½ Real – Buenos Aires

In 1840, Buenos Aires existed within the tumultuous political and economic landscape of the Argentine Confederation, a period defined by the rule of Governor Juan Manuel de Rosas. The currency situation was chaotic and fragmented, reflecting the deep political divisions of the time. The port city, as a separate province, issued its own paper money—pesos fuertes in notes—while the interior provinces under the Confederation often circulated their distinct, and frequently depreciated, currencies. This lack of a unified national monetary system severely hampered trade and economic stability.

The core of the crisis was the over-issuance of paper money (billetes) by the Buenos Aires government to finance its ongoing military campaigns, particularly the costly conflicts against the Unitarian opposition and the French blockade of the port (1838-1840). This led to severe inflation and a dramatic gap between the face value of paper currency and its real value in precious metal. A complex system of exchange rates emerged, with gold and silver commanding a significant premium over paper, effectively creating a dual-currency economy where daily transactions were fraught with uncertainty and loss.

Furthermore, public trust in paper money was exceedingly low. The notes, often crudely printed and easy to counterfeit, circulated alongside a variety of foreign coins, including Spanish, Brazilian, and British sterling, which were hoarded for their intrinsic value. This monetary anarchy stifled long-term investment and credit, placing a heavy burden on merchants and the populace. The currency chaos of 1840 was thus both a symptom and a cause of the broader instability, underscoring how Rosas’s political control was maintained at the expense of economic cohesion and prosperity.