' testimony must be appreciated from the perspective of the rivalry that at that time faced the American and British commercial interests, resulting in a natural partiality and "jealousy and even antipathy" towards the English in the Río de la Plata.
