Argentina’s 1881 Law No. 1130 unified national coinage and defined a gold-based unit (the peso oro). This created the legal framework for linking money to gold, even though convertibility would be suspended and restored multiple times afterward.
In 1885, Argentina suspended convertibility of its currency into gold. The suspension reflected the difficulty of maintaining gold backing under fiscal and financial pressure, foreshadowing later crises around fixed exchange commitments.
By 1890, Argentina faced a major financial and balance-of-payments crisis, closely linked to heavy borrowing and strain on the fixed exchange-rate commitment. The episode, widely known as the Baring Crisis, exposed how quickly confidence and reserves could collapse under a fragile monetary arrangement.
Argentina created the Caja de Conversión in 1890 to organize note issuance and support monetary stability. It functioned like a currency-board-style institution, aiming to regulate paper money and (when open) exchange it for gold at the legal rate.
In 1899, Law No. 3871 restored convertibility by fixing a new legal exchange parity: 1 peso oro equal to 2.2727 pesos moneda nacional (paper pesos). This avoided the deflation that would have been required to return to an earlier 1-to-1 parity and allowed the Caja de Conversión to operate with clearer rules.
From about 1900 to 1913, the restored gold-linked regime helped stabilize the currency and supported Argentina’s integration into international trade and capital markets. The system relied on maintaining adequate gold reserves and following “rules of the game” typical of the international gold standard.
In August 1914, at the start of World War I, Argentina suspended full convertibility of the peso into gold. This interruption reflected global financial disruption and the risk of rapid gold outflows, and it marked a long break in the direct gold-exchange mechanism of the Caja de Conversión.
Between 1914 and 1927, the Caja de Conversión remained closed, meaning the peso did not have routine gold convertibility. The currency’s value fluctuated rather than being mechanically anchored by gold exchange, even as policymakers often aimed to restore the prewar parity.
In 1927, Argentina restored convertibility, returning to the 2.27 paper-peso per peso-oro parity established in 1899. The reopening signaled a policy decision to reconnect to the gold standard discipline after years of wartime and postwar instability.
By 1928, the Caja de Conversión held very large gold reserves, reflecting strong external inflows during much of the 1920s. This seemingly strong reserve position mattered because it shaped how long Argentina could try to defend convertibility once external conditions turned against it.
After the global financial shock of 1929, Argentina’s ability to maintain gold convertibility deteriorated. Research on the period notes that gold convertibility was suspended in December 1929, as authorities tried to prevent a destabilizing drain of gold and contraction of the money supply.
In 1930, Argentina was hit by the Great Depression’s trade and financial shocks, intensifying pressure on reserves and the exchange rate. The crisis environment pushed authorities toward more direct management of foreign exchange and away from automatic gold-standard adjustment.
On October 13, 1931, Argentina adopted exchange controls requiring prior permits to buy foreign currency. This step formalized a move from a gold-linked convertibility framework toward administrative control of external payments, a key institutional break with the pre-1930 system.
Studies of 1929–1933 describe a multi-year transition that ended with Argentina’s final abandonment of the gold standard and a shift toward managed exchange-rate and monetary arrangements. The outcome helped define a longer period in which Argentina relied more on controls and state management than on gold convertibility.
Argentina: Convertibility, Gold Links and the End of Gold Convertibility (1899–1930)