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Title: The Argentine in the Twentieth Century
Author: Lewandowski, Maurice, Martinez, Albert B.
Language: English
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Copyright Status: Not copyrighted in the United States. If you live elsewhere check the laws of your country before downloading this ebook. See comments about copyright issues at end of book.

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                        The Modern World Series

                   By W. Harbutt Dawson.

                2. MODERN RUSSIA. By Gregor Alexinsky.

                3. JAVA, SUMATRA, AND THE OTHER
                   By A. Cabaton.

                   CENTURY. By Albert B. Martinez and
                   Maurice Lewandowski.

                5. THE JAPANESE EMPIRE AND ITS
                   ECONOMIC CONDITIONS. By Joseph

                          THE ARGENTINE IN THE
                           TWENTIETH CENTURY


              With a PREFACE by M. ÉMILE LEVASSEUR, Membre
           de l’Institut, and an INTRODUCTION by the late CH.
          PELLEGRINI, Ex-President of the Argentine Republic.

              Translated by BERNARD MIALL from the French
         of the Third Edition, revised and brought up to date.

                               WITH A MAP

                            T. FISHER UNWIN
                        LONDON: ADELPHI TERRACE


  CHAP                                                            PAGE

  AUTHOR’S NOTE                                                   xiii

  AUTHOR’S PREFACE TO THE THIRD EDITION                             xv

  PREFACE TO THE FIRST EDITION                                     xxv

  INTRODUCTION                                                     xli

  GENERAL PLAN AND METHOD OF THIS BOOK                              55

  THE ARGENTINE NATIONALITY                                         59

                                PART I.


  I. THE GEOGRAPHY OF THE ARGENTINE                                 71

        CLIMATE——SOIL——Geographical situation of the Argentine; its
            boundaries, its area.

        Climate of various districts. The prevailing winds. Nature of the
            soil; its fertility; adaptation to the culture of cereals
            and the raising of live-stock——Transformation of virgin into
            fertile land——The Pampa——The cultivable area——Conditions
            favourable to production——The plague of locusts.

        RIVERS——Their exceptionally favourable influence——The
            hydrographic system——Network of navigable river-ways: the
            Rio de la Plata, the Rio Parana——Conditions of navigability——

        PORTS——List of the principal ports, with a summary of their
            trade——Buenos Ayres: description of the port, its area, its
            capacity, tonnage; its docks——The Central Produce Market——
            Importance of Buenos Ayres in comparison with the great ports
            of the world——The port of La Plata——The port of Rosario;
            increase of its traffic; construction of the new harbour
            conceded to a French company——Bahia Blanca; its development——
            The decentralisation of traffic.

  II. RAILWAYS                                                      91

        Rapid development of the railway system——Tabulation of its
            extension in each Province——Table showing the general results
            of its operation——List of the lines actually running.

        List of railway companies, with the length of their roadways and
            their returns——The difficulty of obtaining these figures
            exactly——The tariffs of the railway companies——Form of
            concessions, and suppression of guarantees.

        Comparison of the railway system of the Argentine with the
            railway systems of other countries——Proportion of mileage to
            area and population.

        Extension of the system in the near future, owing to the numerous
            concessions granted——The mileage of these concessions——
            Insufficiency of plans and previous examination——Examination
            of the most important concessions for which the capital is
            already guaranteed——The dimensions which the railway system
            will attain after the concessions are realised——Programme of
            narrow-gauge construction; its value.

        Meeting of the Argentine with the Chilian railways across the
            range of the Andes——The aerial mining railway in the Province
            of La Rioja.

        Railways in relation to agricultural development——Insufficiency
            of transport at the moment of harvest; its causes and
            remedies——Necessity of a better organisation which shall
            respond to the stress of production.

  III. IMMIGRATION AND COLONISATION                                113

        Immigration is a vital problem for the Argentine——Table of the
            population per Province and per Territory. Its sparsity——
            The exceptional situation of the Argentine as the objective
            of European emigration——The poor results hitherto obtained
            through default of colonisation——The faulty division of
            the public lands——History of immigration in relation to
            colonisation——The nationality of immigrants.

                                PART II.


  I. AGRICULTURE                                                   125

            principal agricultural districts——The northern, central, and
            southern districts——The division of crops and their varieties.

        The constitution of rural property——The division of property——The
            great estates, called “estancias,” and their size.

        The drawbacks of large properties——The necessity of a better
            subdivision of the public lands——The division into lots of
            large tracts of land, in order to encourage colonisation——The
            system of exploiting property.

        AGRICULTURAL PRODUCTION——The progress realised in last seventeen
            years——Comparative yield of the chief products, wheat, flax,
            and maize——Lucerne; the importance of the crop and the
            excellent results obtained.

        Increase of the area under seed——The total area cultivated in the
            agricultural years 1908-1909——The great agricultural belts.

        The Province of Buenos Ayres, its agricultural development and
            its crops——The Province of Santa Fé——The Province of Córdoba——
            The Territory of the Central Pampa.

        Agricultural machinery, its importation from abroad, and
            especially from the United States.

        THE AGRICULTURAL YIELD——The yield of the soil in the different
            Provinces——Exceptional results in certain districts——Detailed
            calculation of the yield of a wheat farm——Two instances of
            great wealth realised by immigrants to the Argentine.

  COUNTRIES                                                        154

        The world’s wheat-harvest——Comparison between the statistics of
            consumption——The conditions of production in Russia and in
            the Argentine——Comparison with the United States, India and
            Canada——The prospects of the Argentine export trade in wheat.

  III. STOCK-RAISING                                               162

        The transformation of the old “estancia”——The principal
            stock-raising establishments; description, extent, number of
            heads of cattle and favourite breeds——The great “estancias”
            of the South and Patagonia.

        Approximate area of the soil devoted to cattle and sheep; general
            estimate of the numbers of cattle and sheep——Results of
            the census of 1908.——The capital represented by Argentine

  IV. THE VALUE OF THE SOIL                                        174

        Difficulties in estimating this value——Principal factors of
            valuation——Examples taken from lucerne fields and the forests
            of quebracho——Despite adverse circumstances, and with a few
            exceptions, there has always been a tendency for the price of
            land to rise——Alienation of lands acquired by conquest from
            the Indians; their enormous present value——The rise of value
            dates from 1902, and has hitherto continued without relapse——
            The causes of this rise, and its rational principles,
            according to an authoritative opinion.

        Examples of valuation drawn from the sales of public lands——The
            rise of prices in the Provinces of Buenos Ayres, Córdoba,
            Santa Fé, and the Pampa, with figures indicating the prices
            realised in some large recent transactions.

  V. AGRICULTURAL INDUSTRIES                                       187

        SUGAR-CANE——Area of plantations——Statistics of production——
            Legislation affecting sugar——Consumption.

        VINES——Area of vineyards planted——Production, consumption——
            Imperfect quality——Competition of foreign imports.

        TOBACCO——Area of plantations——Value of the product——Defective

        THE MULBERRY——The culture of the silk-worm might be established
            in the Argentine, but at present exists only in an
            experimental condition.

        MATÉ——Large consumption of this product.——Statistics of foreign
            importation——Districts suitable for its growth.

        COTTON——Physical conditions proper to its growth——The first
            favourable results in the Argentine——Its introduction into
            Chaco——Lack of manual labour for the development of this

        RUBBER——Existence of rubber plants in the Argentine——An
            unexploited source of wealth.

        ARBORICULTURE——On account of the diversity of the climate, all
            fruit-trees can be grown in the Argentine——The various
            fruits cultivated in different regions——Amelioration of the
            products. The trade in fruit——Its development possible on
            account of the inversion of seasons as compared with Europe——
            Refrigeration applied to the transport of fruit——Regions
            particularly suitable for fruit-growing.

                               PART III.

                             POINT OF VIEW.

  I. FOREIGN TRADE                                                 211

        The important part played by the foreign trade of the Argentine——
            Table of imports and exports during recent years——Explanation
            of their respective movements——Favourable condition of the
            commercial balance.

        Method of ascertaining the statistics of exports and imports——
            Errors in evaluation——Notes on the import duties on various
            articles——Variations of the custom duties——Export duties;
            their transitory characters——The trade in bullion.

        IMPORTS.——Their classification according to their countries of
            origin——Value of imports from each country, with indications
            of the principal articles imported——The Argentine dependent
            upon other countries for a large number of manufactured
            articles——Concentration of imports at Buenos Ayres.

        EXPORTS.——Their classification according to origin——Value of
            exports from each district, with indications of the chief
            articles exported——Decadence of the French trade with the
            Argentine and its causes.

        Tabulation, according to importance of the principal products
            exported by the Argentine——Remarkable increase in
            agricultural and pastoral exports——Search for new outlets.

        Eventual denunciation of commercial treaties——Projected new
            treaty with France——Causes of the superiority of English,
            German, and North American trade in the Argentine over French

        “Dumping” in the Argentine——A new client for the Argentine——
            Japan——Elements which make for the development of commercial
            activity in the Argentine.

        The commercial balance——Results of the commercial balance——Its
            prime importance in respect of the prosperity of the country——
            It is this balance which compensates the issue of capital for
            the benefit of the foreign debt.

  II. THE GREAT ARGENTINE INDUSTRIES                               235

        The principal industries of the country are related to
            agriculture and cattle-breeding.

        SUGAR-PLANTING, BOILING, etc.——Capital engaged——Tucuman the chief
            centre——Production and exportation——The sugar crisis——The
            Rosario Refinery.

        FLOUR EXPORT TRADE——Capital invested——Equipment, steam
            flour-mills, grain-elevators——Production and exportation.

        REFRIGERATION.——At present the chief industry of the country——
            Number of establishments——Table of exports of frozen and
            chilled meats——Capital invested——Development of the industry.

        DAIRY INDUSTRIES.——The large establishments devoting themselves
            to these industries——Butter; cheese——Exports of butter; the
            development of which the dairy industries are capable.

        BREWERIES.——Chief establishments——Production and consumption of
            beer during the years 1902-1907——Suppression of imports of
            foreign beer.

        SPIRITS——Decreased production of spirits.

        LOOMS, TANNERIES.——Weaving and tanning are industries which
            at present exist in the Argentine only in a rudimentary
            condition, despite the conditions which are favourable to
            their development.

        QUEBRACHO WOOD.——The centre of production——Applications——
            Companies engaged in the industry——Their results——Value of
            the products and the large profits to be expected.

        TIMBER TRADE.——Varieties of timber and hard woods.

        FISHERIES.——First results of this industry.


        The Argentine has not entered the industrial age——She has no
            coal-mines in operation, no natural motive forces of any

        MINES.——Symptoms of the awakening of the mining industry——
            Numerous lodes in the Andes——The mines of La Rioja and
            Catamarca——Mines in other provinces and territories——Mining

        ELECTRIC INDUSTRIES.——Tramways; their development, their
            perfected equipment, and their profits——Progress of electric

        VARIOUS INDUSTRIES.——List of various industries established in
            Buenos Ayres, according to the last census, with the value of
            their products.

        Comparison between the statistics of 1895 and those of 1904——
            Progress realised in 1908——Workshops and factories.

  LIMITED COMPANIES                                                261

        BANKS——International character of Argentine banking——Evolution
            of banking machinery——List of the principal banks, with
            amount of capital and business done——Conditions peculiar to
            Argentine banking; the lack of movable reserves——Rates of
            interest on account, on deposit, and on advances——Statistics
            of the deposit accounts of the principal banks——Exchange
            operations: their decrease since the determination of a fixed
            monetary ratio——The Clearing House; the importance of its

        _The Bank of the Nation._——Its history——The formation of its
            capital——Political interference in the nomination of its
            Directors——Statistics of its accounts——Rapid increase of
            deposits——Difficulty of realising capital——The resumption of

        _The Bank of the Province of Buenos Ayres_——Its reorganisation——
            Its present prosperity.

        _Mortgage and Loan-Banks._——History of the _Banque Hypothécaire_
            of the Province of Buenos Ayres——Bankruptcy——Arrangement
            between the bank and its creditors——Proposal of
            reorganisation——Laws relating to mortgage in the Argentine——
            The National Mortgage Bank; statistics of business done——
            Joint-stock loan companies; their capital and amount of
            business done.

        THE STOCK EXCHANGE (BOURSE).——History of this institution——
            Its importance; its functions; amount of business done——
            The decrease in its transactions since the cessation of
            speculation in currency or the monetary ratio.

        The Bourse is a private establishment——Its membership and its
            regulations——Statistics of business done during the last
            ten years——Securities quoted on the Buenos Ayres
            Bourse—— Decrease in the total amount of business done during
            the last five years——The monetary reform of 1901 as a factory
            of this decrease——The place occupied by the Stock Exchange in
            the life of the nation.

        _Joint-Stock Companies._——The development of joint-stock
            companies——Legislation affecting such companies——Abuses
            committed in the formation of such companies, due to
            speculation——Statistics of capital invested in joint-stock
            companies before and after the speculative crises of 1890——
            Revival of such companies, in a sense more consistent with
            the development of the country.

                                PART IV.

                           ARGENTINE FINANCE.

  I. THE ARGENTINE BUDGET                                          295

        The financial situation——Continual increase of national
            expenditure——Great and rapid progress since 1891——
            Insufficiency of the means adopted to moderate this increase——
            The Budget Extraordinary and the Special Legislation Budget.

        Causes of this increase of national expenditure——The increase
            of administrative requirements caused by an increasing
            population; this is the most natural cause, and that
            most easily justified——Increase of the public debt——The
            intervention of the State as the promoter or guarantor of
            important public undertakings——Exaggerated military expenses.

        The total sum of national, provincial, and municipal expenses.
            The proportion per inhabitant——Comparison with other foreign
            countries in the matter of administrative expenses.

        The national revenue——The revenue as organised by the
            Constitution, and its analysis——Indirect taxation——The
            customs the chief source of revenue——Direct taxation; its
            origin in the Argentine; its justification; its yield——
            Revenue of the industrial undertakings belonging to
            the State: railways, sewers, posts and telegraphs——The
            exploitation of the State lands.

        Elasticity of the receipts, which follow the development and
            progress of the country——The accelerated increase of
            expenditure, and the resulting chronic deficit——Necessity of
            serious reforms.

  II. THE PUBLIC DEBT                                              312

        Statistics of the public debt on the 1st January 1909——History of
            the public debt——The first loans.

        The financial crisis——Consolidated loans——The Romero arrangement——
            Loan for the redemption of guarantees——The internal public
            debt——The total of the Argentine public debt, and its annual
            cost in dividends and redemption——The proportion of financial
            charges as compared to other budgetary expenses.

        The burden of the public debt is heavy, but not unduly heavy
            in relation to the productive power of the country——The
            necessity of restraining further issues and of converting old
            debts——The efforts of the Argentine to improve her credit.

  III. THE DOUBLE CURRENCY                                         330

        The persistence of the double currency——The history of paper
            money——The origins of the premium on gold, and its almost
            continual increase——The year 1890 and the depreciation of
            the currency——The causes of this depreciation; abuses in the
            issue of paper, caused by a bad financial and administrative

        Remedies suggested——Rosa’s law fixing the value of paper money
            and establishing a _Caisse de Conversion_——Opposition
            to this law——Its beneficent effect upon agriculture and
            stock-raising, which had especial need of a stable medium
            of exchange——Reserve fund created with a view to converting
            paper money; its vicissitudes in the past and its present
            constitution——The present monetary situation.

  IV. THE _CAISSE DE CONVERSION_                                   342

        The principles on which the establishment of this institution
            is based——The necessity of a rapid redemption of fiduciary
            money——The doubtful success of this programme——New issues of
            notes——New attributes of the _Caisse_ dating from 1899——The
            exchange of paper for gold and _vice versa_——The development
            of this system of exchange——The authority attaching to the

  TO THE INVENTORY OF SECURITIES                                   349

            represented by movable properties, stocks, bonds, shares,
            etc., is the only kind of capital which lends itself
            to statistics——The great groups of movable properties:
            National Funds, Railway Shares, Insurance Companies, Foreign
            Banks, Mortgage Companies, and agricultural and industrial

        The nominal amount of capital represented by movable values——
            Table of the annual revenues of the same, and the sinking
            fund——Division of this revenue among the different countries
            having capital invested in the Argentine.

        English capital——The importance of English investments in all
            branches of Argentine activity——The benefits of a reaction in
            favour of Argentine capital——French capital; its small value
            compared to English capital——German capital and its rapid
            increase——Approximate valuation of that portion of revenue
            remaining in the Argentine, and of that which goes to the
            various nations having capital invested in the country.

        THE BALANCE-SHEET——The assets are principally composed of
            exportation values; the liabilities, by the value of imports——
            The revenue of investments exported to foreign countries,
            and the total of the sums expended by the Argentines abroad——
            Table giving a summarised Balance-sheet and the balance
            in favour of the Argentine——International exchanges and
            the importation of gold confirm this favourable situation——
            Argentine capital will presently play a more important part
            in the country as compared with foreign capital.

  CONCLUSIONS                                                      370

  INDEX                                                            373

                             AUTHOR’S NOTE

At the outset of this work our thanks are due to Señor J. Romero,
ex-Minister of Finance, who has given us the benefit of his experience
for this study of current Argentine affairs. Señor Romero is the author
of the monetary law of 1881, and was responsible for the arrangement of
the foreign Debt of 1892; he is to be numbered among those Ministers
who have rendered, in the course of their financial administration, the
greatest services to their country.

We must also pay tribute to the memory of two eminent gentlemen, no
longer living, whose death the Argentine deplores; who had desired, by
aiding us with their advice, to be in some sort collaborators in this
work, destined as it is to make popularly known to European readers the
present prosperity of the Argentine Republic.

We must express our utmost gratitude first of all to Signor Pellegrini,
that eminent man who assumed the Presidency of the Republic in a
difficult moment of her history. We are greatly honoured in that we
are able to associate his name with this book, by publishing, as an
Introduction, a most interesting study of the formation of the Argentine
Republic, which was one of the last writings of this eminent citizen.

And we must not forget the friendly and conscientious assistance rendered
us so willingly by one of the most notable figures in the financial world
of the Republic: M. Ernest Tornquist, whose death was also most truly a
national bereavement. M. Tornquist exercised a considerable influence
over the trend of affairs, and he most notably contributed to the work of
economic expansion, and financial and monetary reorganisation, of which
the Argentine is to-day feeling the beneficial effects. We have profited,
in writing this book, by his incontestable competence, and respectfully
salute the memory of this willing friend and collaborator.

                     AUTHOR’S PREFACE TO THE THIRD

Three years have elapsed since the appearance of the first edition of
this book, and we have to-day the satisfaction of being able to state
that the development of the country has fully responded to our optimistic
forecast. Short as such a period is in the life of a people, it has been
extraordinarily full; the ground covered is so considerable that it is
of a larger Argentine that we now have to revise the picture, while
recording its pacific victories in the economic field.

No country in the world has ever in so short a time realised so rapid a
progress, in respect of the produce of the soil. In 1904-1905 the area
under culture was as yet no more than 22-1/2 millions of acres, while
to-day, in the agricultural year of 1908-9, it attains the figure of 35
millions of acres, representing an increase of nearly 75 per cent. In the
same period the value of cereals, which was about £1,600,000 in 1904-5,
has also increased in very large proportion.

Taking as basis the figures furnished by the Division of Rural Economy
and Statistics of the Ministry of Agriculture, we may estimate that the
harvest of 1908-9 will give a yield of, 13,811,000 (metric) tons,[1]
which may be divided as follows: Wheat 5,760,000 tons, flax 1,228,000,
oats 823,000, and maize 6,000,000 tons. The value of the harvest,
according to the prices ruling in 1908, will amount to 1045 millions of
paper piastres, or £92,000,000.

[Footnote 1: Reducing the above quantities to bushels of 56 lbs. weight,
the cereal harvest is estimated at: wheat, 230,000,000 bushels; oats,
33,000,000; maize, 240,000,000. The metric ton is 34·5 lbs. lighter than
the English.]

To appreciate these figures at their true value, one must remember that
twenty-five years ago the Argentine was still importing foreign flour to
make her bread, while to-day the production of grain represents nearly a
ton per head per inhabitant.

It is the same with maize: twenty years ago it was hardly grown, and
to-day the harvest amounts to 6 millions of tons; furnished almost
entirely by two provinces——those of Buenos Ayres and Santa Fé.

As for stock-raising, we cannot make a comparison with any very recent
statistics——since the last available date back to 1895——but we may
say that the general census which has just been undertaken, under
the direction of Señor Alberto B. Martinez, has revealed a wealth
whose magnitude surpasses all conception. To-day the Argentine counts
29,116,625 horned cattle, 67,211,754 sheep, 7,531,376 horses, 750,125
mules and asses, and 3,945,086 goats; which is equivalent, at the present
time, to a capital of 1481 millions of paper piastres, or £130,000,000.
By referring to the figures for 1895, which give us 21,701,526 horned
cattle and 4,446,859 horses, we may judge of the immense progress which
the Argentine has realised in a few years, thanks to the transformation
of 3-3/4 millions of acres of soil into magnificent pastures of lucerne.

On the other hand we must, it is true, note a decrease of 7,167,808
head of sheep, which are gradually falling back before the advance of
agriculture and the increasing numbers of cattle. This harmless animal
contents itself with a poorer soil, and does not fear the intemperance
of the seasons; also sheep-raising is now giving place, in our central
provinces, to other more remunerative industries, and the sheep are
taking refuge in great quantities in the southern regions.[2]

[Footnote 2: Patagonia, and even Tierra del Fuego, with its terrible
winds and drenching rain, is now being occupied by the sheep-rancher, to
the destruction of the guanaco and the natives; frost being rare save on
the ranges, and the pasture luxurious.——[TRANS.]]

If we consider these facts with a view to noting the precise direction
in which the Argentine is to-day evolving, we shall observe a marked
tendency towards the extension of agriculture proper, and a check in the
progress of stock-raising, which appears——at least for the moment——to be
developing more slowly than of old.

This characteristic change is perceptible each year in the statistics
of foreign trade. The exportation of agricultural products amounted,
for the year 1907, to the value of 164 millions of piastres (gold), or
£32,800,000 as against £32,400,000 and £34,000,000 for the two preceding
years. As for the products of stock-raising, the value in 1907 amounted
only to £24,800,000, while in the two preceding years it was £24,800,000
and £28,200,000; and ten years ago it exceeded by more than £10,000,000
the value of the agricultural exports.

Many causes are contributing to this transformation of a pastoral into
an agricultural country; their action is progressive, and they are
profoundly modifying the aspect of the land, by gradually substituting,
for the monotonous horizons of the ranchero’s prairies, the variety of
cultured fields.

While the prices of cereals have always attained a remunerative figure,
those of the bestial, on the contrary, have now and then suffered
sensible depression; and, what is still more serious, the ranching
industries have also suffered, as they did in 1908, by a lack of demand
for hides and wool, and simultaneously for an insufficient outlet for

The dried-meat (saladeros) industry, which used to absorb annually
nearly two million beasts, has by now been almost entirely removed in
the direction of Uruguay, or the Brazilian province of Rio Grande do
Sul, and is little more than a memory; as this primitive and rudimentary
method of preparation had perforce to give way before the more hygienic
and progressive chilled and frozen meat trade. The chilled beef industry,
however, upon which such hopes were founded, has not of late years made
any conquest of new markets, England being almost the Republic’s only

As for the exportation of cattle on the hoof, it is greatly impeded in
Europe by prohibitive measures, which diplomacy, by means of commercial
treaties, is endeavouring to remove. Yet were the desired advantages
obtained, the result would be doubtful on account of the considerable
rise in the price of cattle and the high freights which are charged for
the transport of living stock. It therefore results that this particular
species of exploitation is at an obvious disadvantage in the face of the
refrigerating trade.

If the raising of stock and its dependent industries have not, in these
last few years, realised a progress comparable to that of agriculture, we
must by no means conclude that this department of production has ceased
to be an element of national prosperity. Quite on the contrary: thanks to
the efforts made to better affairs by happy selections in the breed of
animals, the value of live stock has increased in surprising proportions,
and the Argentine still retains its rank as second to the United States
as a stock-raising country.

What we have endeavoured to emphasise, as a new manifestation of the
national activity during the last few years, is that the development
of the country has been in especial along agricultural lines; an
incontestable proof of progress, and an index of a higher degree of

Agriculture, as compared to stock-raising, is, from the economical point
of view, a source of wealth having quite a different bearing upon the
general prosperity and welfare of a nation. It is the fairy which little
by little transforms the vast plains of the Argentine pampas into a more
animated landscape, peopled by numerous homesteads, foci of colonisation,
which then develop into villages, which in a score of years may perhaps
be important cities. Agriculture summons the railroad, stimulates
emigration, promotes the division of the soil, creates the small
proprietor; it influences even the manners and morals of the inhabitants,
for it demands more labour, more intelligence than ranching; nimbler
wits, more method, greater foresight.

The comparison between the two great industries of the Argentine is
summed up in the following fact: a property comprising 25,000 acres of
pasture can be put into working order and managed by a staff of ten to
twelve men. For an estate of 1500 acres under culture, one may estimate
that forty to fifty persons, grouped in families, may easily live upon
the soil and prosper. We may perceive by this the great superiority
of agriculture from the point of view of the general interest of the
country. It demands and supports a denser population; it permits the
grouping of this population in villages and cities, it creates, in
proportion, with a smaller capital, a great wealth of produce; in short,
it contributes on the one hand towards increasing the wealth of the
country by participating largely in its exports, and on the other it
increases its power of consumption, by absorbing a greater number of
imported products.

Thus the evolution of the Argentine towards agriculture constitutes a
real progress, and if the country continues to follow the same path,
its development will assuredly not be arrested by lack of soil. The
35 to 37 millions of acres already reclaimed, and at present under
culture, represent at the most a tenth of the total area of cultivable
land, which is estimated roughly at 375 millions of acres, of which at
least 125 millions are perfectly adapted to the culture of cereals. The
four Provinces of Buenos Ayres, Santa Fé, Córdoba, Entre Rios, and the
Territory of Pampa Central alone contain some 32-1/2 millions of land
under the plough, while there remains about 170 millions of acres of land
which is just as fertile, and which without manuring or preparation would
yield a splendid crop from the first year of tilth.

This transformation into an agricultural country has already borne
fruit. The figures relating to external commerce, compared with the
world’s statistics of cereal production, show the present position of the
Argentine among the great exporting nations.

It is the Argentine which to-day, after the United States, occupies the
second rank in the matter of cereal exports; and this is a significant
event in the economic history of the nations, to which the attention of
Europe should be directed. At the present moment the Argentine, with
her 4 million tons of corn available for exportation, is not as yet
mistress of the grain markets, but she represents, to those countries
whose production is insufficient, a notable reserve, which has become
indispensable since the United States, Canada, and Russia seem to have
reached their limit of exportation.

The year 1907-8 was for the Argentine, thanks to the results of a good
harvest, a period of exceptional prosperity. The average yield of wheat
was 18·7 cwt. per hectare——14 bushels per acre——and in the Province of
Buenos Ayres it amounted to over a ton per hectare——or 15 bushels per
acre——although the average was only 11 per acre in 1906-1907, and 13 in

As for the prices, they ruled higher than any the country had so far
known, even during its most prosperous periods. Wheat had been selling at
6 or 7 piastres the 100 kilos——that is, approximately, at 3s. to 3s. 6d.
per bushel——and at that price agriculture still yielded a fair profit. In
1908, as a result of the bad harvests in several European countries, the
sales rose to 6s.; at which price the profits on the cost of production
amounted to 25% or 30%.

After this cursory glance at the present situation in the Argentine,
we must also express our views of the future. Optimism is certainly
permissible in the case of a country which has advanced so far in so
short a time, and where prosperity is founded on a diversity of products
which can never be affected by a universal crisis.

However, one well might wonder whether the Argentine might not, in the
Biblical phrase, know lean years following the fat; whether she is not
destined to suffer the onset of plagues, such as drought and the locust,
which latter is to her, as to Egypt in the time of the Israelites, a
veritable scourge. Certainly here we have one of the great risks to
which the country is exposed: a country wherein all depends upon the
harvest, the earth being the principal source of wealth, and the mother
of all industry. Yet this danger, so real a few years ago, is greatly
lessened to-day by the fact of the distribution of cultivated lands and
pastures over a far greater area. A bad harvest could not compromise both
agriculture and stock-raising over a stretch of more than 15° of latitude.

Yet the country is subject to a very real danger, but one of another
kind. From the very exuberance of development may arise a crisis of
growth; for her prosperity depends not only on plentiful harvests; it
may be influenced by other factors on which it is far more difficult to

The country must continue to require considerable sums of capital for
her agricultural necessities, for her stock-raising, for commerce, and
for industries; and it may be asked whether the European markets, from
which, in great measure, her capital derives, can continue to afford her
an ever-increasing amount of assistance which will keep pace with her
development in all directions.

The Argentine is not so far self-sufficing. The soil is, to be sure, a
source of immense national wealth, but this wealth is not in the form of
a reserve to be drawn on; it is, as a rule, converted into real estate
directly it is produced; unless, indeed, it goes abroad. For a farmer
who makes a profit, say, of £8000 or £10,000, will immediately employ
his capital to acquire another holding or to start a different kind of
culture, instead of clearing off the debts which already burden his
property. He is contented with his position as a borrower; for if money,
even on mortgage, costs him 8 to 9 per cent., he can, on the other hand,
obtain a far higher interest by sinking it in the purchase of land.

From all this it results that in the Argentine rural and even urban
property is largely hypothecated. It must be understood that this capital
is well guaranteed, as its security rests not upon pure speculations but
on the yield of the property, which is far in excess of the charges;
however, since the general tendency is not towards redemption, one may
wonder if, sooner or later, there may not be a lack of equilibrium
between the impulse given to the country and its financial needs. The
crisis which arose in the wool market in 1908, the drop in the prices of
quebracho timber, and the restricted outlet for cattle on the hoof, and
even for refrigerated meat,——all these partial misfortunes are salutary
warnings, and we must not lose sight of them, nor allow ourselves to be
hypnotised by the high prices of wheat, maize, or flax, or the heavy
yield of the lucerne pastures.

For our part, in considering the future of the Republic no less than
its present interests, we hope to see it enter upon a period of
consolidation, rather than continue indefinitely the discussion of
further progress. Before entering upon another stage of development the
country must, for a while, mark time, in order to gain leisure to assume
its own liabilities, rather than continue incessantly to absorb new

But there is still a cloud in the serene skies of the Republic; a cloud
that might be the precursor of a truly national catastrophe, if the
measures necessary to avert it were not taken in time. The peril arises
neither from the economic situation, which is excellent, denoting an
ever-increasing vitality, nor the relations of the Republic with the
neighbouring nations, which are conceived in a spirit of peace and
concord. Although a short-sighted diplomacy has attempted to envelop the
relations between the Argentine and Brazil in an atmosphere of jealous
distrust, there is no fundamental cause which might trouble the friendly
relations of these two countries, which formerly fought side by side on
the field of battle for the redemption of a sister nation. They have no
conflicting economic interests which might divide them, and are destined
to afford a great example of progress and of civilisation to the other
States of South America.

The peril to which we refer is of a totally different character: it
is caused exclusively by the exaggerated expenditure of the public
administrations, and the dangerous paths of armed peace upon which the
country has entered; thus implanting, in young and free America, a
ruinous system, which is ruining the nations of the Old World, burdens
them with insufferable taxes, and diverts from production and labour
too large a proportion of citizens. In order to face imaginary dangers,
Congress and the Government have lately decreed that a sum of £40,000,000
shall be expended upon armaments.

As for home politics, they form a domain which we do not desire to enter,
and on which the world of affairs bestows little enough attention, so
long as they do not compromise the public peace. The Argentine, in
fact, is still under a system of personal power; the Presidency of
the Republic is the focus about which all the political life of the
country gravitates. In default of a people as conscious of its rights
as of its duties, and possessed of the virtues necessary to a course of
perseverance in democratic practices, it is the Government that manages
the elections; and it is difficult to say whether it does so because
there is no public opinion, or whether there is no public opinion because
the Governments usurp the functions of the electorate. From this point of
view there has been no change in the political _morale_ of the country;
the only progress to be noted is that the parties resort less often than
they used to violence as a solution of their quarrels.

As for the administrative expenses, they are increasing with a rapidity
only equalled by the growth of the fiscal resources of this fortunate
country. Proposals for public works accumulate in the various Ministries,
while waiting for the funds necessary for their execution; their total
amounts to-day to the respectable figure of nearly £40,000,000.

To sum up: from our re-examination of the Argentine situation for 1909,
we obtain an impression of great progress and of actual prosperity,
an impression confirmed by the statistics of foreign trade, in which
the entire activity of the country is reflected. For the year 1907 the
total of imports and exports amounted to £116,000,000; for 1908 the
total receipts and outgoings represented £133,000,000: with a commercial
balance of nearly £24,000,000 in favour of exports.

Among the other manifestations of national progress we have still to take
into account the development of the network of railroads, of which 13,660
miles are in actual working, representing a capital of £158,000,000,
while 3259 miles are projected or in process of construction,
representing a capital of more than £25,000,000. These new lines have
been conceded by Congress either to companies already existing, or to
new companies which are able to offer all desirable guarantees, so as to
assure the prompt realisation of the schemes accepted. The Government,
on its own part, has solicited and obtained from Congress the necessary
sanction for the execution of a vast plan for the colonisation of the
Southern Territories, which is based on the construction of numerous
railroads. This continuous extension of the railway system has greatly
favoured the valorisation of the new Territories, and has contributed
powerfully to the movement of colonisation and emigration which is the
indispensable condition of a wider future.

To-day, then, all is for the best in the best, or at least the richest,
country in the world. But if science teaches us that Nature takes no
leaps——_natura non facit saltus_——history also teaches us that nations
in their progress must not progress too rapidly. For this reason the
Argentine Republic, in especial, has need to-day to consolidate her
prosperity under a _régime_ of foreign and domestic peace, of prudence
and economy, and to avoid speculation and the abuse of credit, which have
ended, before now, in inevitable reaction.

                      PREFACE TO THE FIRST EDITION

Twenty years ago M. F. Latzina, Director of Statistics, published in
French a very able work on the _Geographie de la République Argentine_,
of which he had issued the first edition in Spanish, and I consented with
pleasure to write an Introduction to a book whose object——an object which
it fulfilled——was to familiarise European readers with a country whose
rapid development is one of the most remarkable facts in the economic
history of the nineteenth century.

“These results,” I wrote, after having quoted certain statistics
of agriculture and commerce, “are assuredly very satisfactory. The
Argentines have the right to be proud of them; few countries in the world
could show a like example of progress!”

I have no less pleasure in associating myself to-day with this book,
by Señor Albert B. Martinez (sometime Under-Secretary of State, and at
present Director-General of the Statistical Department of the city of
Buenos Ayres), and M. Maurice Lewandowski, Sub-Director of the Comptoir
National d’Escompte of Paris. Their competence is incontestable, and
their work requires no recommendation, since it has won the sanction of
success, being now in its third French edition, and having been “crowned”
by the French Academy. But the object which is aimed at by _The Argentine
in the Nineteenth Century_ is the same as that of the _Geographie de la
République Argentine_, and the interest attaching to the book is the same.

“In the competition of the new nations, created by emigration from
Europe,” I said in 1890, “this Republic will be enjoying a privileged
situation, because of its particular advantages: the nature of its
climate——a climate of the temperate zone; the vast extent of its
territory; the quality of its soil; the facility with which railways
can be built; its situation on the Atlantic coast, facing Europe, and
relatively near the Indian Ocean; the powerful tide of emigration
setting in towards it, and the rapid peopling of the country, together
with the wealth that results therefrom; the suitable character of its
population, and the liberal spirit of its political institutions....

“The Argentine Republic, which occupies in the temperate zone of South
America a position analogous to that held by the United States in the
corresponding portion of North America, may well dream, if not of equal
power, at least of a similar future.”

This dream is in process of realisation: of this the proof will be found
in the chain of evidence which our authors put forward.

It is the present condition of affairs and, above all, the economic
situation, which the authors of _The Argentine in the Twentieth Century_
have set out to represent. They have not given us a panegyric——“_nihil
admirari_,” say they——but a practical book: one written by men of
business and affairs, founded upon direct observation, and hard-and-fast
figures, where statistics have provided them.

       *       *       *       *       *

The Argentine is a young nation, which hitherto has busied itself rather
in work and production for the amelioration of its present condition,
and in the preparation of its morrow by creating capital, than in giving
itself to the historical study of its past. Nevertheless, history is the
web from which the spirit of a nation is woven. It is useful to recall
the principal historical periods, and particularly the origins of the
nation, for the better understanding of the present period.

It was in 1508 that the Spaniard, Juan Diaz de Solis, discovered the
estuary of the Plata, the _Mar dulce_; and in 1516 he returned, thinking,
after the discovery of the South Sea, by Nuñez de Balboa in 1513, that
this might be the strait, so sought by the navigators of the time,
by which that sea might be reached, but on landing he was killed by
the arrows of the Charrua Indians. He had discovered no strait, but a
spot assuredly well suited for colonial settlement. The first attempts
were abortive: that of Sebastian Cabot, who built the fort of the
Sancti-Spiritu (1527), and that of Diego Garcia. It was then that the
discovery of some ornaments of silver, worn by the people of the country,
gave the river its name; known first as the Rio de Solis, it was now
called the Rio de la Plata. The Indians destroyed the fort and killed the

Eight years later a wealthy private gentleman, an officer of Charles V.,
Don Pedro de Mendoza, undertook to establish a settlement at his own
cost, on the condition of being appointed governor of all territories
that might be found as far as 200 leagues from the ocean; and in 1535
he sailed with fourteen vessels and two thousand men. He laid the first
foundations of the colony of Buenos Ayres, and he rebuilt the fort of
the Sancti-Spiritu, while his lieutenant, Ayolas, in 1536, founded the
station of Asuncion, on the Rio Paraguay. The post of Buenos Ayres
was abandoned. After the death of Mendoza and Ayolas the new colony
was governed by Martinez de Irala for a space of nearly twenty years;
reinforced by fresh emigrants, it barely held its own against the losses
inflicted upon it by the Indians. Irala, by a voyage of three years’
duration, succeeded in putting himself in touch with the Spaniards of

Conquerors coming from Chili across the Andes, the Spaniards founded
among others, despite the hostility of the Indians, the following
stations: Santiago del Estero (1552), Mendoza (1560), Tucuman (1565),
Cordoba (1573), Salta (1582), and Jujuy (1592). These at first were
little more than camps entrenched. But Santiago del Estero was erected
into a bishopric, and so remained until 1700, in which year the episcopal
throne was transferred to Córdoba. In the eastern regions, in 1573,
Governor Juan de Garay built Santa Fé, re-occupied Buenos Ayres, which
was christened, on the 11th of June 1580, Cuidad de la Trinidad y Puerto
de Santa Maria de Buenos Ayres (the City of the Trinity and the Haven of
Holy Mary of the Fair Winds), and founded Corrientès in 1588.

Trade commenced. A first consignment of hides and sugar was dispatched to
Spain in 1551; but the merchants of Seville protested, and as a result
their privileges won the day. It is a fact that the monstrous regulations
which Spain had imposed upon her colonies forced the Argentines, for
some considerable time to carry their exports across the continent to
Callao, whence they were carried by sea to Panama; there they were again
transported by land across the isthmus, and were shipped anew at Puerto
Bello for Seville. Imports came by the same road.

There were, however, exceptions to this rule: either by grace of
provisional permits given by the King of Spain, or, more frequently,
through the contraband trade.

In 1617 the Province of Paraguay and the shores of the Plata were divided
into three Provinces; Paraguay, Buenos Ayres (erected into a bishopric
in 1630), and Tucuman, which were dependents of the viceroyalty of Peru.
The captaincy of Chili also extended over both sides of the Andes. The
Indians had to a great extent been divided among the colonists _en
encomiendas_——that is to say, in a species of slavery; but other Indians,
who were still free, were formidable enemies.

Early in the seventeenth century the Jesuits instituted their first
“reductions” in Paraguay, and organised in a community the Guarano
Indians of the country. These “reductions,” ravaged by the Mamelukes
of Brazil, were replaced by missions established on either bank of the
Paraguay River, and on the Uruguay to the south of Yguassu. The order of
Jesuits was suppressed in 1766.

The principal towns of the Argentine of to-day were already established
by the middle of the eighteenth century. At that period, so Savary
informs us, “The city of Buenos Ayres contained about 4000 houses, all
built of earth (adobe), but covered with tiles, with the exception of
some fifty houses of brick. The inhabitants are rich, and owe their
riches to the extensive trade which they carry on, both at home and
abroad.” After the advent to the Spanish throne of the son-in-law of
Louis XIV., France had the greater share of this trade; the King having
conceded to a French company the monopoly of the Assiente——that is to
say, of the trade in negroes, until by the Treaty of Utrecht France was
forced to cede this monopoly to England.

The two principal articles of export were at that time green hides for
Europe and the Paraguayan _maté_ for Peru.

On the northern bank of the Plata the Portuguese had founded the Colonia
del Sacramento (1686), with a view to competing with the Spanish ports.
The Spaniards seized this place once in 1724 and again in 1766; they
founded Montevideo in 1726. The quarrel between the two colonies was only
terminated by the Treaty of Madrid in 1750.

In 1748 Spain somewhat abated the severity of her laws. In 1776 she freed
the Argentine from the overlordship of Peru, by creating the viceroyalty
of La Plata, with Buenos Ayres as capital. The population, which before
this change was only 37,000, rose to over 400,000 in a quarter of a
century. In 1780 was founded the colony of Carmen, the first Patagonian
settlement, the shores of Patagonia having been first explored by the
Jesuit Quiroga in 1746.

During the wars of the Empire the English seized Buenos Ayres by
surprise, but were expelled by a Frenchman, Jacques de Liniers, whom the
inhabitants had appointed viceroy.

The _colonial period_ ended in 1810.

Such were the origins of the Argentine; a time of difficulties and
impediments; but in that period were laid the foundations on which the
Argentine civilisation reposes.

The second period is that of the _formation of the Republican State_.

The first part of this period, that of the deliverance from Spain,
opens with the memorable day of the 25th of May 1810, when liberty
was peacefully proclaimed at Buenos Ayres. The revolution spread to
Córdoba and to Tucuman; it failed in Upper Peru, owing to the reverse of
Goyenèche in 1811, and in Paraguay, where the capitulation of Tacuary
took place in the same year. Belgrano, one of the heroes of the War
of Independence, renewed the offensive and once more invaded Upper
Peru——this time victoriously; but the Argentine troops were definitely
driven from the country after the battles of Vilcuapujio (1813), and
Sipé-Sipe (1816). On the east coast the capitulation of Montevideo in
1814 put an end to the Spanish domination. On the west the brilliant
expedition of General San Martin, who crossed the Andes, freed Chili, and
struck the decisive blow by the capture of Lima (1817-1821). The victory
of General Sucre at Ayacucho (1824) terminated the struggle. Argentine
territory had already been seven years free from the Spanish troops.

The second part of this period, that of political construction, was
longer, far more laborious, and still more bloody. Questions of race
and party divided the inhabitants. Guachos of the Pampa, Creoles[3] and
pure Spaniards, Federals and Unitarians, disputed the power, while on
the frontiers of the Republic the Indians continued to disturb and alarm
the new State. Provinces seceded; many constitutions were drafted. In
spite of his talent as a statesman, Rivadavia was unable to obtain the
universal acceptance of the Unionist Constitution of 24th December 1826.

[Footnote 3: This word is here used to denote mixed blood; in its proper
use it denotes a person of Latin blood born in tropical or semi-tropical

A war against Brazil, of which the notable fact was the victory of
Ituzaingo (1827), resulted in the recognition of Uruguay as a free state.

The civil war broke out anew several times. The military leader of the
Buenos Ayres Federals, General Rosas, seized upon the dictatorship in
a time of disorder, exercising it not without intelligence, but with a
cruel despotism, and he carried on a long war against Montevideo, which
lasted until General Urquiza, of the Union party (with Brazil and Uruguay
as allies) delivered his country by the victory of Caseros (1852). The
Constitution of the Argentine Republic was voted on 25th May 1853; but
the end of the civil war and the definite reunion of Buenos Ayres to the
other Provinces did not take place until 1860, the year of the revision
of the Constitution.

War and confusion are not usually propitious to progress. However, the
population in 1861 was estimated approximately at 1,375,000; it had
increased to almost five times what it was at the beginning of the

Buenos Ayres became definitely the capital of the Republic in 1882, upon
ceasing to be the capital of the State of Buenos Ayres.

The third period is that of _economic development_. This is the period
of which our authors write. We may mention it as beginning with the
re-entrance of Buenos Ayres into the Argentine Concert, and the revision
of the Constitution of October 1860. If it has not been free from
political agitations and international misunderstandings, it has none
the less been more pacific than the preceding periods, and industry has
enjoyed a security which in former years was only too often disturbed by
the regulations of colonial trade, the attacks of the Indians, the civil
wars, and the Separatist policy. But there were still for twelve years
intestine troubles and dissensions.

It was only in 1882 that the political organisation was completely
constituted, when Buenos Ayres became the Federal capital; for from 1865
to 1870 the Argentine was forced to wage war against Paraguay, when
it struggled, in concert with Brazil, against the despotism of Lopez.
The Treaty of the 3rd of February 1876 gave it the greater Chaco as
far as Pilcomayo. The Chaco is pacified; matters are not the same now
as when, in 1881, Crevaux was assassinated there by the Tobas. General
Riva effected the Argentine conquest of Patagonia (1879-1880), and the
Indians, feared so long by the planters, were driven across the Andes.

In 1895 the difference which had arisen between the Argentine and Brazil,
with reference to the Misionès frontier, was settled by arbitration. By
the Treaty of 23rd July 1881 was terminated a long quarrel with Chili in
relation to Patagonia; the Argentine obtained possession of the country
as far as the line made by the Cordilleras and a portion of Tierra del
Fuego. Arbitration also, in November 1902, settled the difference with
Chili, no less irritating and of equally long standing, concerning, the
frontiers of the Andes. No more serious causes of quarrel between the
Argentine and its neighbours remain.

       *       *       *       *       *

The period of _economic development_ is as yet of only fifty years’
duration: it is far from having reached the limit of its evolution; but
we may judge of the amplitude which that evolution has already attained
by means of statistics,[4] and by them we may foretell what the future
holds in promise.

[Footnote 4: The more recent figures cited in this Preface are taken, for
the most part, from _The Statesman’s Year-Book_.]

The population, estimated in 1861 as being 1,375,000, had by 1907
increased to 6,210,000. Immigration, varying from one period to another
according to the economic condition of the European nations and the
Argentine Republic, reached an annual average of 13,400 from 1860 to
1869: between 1903 and 1908 it amounted to 211,000 (emigration not being

[Footnote 5: This emigration amounted to an animal average of 93,000
between 1903-1907; but the deduction was not made in the years 1860-1869.
In 1907 there were 209,000 immigrants and 90,000 emigrants.]

The area cultivated in 1895, the date of the first serious estimate, was
5,256,160 acres, of which 2,013,000 acres were under wheat;[6] in 1909
34·6 million acres were cultivated, of which 14·8 millions were in wheat.
These 34·6 millions are only a small fraction of the 256 million acres
which the Argentine appears to contain.

[Footnote 6: The cultivated area was estimated at 849,000 acres in 1872.]

The grain harvest, estimated in 1878-1881 at barely 400,000 tons,
exceeded a million tons in 1895, and in 1907-1908 amounted to 5,523,900
tons, or 204,384,000 bushels.

Although the bovine and ovine races have not greatly increased in numbers
for the last twenty years, on account of the transformations effected by
agriculture,[7] the exportation of wool, which was 660,000 quintals in
1869-1870, was nearly 2,000,000 in 1905, and it still amounted to 1-1/2
millions in 1907; the exportation of beef, reckoned in carcasses, was
more than 60,000 head in 1900 and 463,000 in 1907.

[Footnote 7: In 1875 an approximate estimate gave 13-1/2 millions of
horned cattle and 57-1/2 millions of sheep; in 1907 the figures amounted
to 25,844,000 and 77,580,000.]

The first section of railroad was constructed in 1857. In 1865 the
Republic possessed only 154 miles of railroad; in 1908 there were 14,643

In 1865, the first year of which we have commercial statistics, the
foreign trade amounted to £11,300,000; in 1907, it reached £113,000,000,
and in 1908 £127,600,000. For several years there has been a very large
excess of exports over imports; in 1908 it would seem to have exceeded

These figures, to which our authors have added many others, are eloquent.
They tell us that man, whose labour creates wealth, is four and a half
times more numerous upon Argentine soil than he was forty-six years
ago; that immigration each year increases the number of workers; that
cultivated soil, the chief instrument of wealth in an agricultural
country, has an area nearly seven times greater than that of fourteen
years ago; that wheat, the principal vegetable product of that soil,
now yields harvests thirteen times more abundant than those of thirty
years ago; that the products of stock-raising have, on the whole,
greatly increased, despite the arrested development of certain forms of
production; that the railways——the means of transport of man and his
produce, which did not exist half a century since——now cover the land
with a network of increasing fineness, and are placing the Argentine in
the first rank of the nations in respect of the mileage of railroad per
inhabitant; that foreign trade, which is one of the most characteristic
forms of popular activity, and that commonly mentioned in illustrating a
state’s power of expansion, has multiplied itself ten times since 1865.

These figures, taken together, form a picture which is not only
encouraging, but extremely flattering to the pride of the Argentine

But the picture is not without shadows. The Indians to-day amount only
to thirty thousand in numbers; the Guachos are gradually disappearing
before the agricultural settler; and the political and moral unity of the
country is not yet fully accomplished. The Argentine, like most of the
Latin-American republics, has given itself a Constitution based upon that
of the United States; but the populations of its Provinces had not the
spiritual cohesion exhibited by the British Colonies, and above all by
New England, which qualities set the seal on religious faith and the love
of liberty. European immigration has brought us composite elements which
are not yet amalgamated. Nearly all immigrants have come to make money:
the majority are indifferent to public affairs, as we see on election
days. Others are only too inclined to attach themselves to coteries, to
cliques. In the relations between the local governments and the central
Government, the subordination of the former is more remarkable than the
harmony of their mutual relations. The planters, intoxicated by their
good fortune, are not always so prudent as to regulate their undertakings
by their resources.

When in 1890 I wrote an Introduction to M. Latzina’s book, the Argentine
was in the full swing of speculation, and apparently saw no limits to
its development. “The Argentines,” I said, “resemble an enterprising
merchant, who, having opened shop in a well-frequented street, and having
borrowed money in order to start with a luxurious establishment, finds
himself greatly embarrassed for years, although his business prospers,
because his advances and his engagements are larger than his takings.
It is desirable that this spirit of enterprise should be fed, so to
speak, on diet, or at least, according to regimen; and on such conditions
equilibrium would be re-established.” Indeed, it then seemed that a
crisis must occur; and it came, a few months later. It was very long and
very severe; the Argentine learned what it meant to lose its credit, and
for twelve years it suffered the disadvantages of a depreciated paper

The country recovered, and speculation rapidly received fresh impetus.
Thanks to the excess of exports, gold became plentiful; it is no longer
at a premium; if interest——which has decreased——still maintains itself at
about 6 per cent., it is because there is a great demand for capital. The
budgets still increase at a pace to alarm a prudent financier, in spite
of increased receipts. “If the Argentine does not wish to compromise its
lofty destinies,” say the authors of the present volume, “it is essential
that it should maintain an economical administration, careful of the
public moneys, yet open to all material progress. By so doing, it will
inspire confidence in men and in capital: the two elements which it must
still increase in order to become a great nation.”

       *       *       *       *       *

To the population born on Argentine soil were added, between 1857 and
1908, 3,338,000 immigrants of various nationality;[8] 1,706,000 Italians,
670,000 Spaniards, 201,000 French and Belgians, 100,000 Austro-Hungarians
or Germans, and 41,000 English. Thus the Latin races are greatly in the
ascendant: a fact which facilitates assimilation.

[Footnote 8: On the other hand, 1,322,000 persons emigrated. The census
of 1895 gave 886,000 foreigners not naturalised, of whom 493,000 were
Italians, 199,000 Spaniards, 94,000 French, etc. To-day immigration
consists especially of Italians (127,578 in 1906), Spaniards (79,287),
Russians (17,434), Syrians (7677), Austrians (4277), French (3698), etc.]

The Government should preoccupy itself largely with this matter of
assimilation: for the process is not complete. There are two effectual
means which it might employ, among others, in order to assimilate its new
recruits: ownership of the soil and education.

These two means have produced marvellous effects in the United States.
The Homestead Law of the 20th of May 1862 gave to every American over
twenty-one years of age, and to every person having declared, conformably
with the law, his intention of becoming a citizen, the right to occupy
gratuitously 160 acres of surveyed lands, or 80 acres only in districts
more advantageously situated: if the holder, after five years of
residence, has cultivated a portion of his holding, the full title is
finally granted. For such purpose the public lands have been surveyed and
divided into lots by the Government. The Government also sells public
lands by auction or treaty. Up to the month of July 1905, it had thus
alienated a total of 808,000,000 acres; which explains how millions of
families——Irish, German, Scandinavian and others——have been more or less
definitely settled on the soil of that which was already or which has
since then become their native land. Here is an example the Argentine
Government would do well to follow.

Education exercises an influence of another kind, which is no less
efficacious. The Americans of the United States are well aware of this,
and this is why they attach such importance to the upkeep of the “common
schools” and the attendance of the pupils. The children of foreign
parents become Americanised in class and during play by contact with
young Americans. The English tongue becomes their own language; their
manners of thought and their habits are modelled on those of their
comrades, whom they are unconsciously proud to imitate. If the immigrant
family does not forget the memories of its old home, at least its
offspring, from the second generation, are rooted in the American soil
and have American minds.

The Argentine Government must endeavour to obtain a like result. For a
long period primary instruction was in an extremely neglected state in
the Argentine Republic. However, the Constitution obliged the Provinces
to secure such instruction, the Federal Government to assist by finding
a third of the expense of the first installation of the schools. But in
spite of the Constitution, in 1874 there were only 1830 primary schools
and 112,000 pupils. Progress has been accomplished: in 1905 there were
5250 schools, 14,118 teachers, male and female, and 544,000 pupils. But
as the population between the ages of six and fourteen had increased to
827,000, only 65 per cent. of the children were attending school, and
only one child in three was able to read and write. This is a state of
things that must be changed.

Secondary education, as far as numbers go, is in no better case; there
are sixteen “colleges,” with 4100 pupils. The State Universities of
Buenos Ayres and Córdoba and the three provincial Universities of La
Plata, Santa Fé and Parana, with 3000 students, are relatively better.[9]

[Footnote 9: The writer does not give the statistics of those who go
abroad to study; the number is, of course, very considerable, especially
of those who go to Paris.——[TRANS.]]

The three orders of instruction ought to work together to form a
national spirit and a moral unity; but the Government should not forget
that primary instruction is the basis, and that it is the only kind of
instruction that can be bestowed upon each generation in its entirety,
and that the children of each generation should be taught at an early age
not only the ideas necessary to the life of the individual, but also, by
means of the elements of national history, ethics, and applied science,
the knowledge and love of their native country.

The Argentine Republic as yet counts few men to whom the exigencies of
life leave leisure to consecrate themselves entirely to letters or the
sciences. It has some distinguished writers, but they usually find a
recompense for their talent in the public press; for in Buenos Ayres more
than 200 journals are published. Men write as hurriedly as they act. It
is to be hoped that before long, with the increase of wealth, there will
arise men of science, who will find no lack of material in the country,
and men of letters, historians, novelists, sociologists, etc., who will
also never lack for matter in this busy, humming hive. Such men are
necessary, because their life-work goes far to make up the intellectual
capital of a nation, and even to form nationality itself.

       *       *       *       *       *

In my introduction to M. Latzina’s book, I glanced at the whole continent
of South America, and I remarked that civilisation had scarcely
penetrated the interior of this vast continent; that the density of
its population was extremely low; that the economic, intellectual and
political life of the continent was concentrated, if I may so use the
word, upon its periphery; that is to say, upon the shores which are in
touch, through navigation, with the rest of the world; that the Argentine
Republic formed the southern portion of this belt connecting Uruguay and
Chili; that this belt is wider where the penetration of the interior
is easier and the climate more favourable. This belt has also been
widened in Southern Brazil by the construction of railroads. It is still
wider in the Argentine, because the network of railways is more widely
distributed, the soil is of even quality and cultivable, and the climate
temperate and favourable to expansion.

For the purposes of this present Introduction, let us imagine a vaster
area——the whole earth, or, at least, the three inhabited zones of the

The torrid zone contains nearly a third of the land surface of the earth,
and only a quarter of its population; the density of population is thus
below the average. Original civilisations have existed in the torrid
zone——for example, Mexico and Peru before the arrival of Europeans——but
these existed on higher plateaus where the climate was not tropical.
There were civilisations in India and the East Indies, but these were
imported from the valley of the Ganges. There are to-day intertropical
countries which exhibit an active economic life: India, Mexico, the
Antilles and the seaboard of Brazil. Nevertheless, in the greater part
of the torrid zone it would seem that the continuous high temperature
saps human energy, and also renders it to a great extent unnecessary, by
simplifying life, reducing as it does the number of man’s essential needs
by facilitating the satisfaction of those which are, like alimentation,
strictly necessary.

The temperate zone of the north is the most favoured of all these. It
contains nearly half the land surface of the globe. It is also the
most populated, and the average density of population is far higher,
for it contains about 1,207,000,000 inhabitants, or roughly speaking,
three-quarters of the population of the globe. Here it is that we find
massed the four great sources of the ancient and modern civilisation of
the world, which also correspond to the four great groups of mankind;
China with Japan; India, with the Deccan running down to the torrid zone;
Europe, and the United States and Eastern Canada. In the three first
centres the density of population is far greater than in any other large
country. In the fourth, the number of human beings (some 94 millions)
and the density are far less; but this centre has become one of the most
important, by means of its activity of production.

There remains the temperate zone of the south. In this zone, the ocean
occupies relatively the largest space. The land emerges from it only at
the termination of three continents——America, Africa, and Australia,
terminated by Tasmania and New Zealand. Before the arrival of Europeans,
each of these divisions was absolutely isolated, without any relations
with the others, and inhabited by races entirely savage. The coming of
the Europeans who peopled them, and the maritime commerce which ensued,
have awakened them to civilisation. In the case of America, we have seen
that free colonisation was not commenced until the nineteenth century. In
Africa, at the opening of the nineteenth century, there were only a few
ports occupied, and Australia was still practically untouched. To-day,
in the temperate zone of the south, which comprises only a twelfth part
of the land surface of the globe, there are 24 millions of inhabitants,
nearly all civilised and of European descent. This population amounts to
1·5 per cent. of that of the globe; its density, therefore, is below the

It is, however, the zone in which the population has relatively increased
most rapidly since the beginning of the nineteenth century, for at the
outset it certainly did not count a million inhabitants. The Australian
and African divisions have owed their good fortune to gold, and in a
lesser degree to wool; but gold mines are a source of wealth which is
exhausted by exploitation. In Australia, where the extent of arable lands
is limited, immigration has at present practically ceased. In Africa the
soil is little suited to culture, and immigration to the Transvaal has
been recruited rather among Asiatic coolies than among free workers of
European race.

In this southern temperate zone, the Argentine Republic is the State
which has the most numerous population: that in which the population has
known the greatest increase, and in which economic conditions promise the
widest development in the near future. The perfecting of refrigerating
processes will certainly facilitate the exportation of meats, and it is
to be hoped that the interests of trade, under the necessities of the
food supply of the labouring classes, will finally overcome the obstacles
which the European producers oppose in the way of imports. The demand for
wheat, like the demand for meat, may vary according to the year and the
protective legislation of the nations; but in general we may say that it
will increase rather than decrease, because the population of Europe,
and especially of Central and Western Europe, is for ever increasing in
numbers and in density, so that already it cannot suffice to itself by
producing its alimentary needs from its own soil, and in proportion as
it becomes wealthier it will consume more white bread and more butchers’
meat. The United States and Canada continue to export wheat; but the
rapid increase of the urban and industrial population of the United
States will assuredly limit this exportation to a very great extent in
the twentieth century.[10]

[Footnote 10: The consumption of wheat in the United States averaged 200
million bushels between 1871 and 1875, and 531 million between 1903 and
1907. The exportation averaged 62 million bushels between 1871 and 1875,
and 122 million between 1903 and 1907.]

The Argentine Republic, where the harvest is due in January, so that its
wheat arrives in the European markets by March, is the country destined
to profit the most by these advantages. It must learn how to make use of
them wisely, practising a policy of peace and concord, increasing its
powers of stability by the development of the sentiment of nationality,
and by inspiring confidence both in foreign capitalists and in immigrants
by accumulating capital of its own, and by learning to retain, in spite
of success, the foresight which warns of perils and the prudence which
avoids them.

                          E. LEVASSEUR,

                          _Member of the Institute,
                          Administrator of the College of France._


This book, intended to make known in Europe the present situation and the
economic future of the Argentine Republic, comes at an opportune moment
to fulfil its mission of popularisation.

During the last ten years of the nineteenth century the Argentine has
suffered all the misfortunes and known all the disasters that can affect
a rural and agricultural people. The locust, coming from the Tropics,
devoured the crops; anthrax, imported from Europe, decimated the cattle;
the threats of a war with Chili imposed enormous expenses and exhausted
the national revenue; finally, a commercial and industrial crisis, and
domestic disturbances, consequent upon the general misfortune, completed
the tale of calamities which put the vitality of the nation to the test.

But as there is no night so long that it has no dawn, all these shadows
fled away. Our quarrel with Chili was submitted to arbitration, and the
decision of His Majesty the King of Great Britain not only terminated
a cause of difference of fifteen years’ duration, but re-established
fraternal relations between the two Republics. The rural plagues were
attacked and vanquished by measures which experience indicated as
preventive of recurrence; commercial and industrial prosperity returned;
the tranquillity of the interior was assured; and the general welfare
increased. To accentuate still further this beneficent reaction, the
immense and fertile plains of the pampa, open to the activities of the
agriculturalists, began to produce abundant harvests, which struck the
European markets with amazement, and diverted towards the Argentine a
current of gold which was estimated at more than £20,000,000, and a
stream of immigration, which, in the year 1904, brought 125,000 workers,
and which promises to be even greater in the present year.

The Argentine Republic has issued triumphantly from its lengthy and
severe ordeal; it has emerged richer, stronger and more confident of its
own destiny than at any other period of its history; and the increase
of its revenues and the rapid growth of its prosperity have secured the
attention of the great financial centres of Europe.

Public curiosity being thus awakened, many people have inquired: What
is the Argentine? How far is the development of its wealth a sound and
durable process? What is the probable future of its people? Is it a
meteor that flashes brilliantly through space, or a star rising upon the
economic and political horizon?

While some content themselves with asking such questions and awaiting
their reply, M. Lewandowski, the representative of one of the greatest
credit establishments in France, wished to gain some practical experience
of the phenomenon. He took the most certain, most practical means; took
steamer, crossed the ocean, and landed in the Argentine. With the learned
collaboration of Señor Alberto Martinez, one of the most competent of
men in matters of statistics and finance, he made a profound study of
economic questions, and the present book is the outcome of their common

This book should be read by all those who are not convinced that the word
Europe sums up all humanity; but who take the pains, on the contrary, to
follow the development of all other nations; understanding how necessary
it is for the great nations to observe the progress and evolution of
the younger peoples. Thus they avoid the risk of being surprised by the
sudden apparition of great economic or political forces which they had
not foreseen, or by which they had not known how to profit.

South America suffers from a prejudice that we cannot unhappily disclaim
as being unjustified. The directing classes in France, as in all other
European nations, with the exception of a small commercial and financial
circle, seem to have been kept in intentional ignorance of all things
relating to the nations of the new continent. The Argentine, Chili,
Brazil, Venezuela, Ecuador,——countries separated one from another by
enormous distances——are none the less, for the generality of Europeans,
more or less one and the same thing; that is, they form a kind of
a geographical nebulosity, which is known as _South America_. The
post-office employés of Buenos Ayres have often occasion to smile when
they read the addresses inscribed on the envelopes of letters dispatched
by the learned and scientific bodies of Europe, and Argentines residing
abroad continually find food for reflection in the questions asked them
by persons occupying the highest positions.

Yet for the old world there is every incentive to study more closely
the development of these new peoples. It is enough to point out that
the Argentine to-day occupies as significant a position as that held by
the United States at the beginning of the nineteenth century; and that
its continued evolution will undoubtedly, before the end of the present
century, give it an importance equal to that of the United States at the
present time.

In a conversation with Mr Roosevelt and his Secretary of State, Colonel
John Hay, I had occasion to make this very remark, and the President
replied, with the rapidity of judgment and the affirmative tone which are
so characteristic of his mind: “In less time than that; you will find
fifty years enough; for you will profit by all our experience and all the
human progress effected during the nineteenth century.”

The shadow of discredit which has hitherto lain upon South America is
explained by the continual anarchy to which the majority of its peoples
have lent themselves since the immense colonial empire of Spain threw off
its fetters in the first quarter of the last century, in order to break
up into fifteen separate republics. This anarchy and disorganisation,
compared with the orderly spirit of progress which has reigned in the
great republic of the North, have given rise to the belief, to-day
general, that the so different destiny of these States was due to the
special qualities and aptitudes of the Anglo-Saxon race, which the Latin
races lacked.

This belief results from a superficial and incomplete examination of the
facts, and has gained easy acceptance, even in works of a more or less
scientific nature, such as _The Psychological Laws of the Evolution of
Peoples_, in which the author cites, with regard to the Latin races and
the peoples of South America, a number of inaccurate and prejudiced
facts, which have been gathered from the writings of a dyspeptic and
ill-tempered journalist. Such data have caused M. Gustave Lebon to deduce
psychological laws which are hardly favourable to the South American

If we wish to gain some idea of the true causes of this diversity of
destiny between the peoples of North and South America, we must study the
origin of each and the particular form which colonisation has assumed in
each case; forms imposed by the force of historic facts rather than by
the will of man.

The Anglo-Saxons arrived in the American coasts and founded, in the first
half of the seventeenth century, such cities as Boston, Charleston,
Philadelphia, etc., when America had already been discovered and explored
by the Spaniards a century and a half before. These colonies were formed
of groups of families who had abandoned their mother-country to seek a
new one, where they could live and labour free from the persecutions of
religious and political intolerance.

When these colonies attained a certain fame, the surplus of the
overflowing populations of Europe was naturally attracted by these virgin
and fertile lands, relatively near at hand though across the ocean. Thus
there formed a current of immigration which rapidly peopled America and
utilised the great natural resources of its enormous territory. In this
way was gradually formed a new people, which was to a certain extent a
development of the various nations from which it originated, and which
preserved their customs and their political and social habits.

These colonists began by buying land of the native tribes; but,
increasing in numbers and in strength, they found it more convenient
to rob them, thus forcing the Red Indians to retreat towards the north
and west; and for reasons of self-respect, or on account of religious
principles, no deliberate attempt was made to mingle with the indigenous

This form of colonisation, whose prime cause was to be found in
persecution, not in the execution of a preconceived plan, resulted in the
existence, at the end of the eighteenth century, of thirteen colonies
peopled exclusively by men of the white races, originally natives of
the countries of Northern Europe, who had transported to this new soil
their manners and customs, their social and political laws, their
liberal traditions and their economic system, so that from the moment
they declared themselves independent, they were able immediately to form
a single nation, united by all the ties which make for the cohesion of a

[Footnote 11: The late Signor Pellegrini, in his anxiety to defend the
Latin races, is not strictly impartial. At the time of the Declaration
of Independence the population of the States was very largely English
(with a substratum of Dutch in New York) but of different periods; and
these different periods preserved their own traditions. The difference
between the New England Quaker and the Kentucky trapper, or the Virginian
fox-hunting squire, and the Dutch patroon or Highland crofter, was as
great as any to be found among the Latin races, if not greater, and was
largely a difference of arrested periods as well as a racial and a social
difference. The result was that Federalism was accomplished peacefully
only by the genius of Hamilton.——[TRANS.]]

To attain such progress, to reach the summit on which they rest to-day,
the United States had only to persist in the same path, to follow the
same groove, and the incontestable merit of this people and of its great
statesmen is that they have been faithful to the principles of liberty
and equality which they inherited from their ancestors, the venerable
“conscript fathers”; principles which they ratified in the admirable
Constitution whence this vast political organism has derived its
cohesion, its vitality, and its strength.

How different were the origins of the peoples of Latin America! The
Spanish sailors did not cross the ocean like the passengers of the
_Mayflower_, or the companions of Penn, seeking solitary shores, known
though distant, where they might establish a home, there to live and
labour in peace and liberty.

The Spanish navigators, as brave as they were audacious, launched
themselves into the unknown, guided only by their own genius, in order to
discover a world, to conquer new lands, new subjects, for their country
and their king; and in the pursuit of that heroic dream they performed
exploits which to this day amaze us by their audacity.

These were the famous _conquistadores_, whom one of their descendants,
José Maria Hérédia, has celebrated in the admirable lines:——

      “As from the natal charnel-heap a flight
          Of falcons: sick of purseless pride at home
          By Murcian Palos pilots and captains come
      With brutal and heroic dreams alight:

      They seek the fabulous ore that comes to birth
          And ripens in Cipango’s distant mines,
          And the trade-wind their long lateens inclines
      Toward the dim limits of the Western earth.”

These first colonisers of Spanish America——soldiers, missionaries,
officials, adventurers, men without family——seized upon a whole
continent, which they discovered and conquered at the price of unheard-of
exertions. They parcelled out the land, subjugated the native tribes,
reducing them to servitude in their famous _encomiendas_, or putting
into experimental practice, as in the Jesuit missions, theories of
collectivism, which is to-day regarded as a modern invention. It was a
true feudal system that arose in the new world.[12]

[Footnote 12: It must be remembered, in comparing North with South
America, that the former also had its period of extensive slavery, its
plantations worked by convict labour, and for a period an almost feudal

If, on the one hand, the native races were initiated into the doctrines
of Catholicism in exchange for their liberty and independence, they
did not, on the other hand, receive from their masters any political
instruction, but preserved their habits of submission and passive
obedience to their chief, which constituted their sole political

When, therefore, the day of emancipation arrived, and this enormous
colony, in arms against its oppressors, declared itself independent, and
divided itself into several Republics, the great mass of the population
consisted of Indians converted to Christianity, and half-breeds, who
preserved their habits unchanged and had no ideas, no traditions, other
than that of government by individual might.

Only in the urban centres did the white race, with its conception of
political institutions, predominate. And when the new Government wished
to organise itself in an independent manner, the two tendencies and
traditions, which correspond to two distinct mentalities, violently
clashed, and began that long struggle, not wholly terminated even to-day,
of which the history is the history of anarchism in America.

Another factor that also procured this conflict was the colonial
political economy of Spain, which was not only a mistake, but a mistake
of the period; an error which closed the whole continent to commerce,
shut it away from the outer world, and maintained these masses of
humanity in ignorance and isolation, in order to exploit them simply as a
machine, or as an element of wealth for the service of their masters.

The problem which confronted the politicians of South America when they
found themselves face to face with this new people, whom they must of
necessity organise, was thus very different from, and far more difficult
than the problem which the founders of the North American Union had to

These native masses obeyed with all their might and with the utmost
enthusiasm so long as it was a question of fighting against the foreign
troops and of winning their independence; but, victory once assured,
guided by their leaders, the _caudillos_, most of whom were white, they
revolted against the tendencies which began to show themselves among
the Europeans of the cities, and in many places succeeded in dominating
over them by force of numbers, thus preventing all political and
administrative progress, and maintaining, as their form of government,
the personal, arbitrary, and irresponsible power of a leader, that is, of
the _caudillo_.

The written Constitutions which these people had established upon
declaring their independence, and which were inspired by the
Constitutions of the United States or the Swiss Republic, were thus
reduced to a dead letter, as they were in complete contradiction to the
political habits of the mass of the populace, and required, for their
application, a political education which the peoples of South America did
not possess. A whole century had to elapse before immigration, material
interest, and the influence of civilisation, were able slowly to modify
the political mentality of these peoples, by reinforcing and popularising
the principles of government, extirpating the elements and suppressing
the causes of the anarchy which had so long disturbed them.

Among the nations which experienced these beneficent influences, the
Spanish colony known as the _Viceroyalty of the Rio de la Plata_, to-day
the Argentine Republic, was quite specially favoured. Its territory,
composed of immense prairies, the celebrated Argentine “pampas,”
stretching from the sea-coast and the river littoral, offered the unique
wealth of their fertility and their climate. There were no mines of gold
or silver to arouse the greed of adventurers; they came to these regions
only to traverse them, and so to proceed immediately to the gold-bearing
regions of the distant Cordilleras.

Moreover, the first colonists who established themselves on the banks of
the Plata, repulsed and expelled by the natives, were forced to abandon
a certain number of cattle and horses, which found in these prairies an
admirable opportunity to live and multiply in freedom, until finally they
formed the immense herds of wild cattle and horses, whose hides became
the principal wealth and the chief article of commerce of these regions.

Although the Rio de la Plata had no commercial relations with the outside
world, and was only able to trade with Cadiz, the immensity and the
solitude of its shores favoured a contraband trade; to such a degree that
English, Dutch, and Portuguese smugglers came from all parts to exchange
their manufactured articles for the hides of these wild herds.——This it
is that explains how Buenos Ayres was able from the outset to become a
great commercial centre, in which the trades dependent upon stock-raising
quickly occupied the first place.

Commercial activity, the development of communication by sea, the
fertility of the soil, the climate——all contributed from the early days
of emancipation to attract European immigration. This immigration, like
that which peopled the America of the north, was composed of families who
came to settle, to form new homes, to labour. These families, following
the example of their predecessors in the United States and for the same
causes, did not mingle with the native tribes, but struggled against
them, and forced them to abandon their lands and fly to the south,
until at last, after a long and cruel struggle, they almost completely

This immigration increased year by year, and to-day the great majority of
the population of the Argentine Republic——a population now exceeding 5
millions——is of European origin.

That this immigration, which flows from all the nations of Europe, has
been the chief agent of the present prosperity of the Argentine, and
is the condition of its future greatness, is an incontestable fact.
One of our leading statesmen has declared, of America, that “to govern
is to people”; and this aphorism has remained a fundamental principle
of government. To recognise the full force of this assertion, we must
reflect that these unusually fertile prairies, situated in a privileged
climate, near the sea-coast or on the banks of enormous rivers, navigable
even by transatlantic steamers, need nothing but human labour to
transform them, with less effort and at less expense than anywhere else
in the world, into immense fields of wheat or maize, or pastures of
lucerne, covered with herds, able to produce bread and meat enough to
feed all Europe.

Accordingly the agricultural production of the Argentine Republic
is limited only by the number of hands which lend themselves to its
exploitation; in which we have a repetition of the very phenomenon which
has served as the foundation of the development of the United States.

Under these conditions the progress of the Argentine Republic is a
necessary and inevitable fact, which extraordinary circumstances might
for a time retard, but which nothing could finally arrest; except,
indeed, one could restrain the daily exodus of fresh swarms from the
human hive, which abandon the old soils, exhausted by production, to seek
out the fertile, virgin, and unpeopled areas of the globe.

Hitherto this exodus has been directed principally to the United States;
attracted thither by a host of special and favouring circumstances. But
the time is rapidly approaching when North America in turn will find
herself populated to the saturation point, and will no longer be able to
receive the hosts which benefited her formerly. The laws of the United
States are already beginning to impose conditions upon immigration which
are constantly becoming more severe; and these laws are imposed by the
two great political forces——the superior social classes and the lower
classes of the people.

The upper classes, Anglo-Saxon in origin, fear that contemporary
immigration, coming as it does from peoples of alien race, from the
south or east of Europe, may modify or enfeeble those great moral and
political qualities to which they attribute the greatness and prosperity
of their nation. On the other hand, the federated workers see in these
new arrivals, healthy and vigorous, but having fewer needs, a source
of dangerous competition, which may have a disastrous influence on
conditions of labour and payment.

The stream of irrigation which is now setting in towards the United
States, and which amounted in numbers to 800,000 in the year 1904, must
necessarily therefore, as time goes on, turn aside in other directions,
and as it will nowhere meet with more advantageous circumstances than in
the Argentine, it will flow thither as it flows already, but in greater
and greater numbers, resulting in a development of wealth and power
superior to any hitherto known.

Some persons, however, formulate certain reservations as to the
consistency and the political and social value of nations formed by these
human inundations, composed as they are of men of different races, having
neither the same language, nor the same religion, nor the same customs;
they doubt whether this new Babel can give birth to a national spirit
sufficiently vigorous to impress a character of political and moral unity
upon these new recruits.

In order to prove that these fears are ill-founded, we have only to take
the practical example furnished by the United States. Into this vast
national crucible there poured, from the outset, the stream of emigration
from Great Britain, Holland, France, and Spain; later came Scandinavians,
Germans, Lithuanians, Poles, Hungarians, Italians, Syrians and Arabs.
From the fusion of all these elements has issued a new race, homogeneous
and powerful, with a strong national spirit which is known as “the
American spirit,” and under that name has won the respect of the world.
This result is neither accidental nor due to special antecedents; it is
the consequence of a natural evolution, ably and intelligently directed.

The European law, which attributes to the son the nationality of his
father, may have had its justification in the past; to-day it is
maintained only by force of tradition.

Nationality and love of country are only an extension of the love of the
family and the home; and these sentiments cannot, any more than others,
be forced upon one by law. There can exist for a man only the home and
the family in which he was born and bred. Doubtless he will feel himself
attached to the home of his forbears by ties of sentiment and respect;
but all the roots of his intimate feelings bind him to the home and the
family into which he was born; they are in his blood, and thence he has
received the first impressions which mould his character and imprint
those characteristics which form his personality.

It is the same with nationality and the mother-country. It is useless to
attempt to persuade either child or man that his country is not that in
which he was born, in which he has grown up, but another distant country
which he has neither known nor seen.

The difference of origin among the children of immigrants of different
nationalities disappears in childhood, through the community of life in
school and workshop; through sharing alike in work and play; and it is in
the earlier years of life that the mind is moulded by its surroundings;
in these years develops that feeling of attachment to the soil, of union,
solidarity, and common memories, that shows itself later in an ardent
patriotism. Unity of language necessarily favours the process of fusion,
and explains the fact that the descendants of immigrants of different
race, religion, language, habits and traditions, are able to fuse so
completely as to form a perfectly homogeneous population, one in mind and
in sentiment, thus constituting a new nationality, young, vigorous and
strongly individual.

We have thus under our eyes a practical example of the unity of the human
race. The hazards of life, in the course of centuries, having dispersed
the primitive race throughout the earth, it has formed, under the
influence of circumstances, new types, which in the course of time have
met and mingled, to form new crosses in their turn, which as a matter of
fact are only the modalities of a common primitive race.

The same phenomenon is being repeated in the Argentine, as in all
the American republics, and the spontaneous and vital sentiment of
nationality continually strikes the observer, who notes the pride with
which a child born in Argentina, whether he be the son of a Spaniard,
Frenchman, Italian, or German, affirms, when questioned, that his
country is the Argentine.

Thus this Republic possesses all the requisite conditions of becoming,
with the passage of time, one of the greatest nations of the earth. Its
territory is immense and fertile, its surface being equal to that of all
Europe, excepting Russia; it is capable of supporting with care at least
100 millions of human beings; almost every climate is to be found within
its limits, and, consequently, it can yield all products, from those of
the tropics to those of the polar regions. Its rivers and its mountains
are among the greatest of the globe. As its maritime frontier it has the
Atlantic, which brings it into contact with the whole world.

It is governed by institutions more liberal than those of any other
nation, especially in all that affects the foreigner; it regards the
influx of immigration with approval, and seeks to promote it. In
proportion as its vast vacant spaces become peopled their value is
increased tenfold, and production grows at an enormous pace; for a
single family, by the aid of modern machinery, can exploit a larger
area of soil, yielding a produce far greater than is required for its
own consumption; a fact which explains the surprising rate at which the
export trade has increased.

Such are the true causes of the prosperity of this country, as is proved,
with abundant detail, by MM. Martinez and Lewandowski; and as these
causes are not accidental, but fundamental and permanent, they should
produce in South America the same results as in the North.

Granted that wealth and prosperity are essentially conservative elements,
we have here a serious guarantee of political stability; the more so as
the country has already passed the difficult age and is cured of the
malady endemic to South America——anarchy.

It is also to be hoped that our Argentine politicians, taught by
experience, and comprehending all the responsibilities imposed upon
them by their noble mission——the work of racial regeneration and the
betterment of South America——will succeed in making constitutional
government an actual fact, by restraining and uprooting the tendency to
personal power, which is the lamentable heritage of indigenous tradition.

It is a great nation that is rising on the brink of the twentieth
century; the mistress of an enormous inheritance. Immigration and the
increase of the birth-rate are furnishing it with the arms it requires;
it lacks only those reserves of capital which, like all new peoples, it
has not as yet had time to create.

In no country can European capital find a more fertile or advantageous
field for its operations: a fact already well known in England; and one
the authors of this book have wished to emphasise for the greater benefit
of French capital. In this they serve the interests of France and, still
more particularly, those of the Argentine Republic; and in the name of
my own compatriots, as well as for myself, I take this opportunity of
expressing my sincere gratitude.

                                                    C. PELLEGRINI.

                          THE ARGENTINE IN THE
                              20TH CENTURY


Before commencing a study of the financial and economic situation in the
Argentine Republic, it is important to decide at the outset as to the
spirit in which this examination should be pursued, and the method most
proper to such an inquiry. We tread upon a novel and peculiar field, and
any too rigid comparison with the events of other countries might easily
lead us to errors of appreciation.

Above all we must practise the philosophical principle _nil admirari_;
we must be astonished at nothing, and abstain from all too absolute
judgments. Although, as the figures of foreign trade will show, the
progress of the country has surpassed all expectation, it is, on the
other hand, almost impossible to foretell how far the results of one year
will be ratified by the year following.

Like all young nations, the Argentine progresses on its path to the
unknown by leaps and bounds; it is as yet in an unstable condition, in
which the oscillations of prosperity are still of great amplitude and
exceedingly sudden.

It is easy to discern the cause of this essentially unstable condition.

The Argentine, in its present phase, is an agricultural country, whose
principal sources of wealth are cereals and stock-raising; the result
is that each year the whole life of the country is affected by the
harvest.[13] On the harvest depends, in a great degree, the movements of
external commerce; it produces those sudden changes which occur from
year to year, and which result occasionally in a variation of £8,000,000
to £12,000,000 above or below the average.

[Footnote 13: We use the word harvest here in its widest sense, but we
must ultimately distinguish the results of stock-raising from those of
agriculture, since they do not necessarily vary in the same direction.]

The harvest influences not only the exports, more than half of which
consist of agricultural products, but has no less an influence on the
value of importations.[14]

[Footnote 14: The value of the exports in 1907 was £59,240,874, and
according to the official figures the products of agriculture amounted to

The national powers of consumption are, in fact, very intimately
connected with the measure of the agricultural output; as the latter
is bad or good, the home consumption absorbs more or fewer imported
products. Thus the poor harvests of 1901 and 1902, which resulted in a
fall of nearly £1,800,000 in the cereal exports, produced in 1902 a fall
of £800,000 in the imports of iron and materials used for construction.
The same depression was visible in the imports of textiles and beverages,
and still more so in those of articles _de luxe_. The spending powers
of the country being closely dependent on the facility of realising the
products of the soil, it is easy to understand that in the case of a bad
harvest or a poor market the consumers have no longer the same powers of

We find the same ups and downs in the figures of the Budget, the
contributive powers of the country being influenced by the same causes
as its consumption. If the crops are poor, the Budget of the following
year shows immediate traces of the fact. Thus in 1902, the year of the
bad harvest, the total receipts were estimated at £5,534,000 in paper,
and £9,486,669 in gold; but the actual receipts were only £5,221,000 in
paper, and £8,047,755 in gold; a deficit of £1,438,913 in gold.

At the same time the Customs receipts, which are the most variable item
of the revenue, on account of their direct relation to consumption, have
fallen from one year to another (as in 1903 compared with 1902), as much
as £1,200,000 in consequence of the agricultural crisis.

There is an equally direct relation between the financial situation and
the results of the harvest. If the commercial balance is favourable, the
Argentine becomes a creditor of foreign countries by the excess of its
exportations, and the resulting payments in gold, after the deductions
of the interest on the foreign debt, increase the proportion between the
metallic currency and the monetary circulation in general.

As these few examples prove, the prosperity of the country is
subordinated to the result of the harvest; the latter gives the measure
of all improvement, all progress of a financial and economic order.
Unlike the ancient European nations, the Argentine Republic has no
reserves of accumulated capital behind it, so that it can live on its own
savings in times of crisis. Its commerce and its industries depend almost
exclusively upon its agricultural yield, and share all the latter’s

All depends on the value of the soil, the basis of public and private
wealth. The power of expenditure which follows a good harvest may
contribute towards proving personal property, but the latter remains
always strictly related to the agricultural yield and general produce of
the soil, and does not constitute an easily-realised reserve.

For the rest, we must recognise that, as a rule, this capital does not
remain inactive, and is as little as possible sterilised by investment
in the public funds. Those who possess available cash, in the shape
of revenue from a large estate, usually employ it by increasing their
stock of cattle, or in reclaiming more land, or by investing it in other
estates; so that all that comes from the earth returns to the earth, and
goes to increase its yield.

The peculiar situation of this great agricultural country, which
constitutes at once the strength and the instability of the Republic,
shows us in what spirit and by what method it should be studied. All
depends upon the yield of the soil, for this is the great dispenser of
the national wealth; it is therefore the agricultural system that we must
examine first of all, if we wish to arrive at a solution of the problems
arising from the present condition of the Argentine or predict its future.

To follow out this general plan, we must consider the country first
of all from two standpoints: we must examine into its production and
its markets or outlets, in order to learn the true conditions of its
existence, the value of its soil, and its sources of revenue.

We shall then proceed to examine its administrative machinery, showing
how the Argentine lives and progresses as a nation, and to analyse its
financial and monetary organisation with reference to the economic

The two portions of this scheme are closely connected, and their study
must lead us to the same conclusion, that the Argentine is a nation in
a state of growth, and, like all young nations, still uncertain of its
first steps; but it is animated by a spirit of initiative, and urged by
the breath of progress, which may lead it to a high destiny among the
great productive countries of the earth.

                     THE ARGENTINE NATIONALITY[15]

Is there an Argentine nationality, and what is its significance in
    respect of the territory it occupies?——The formation of this

An examination of the qualities of the Argentine people.——Sense
    of progress; remarkable faculty of assimilation: character
    essentially practical.——The fusion of the Latin genius with
    Anglo-Saxon energy.

The contrast between the political world, with its instability and
    lack of organisation, and the economic world, which manifests
    intense vitality and national progress.——The necessity of
    developing the national idea, and of raising it above material
    questions.——The slow elaboration of a new race born of the
    various elements of immigration.

[Footnote 15: We must here explain that the Argentine possesses two
currencies: the piastre or dollar, whose value is 5 francs, and the paper
piastre, which by the law of conversion is equivalent to 2 francs 20, or
1s. 7·2d.

As for weights and measures, the decimal metric system has been adopted.
In surveying large areas, the square league is occasionally employed as
unit, which contains 2500 hectares, or 5628 acres = about 9-1/2 square

We should also explain that the Argentine Republic, of which the Federal
capital is Buenos Ayres, is divided into fourteen autonomous Provinces
and ten national Territories. The Provinces, in the order of population,
are as follows: Buenos Ayres, Santa Fé, Córdoba, Entre Rios, Corrientès,
Tucuman, Santiago de l’Estero, Mendoza, Salta, Catamarca, San Juan, San
Luis, La Rioja, and Jujuy.

The national Territories are: La Pampa, Misionès, Nequen, Rio Negro,
Chaco, Formosa, Chubut, Santa Cruz, the Andes, and Tierra del Fuego.]

To present a complete picture of the Argentine, it is not enough
to describe its configuration, its great rivers, its climate, its
population, its forms of agriculture, and the value of its soil; all
this is a dead letter, and will by no means yield us the secret of the
country’s future, unless we first resolve one question of a sociological
character: Is there an Argentine nationality, and what does it signify
in respect of the territory which it occupies? Could one, for instance,
estimate the importance of the United States merely from the point of
view of their agricultural and mineral wealth, without taking into
account the work and the character of the admirable Anglo-Saxon race,
which has adapted itself to American soil, and has succeeded in obtaining
from it its full value?

And could we explain the fact that certain countries of South America,
which also, thanks to their natural wealth, have all the elements of
rapid development, have remained stationary, and hardly count as nations,
if the question of race did not throw light on the mystery, showing us
that with the most favourable factors of the soil, a ferment is essential
to start the growth of the seed?

Concerning the Argentine, this then is the problem which we have to
consider, if we wish to see further than the present moment, and to judge
in what measure its progress may be consolidated and even accelerated. In
other terms, we must understand whether the Argentine must depend upon
a fortuitous grouping of individuals brought together by the various
streams of immigration, and having no common tie but the desire to enrich
themselves, or whether these various elements are destined to become
fused, and in time to form a true nationality, with its own traditions,
its own ideal.

This latter is naturally the end to be pursued by the Argentine
Government, if it wishes to prepare for the future by making moral and
material progress go hand in hand. Its _role_ is not to manage the
country like a directing syndicate, but to direct all individual efforts,
all initiative, and all other available forces, to the same national and
patriotic end.

It was this idea that a President of the Republic, Señor Quintana, felt
it his duty to enunciate, when, upon assuming the Presidential authority,
he stated, in his inaugural message: “I am the head of a nation which has
in America an ideal”; and he added: “There is one common characteristic
among us that was discovered as early as the colonial period, in the
magnitude of plans of campaign, in the clamour of intestine conflict, in
the government of the constitutional period; it is, that we all bear in
our hearts the sense of our future greatness.”

How far can these aspirations be translated into facts? That is a
question we must examine seriously and with an absolutely unbiassed

We cannot study this question of the Argentine nationality in books;
for a country which has been so rapidly carried away on the tide of
material progress has but little time to examine itself. Neither has it
been able to form a literature or a sociology which might reflect the
dominant characteristics of the generation; it is only by an inquiry and
an analysis of the facts that we can isolate this element of nationality
from the various foreign elements which have contributed to its formation.

One factor that facilitates our task is the clear-sightedness of the
Argentines themselves, who are the first to recognise, with abundant
good-temper, their own shortcomings. They are almost exaggerated in their
self-criticisms when depicting themselves; and our work has been cut out
for us in avoiding too hasty generalisations and in softening certain too
rigorous judgments, although these emanated from men who were certainly
in a position to understand the tendencies of their generation.

One principle dominates the whole question: it is that which a
contemporary historian expresses in these terms: “When peoples come into
contact they begin by an exchange of their faults.” Such an observation
might well apply to a people like the Argentines, who are not yet settled
on their own foundations, and are constantly increased by immigration.

All the varieties of the Latin race have contributed to form this people:
Spain and Italy have made the largest contributions, and France has also
in her time contributed her share. The Argentine has even assimilated a
Basque population, of especial interest on account of its aptitude for
agricultural work, and its adaptability to its new surroundings.

Finally, the Anglo-Saxons have also entered the Argentine, to mingle
with the Latin element, and have given great assistance in opening up
the country, by setting an influential example of initiative, progress,
and energy. This penetration of the Latin race, a little indolent and
inactive as it is, by the energetic and progressive Anglo-Saxons, enables
us the better to understand the good and bad qualities of the Argentine

In short, if we are to obtain an unbiassed view of the national
physiognomy of this adolescent people, we must remember that its good
qualities, like its faults, are the result of the commingling of the
varied elements which have entered the country by immigration; elements
that have mixed and reacted upon each other, so that their dominant
characteristics have finally appeared in the Argentine character.

There is one gift which we cannot deny this people: intelligence,
joined to a remarkable power of assimilation. It also has that gift of
enterprise, that sense of progress, which are found in the Anglo-Saxon
races, and which have found such magnificent scope in the United States.

A young nation, without a past, the Argentine is not impeded, like most
of the Latin nations, by a load of custom, prejudice, and routine,
hampering its motions and impeding its progress. Profiting by the
experience of others, it knows how to adapt itself to the best; taking
its good wherever it finds it. It creates nothing, invents nothing, but
appropriates all new ideas, which find upon its soil the conditions
favourable to a rapid expansion. It is, indeed, formed after the likeness
of its own soil, which produces without effort and lends itself admirably
to every kind of culture.

This sense of progress is certainly the most characteristic trait of the
Argentine, and the one by which it is distinguished among the other Latin
nations of South America. Uruguay, for example, which possesses a soil as
rich, and offers the same facility of transport, has given no proofs of
initiative and vitality to lead one to hope that she has really entered
upon the path of progress. It is the same with Paraguay and many other
States, which have not succeeded in accomplishing any of the changes
demanded by modern civilisation.

The Argentine, on the contrary, has always known how to derive benefit
from whatever source was available, thanks to the current of immigration
which keeps it in permanent touch with foreign countries. It has also
assimilated the inventions and the methods of more civilised nations,
and has attracted men capable of applying them. At the head of the great
administrations of the State, one often finds specialists from Europe
or the United States, who bring the fruits of their experience, and
increase the intellectual possessions of the nation. The departments of
railroads, navigation, public works, and hygiene, thanks to these happy
selections, offer every security of efficiency in operation.

One may say, it is true, that this is the result of foreign influence;
but what does the origin of all these improvements signify in respect
of the future, so long as they become incorporated in the life of the
Argentine and contribute to its evolution? One thing which proves that
the instinct for progress is at the heart of the national temperament is
that it is found in the lower strata of certain public services in which
the foreign element plays no part. The administration of the police,
for instance, and that of the posts and telegraphs, to cite no other
examples, are conducted with as great a regularity as in any European

Thus, while allowing that the initiative of all improvements comes from
abroad, we must not overlook the fact that the Argentine has assimilated
them with the utmost facility, and that this gift of assimilation forms
to-day a valuable portion of the national patrimony.

Despite its eminently cosmopolitan character, which is a peculiarity of
its development, the Argentine Republic has succeeded in retaining its
own personality among so many diverse elements. It is the type of the
modern nation, whose ideal is that of the United States——_business_. A
man is _zonzo_ or _vivo_——a fool or more than capable——there is no medium.

From this point of view the Argentine is at the apex of its period; it
has no use for abstract ideas or immortal principles; its ambition being
above all to sell its corn and cattle and to enrich itself. Behind the
agitation of the political parties there is no other object than this:
to share in the exploitation of the country and to enjoy its wealth.
The heroic period is over for the Argentine; its independence is to-day
definitely assured; it pursues no dreams of conquest now, but seeks only
pacific victories for its products in the great international markets.

Prosaic as the present generation is, it is not, from our point of view,
completely without nobility; it loves its native soil and glorifies it;
not, assuredly, after the fashion of Virgil saluting the Latin soil,
fertile of heroes, but as a land productive of rich harvests, and the
source of material prosperity. This it is that explains the powerful
attraction which the Argentine exercises upon all those who have trodden
its soil. The country progresses with such rapidity, the value of the
soil increases in such proportions, that the most indifferent end by
being drawn into the stream. Those who come to live here without any idea
of final residence make up their minds to settle as soon as they hold the
smallest parcel of property. When a man has lived some little time in the
Argentine, and has watched the spectacle of its rapid development, he is
quickly seized by the business vitality which forces him to take part in
the great movement.

This love of the Argentine for his land may certainly have its noble
side, but he knows nothing of the moving spirit of poetry which clothes
that love in the old countries of Europe, where man becomes attached
not only to the cultivable land, but to all the memories of the native
village; the familiar hills and meadows, the old church, and all that
puts us into communication with the soul of places. It would seem as
though one holds more closely to the earth that demands the most labour,
the greatest efforts, even the greatest disappointments.

No one was ever more attached to the land than the Boer, who lived at
peace in an ungrateful soil, indifferent to the mineral wealth which it
might conceal. It was this land, where he lived an independent life, that
he defended so stubbornly; not the gold, which was yet the true wealth of
the country.

The Argentine also has seen pass over its soil the same rude generation,
having no other dream than independence. The “guacho” of old, a mixed
type of the Indian and Spanish races, the true son of the pampa, was
truly attached to the immense plain upon which he lived at the call of
caprice, a wild rider in every sense. To-day the type tends to disappear,
as civilisation, and more especially administration, everywhere make
their influence felt; as the ancient virgin pampa is transformed into
cultivable soil, bristling on all hands with barbed wire. As he was not
easy to domesticate, nor break in to any continuous labour, the “guacho”
has been supplanted little by little by the foreign farmer, the colonist;
and to-day he is almost submerged by the wave of immigration which has
invaded the country, and which forms now the major part of the population.

From the men of this new generation one must ask no other love for the
soil than that which is born of the profits they draw from it. They can
move indifferently from north to south, from east to west; the soil for
them is everywhere the same, provided the harvest be good. But, apart
from that, they nevertheless love this land of promise, and interest
makes them its children.

From this generation, whose principal traits we have noted, it seems that
we may in the future expect great things.

To be sure, if the world were to return to its old ideal, that of glory
or imperialism, we hardly know what place the Argentine would find in the
scheme of things. It is unsuited to a military policy; it has no ambition
to measure itself with neighbouring nations, which are far more eager for

But if we stand on the economic plane, the only one which interests us,
we must allow that this generation is well armed for self-defence in
every field of the commercial struggle. From the fusion of the Latin
genius with the Anglo-Saxon energy has issued a new product, extremely
capable in business, full of practical sense, and very open to progress,
which will be fully able to hold its own in a century in which money
is the great instrument of domination. This race, formed haphazard of
immigration, is yet the very race for Argentine soil; between the two
there is a correspondence, an adaptation, as perfect as if it were the
result of long-continued design.

To sum up: the Argentine nationality appears to a foreigner under
two distinct aspects; there is its political side, characterised by
instability and lack of organisation, and the economic side, in which
an intense national life and progress are manifested. Will this truly
abnormal situation, containing both very bad and very good elements,
perhaps, terminate favourably, making of the Argentine people not merely
a rich, but also a great nation? Will the development of public affairs,
left so far to the hazard of politics, even reach the plain of our
economic development? Will the Argentine nation eliminate, under the
pressure of material progress, the leaven of anarchy left behind by
a century of civil dissension? This is the secret of the future; this
is the great achievement which remains to be accomplished in order to
consolidate the present prosperity of the country.

In short, we must not lose sight of the fact that this prosperity has
hitherto been less the work of man than of nature, which has been
prodigal of her gifts to this fortunate land. This is a thought which
has been expressed in a speech in the Argentine Senate, in which Senator
Uriburu shows that Providence is always coming to the rescue by repairing
the fault of the State.

“It is Providence,” he says, “which so opportunely sends us the rains
to water our lands and to raise our marvellous crops; it is Providence
that has given us the greatest Minister of Finance we have ever known,
our fertile soil and our clear sky; the supreme Minister who looks after
all our needs, who saves us from all difficulties, and who, despite
our errors, continues to ensure the greatness of the Republic. Let
man appropriate his work, but let him render unto Cæsar that which is

And now if by some impossibility the situation were to change: if in
spite of the enormous extension of cultivated lands a period of bad
harvests were to follow the present period of fat cattle: would there not
be reason to fear that the whole national edifice, founded as it is on
prosperity, might become disintegrated, and crumble under the stroke of
adversity? This is the peril we must indeed seek to avoid; it is for this
reason that the intervention of a strong power seems necessary, in order
to restrain the germs of evil brought by so many races, and to prevent
the Argentine from falling back into the state of anarchy and revolution
which for her is only a distant memory.

Taking even a more elevated standpoint, we may add that in order to
amalgamate all the elements of immigration and to attach them to the
country, through good and evil fortune, we need another solvent than
personal interest or profit. To create a people it may suffice to give it
a body, but to make it live it must also be given a soul, at whose breath
the collectivity of individuals will be transformed into that moral unity
which we call the nation. This is a question of prime importance in
a country such as the Argentine, where the struggle for existence has
taken a particularly keen form, which scarcely favours the development of
disinterested sentiments.

It is for the State to develop among its people this national idea, and
to turn all individual efforts to its profit. Its duty is to raise its
authority above the medley of interest, to restrain ambition within a
just limit by the influence of moral and patriotic ideas, and so to
ensure the reign of justice and social peace, without which national
prosperity will never be more than ephemeral.

In imagining, from this aspect, the formation of a nationality, we have
no intention of criticising the country; still less do we deny the
process of evolution which has gradually transformed its organisation.
A nation is not created in a day, especially when it is a question of
a country so young as the Argentine, which in less than a century has
issued from the struggle for independence, and even to-day has hardly rid
itself of the revolutionary spirit.

For a nation to become self-conscious, centuries must pass; traditions
must be formed, and the great moral or intellectual forces of
humanity——religion, science, literature, even poetry——must develop the
sense of a collective life other than the life of business. And hitherto
the Argentine has had no time to produce generations of thinkers,
philosophers, and historians; still less poets. The most it has are
statisticians, who give it the precise figures of her commercial balance.

We do not doubt, however, that, thanks to material progress, this slow
elaboration of a new race will eventually be completed. In the first
phase of her existence as a nation Argentina, according to the spirit
of her Constitution, fraternally opened her doors to all who wished
to inhabit her soil. No restriction was placed upon the entry nor on
the permanent immigration of foreigners; on the contrary, legislation
and social customs combined to favour immigration. The result is, that
the new arrivals have regarded themselves as alien, in matters of
economics and politics, to the nationality with which they have become
incorporated; believing that their mission consisted solely in creating
and circulating wealth, while regarding the solution of the great
national problems with indifference.

But to-day the Argentine has entered upon a new phase; it must no
longer merely receive, it must also incorporate all these elements of
immigration, and, without awakening antagonism towards the foreigner, it
must set to work to absorb him into the soul of the nation.

This faculty of assimilation is a virtue of the American soil. The
United States have proved as much for North America, and it now remains
for the Argentine to do the same for South America. The new generation
of immigrants, having struck root into its hospitable soil, must live
completely in the national life, absorbing those feelings of patriotism
which animate the new citizen of the United States.

To give expression to these loyalist tendencies, we will confine
ourselves to quoting the memorable words which were spoken in the
Congress of Wisconsin, by an American congressman, born in Germany, the
Hon. Richard Günther; words which were equally applauded and approved
in Latin America. We shall perceive, through the very exaltation of his
phrases, what unreserved devotion a naturalised foreigner may bring to
his new country:

“We know as well as any other class of American citizens where our duty
lies. We labour for our country in times of peace, and we shall fight for
her in time of war, if ever such time arrive. When I say our country, I
naturally mean our country of adoption, the United States of America.
After passing through the alembic of naturalisation we are no longer
Germans; we are Americans. Our attachment to America cannot be measured
by the length of our residence here. We are Americans from the moment
when we reach the American shore, until the day when we are laid to rest
in an American grave.”

                                 PART I


                               CHAPTER I


CLIMATE——SOIL——Geographical situation of the Argentine; its
    boundaries, its area.

Climate of various districts. The prevailing winds. Nature of the
    soil; its fertility; adaptation to the culture of cereals
    and the raising of live-stock——Transformation of virgin into
    fertile land——The Pampa——The cultivable area——Conditions
    favourable to production——The plagues of locusts.

RIVERS——Their exceptionally favourable influence——The hydrographic
    system——Network of navigable river-ways: the Rio de la Plata,
    the Rio Parana——Conditions of navigability——Canals.

PORTS——List of the principal ports, with a summary of their trade——
    Buenos Ayres: description of the port, its area, its capacity,
    tonnage; its docks——The Central Produce Market——Importance of
    Buenos Ayres in comparison with the great ports of the world——
    The port of La Plata——The port of Rosario; increase of its
    traffic; construction of the new harbour conceded to a French
    company——Bahia Blanca; its development——The decentralisation of

The Argentine Republic occupies the southern extremity of South America
and runs from north to south from 21° 30′ to 54° 52′ of south latitude;
or 33° in a meridian line. From east to west it occupies a width of 20°,
between 54° and 74° of longitude.

Its territory is bounded to the north by Bolivia and Paraguay; to the
east by Brazil and Uruguay; to the west by Chili. Its boundaries by land
are 2980 miles in extent on the west; 993 miles on the north; the river
boundaries on the east are 745 miles in length. Finally, the shores of
the estuary of the Rio de la Plata and the Atlantic form a stretch of
1614 miles; all of which represents a total boundary-line of about 6334

The superficial area of the Republic has not hitherto been calculated
on the basis of a geodesical survey; it has been arrived at only by
calculation from charts which are more or less approximate. According
to the estimates most worthy of credence, and allowing for the latest
rectifications of the frontier, its present area is equivalent to
11,328,321 square miles. This is about six times the area of France,
which contains only 203,905 square miles. The Province of Buenos Ayres
alone is more than half as large as France.

The seasons in the Argentine, compared to those of the northern
hemisphere, are of course reversed. The summer corresponds to December,
January, and February; the autumn to March, April, and May; the winter to
June, July and August; and the spring to September, October, and November.

In the matter of climate, the Argentine may be divided into three
regions; those of the coast, the centre, and the Andes.

The coastal region comprises the Provinces of Buenos Ayres, Santa Fé,
Entre Rios, and Corrientès. The average annual temperature is about 66·2°
Fahr.; at Buenos Ayres it is only 62·6°. The average summer temperature
is about 77°, that of the autumn 64·4°; of the winter, 53·6°, and of the
spring, 62·6°. The hottest month is January, when the average is 77°; the
coldest is July, with an average of 51·8°.

In this coastal region the extremes of temperature are 107·6° in summer
and 41° in the winter; but these temperatures are both exceptional.
However, a temperature of 95° is very usual on summer afternoons. It is a
very unusual thing for the mercury to fall below freezing-point in winter
or to remain there. Snow is also a very rare phenomenon, only to be seen
perhaps once in five years.

A peculiarity of the Argentine climate in general is that the temperature
will change very rapidly during the day, or even during a few hours; the
change representing sometimes a difference of more than 36°, especially
in the spring, which is the most usual season for these rapid variations.

The climate of the coast region——that is, of a country consisting almost
entirely of plains——is, in general, influenced by the winds, which blow
in gales at all seasons. Northerly and southerly gales are the most
common; the first especially are very frequent. In Buenos Ayres one
finds, during the summer, an alternation of sea and land breezes; the one
during the day, the other during the night.

The northerly winds are always hot and even suffocating; they influence
the nervous system, afflicting some people with neuralgic troubles.
When these winds blow, the air is charged with electricity, until, the
tension of the atmosphere having grown insupportable, a tempest comes to
restore the equilibrium, to give place to another wind, coming from the
south-west, and known as the _pampero_. This wind does not often last
long, but it attains a velocity equal to that of a full hurricane. The
_pampero_, so called because it is formed in the region of the pampas,
is a wind full of ozone, and as such plays its part in disinfecting the
vitiated air of the urban centres. But the effects of the _pampero_, and
especially of the south-westerly winds, on the Rio de la Plata, where
they produce a violent swell, are sometimes terrible.

As for the rain, there is no regularity in its fall; which naturally
tends to render the results of culture and of cattle-breeding variable.
Rains are more frequent in summer and autumn than at other times; while
the least rainfall is that of winter. At Buenos Ayres it is rare for a
month to pass without rain, which is often torrential, and accompanied by

The climate of the central region, if we except the mountainous portions
of the Provinces of San Luis and Córdoba, is distinguished from the
seaboard region by its greater dryness and its sudden variations of
temperature. In the plain the summers are very hot, and it is not
uncommon to see the thermometer at 104°; while during the winter there
are very hard frosts. As on the coast, northerly and southerly winds are
the most frequent. Rain is rarer than on the coast, and falls almost
exclusively in summer and in autumn: with rare exceptions the winter is
perfectly dry.

In the Andean region the climate varies according to the height above
sea-level, but is always characterised by sudden variations in the daily
temperature, and by excessive dryness. On the eastern slope of the
Andes and the plateaux of the north it never rains. These regions are
continually swept by furious winds, which make agriculture impossible.
To the intense heat of the day succeeds the cold of the night, with
differences of temperature that sometimes amount to 68° in twenty-four

The climate of the Argentine, with a few exceptions, has the reputation
of being extremely healthy, on account of the sudden changes of
temperature and the dryness of the air predominant over the greater
part of the country. These atmospheric conditions are, to be sure,
not favourable to affections of the lungs; but, on the other hand,
they contribute to prevent epidemics. We find that among adults and
adolescents the figures of mortality are no higher than the average
figures for the healthiest countries in the world. The statistics drawn
up by the City of Buenos Ayres even show that foreigners have a longer
expectation of life than the indigenous population.

In matters of climate one must be careful not to become confused, as so
many Europeans do, between our Argentine Republic and the neighbouring
country of Brazil, which is nearer the equatorial zone. Favourable
to human health, the Argentine climate is also, as we shall see,
particularly favourable to most kinds of agriculture and to the breeding
of cattle; from this point of view it is a privileged land, which calls
only for labour to become productive.

For a greater part of its area the Argentine soil unites the geological
and climatic conditions favourable to the production of cereals and for
stock-raising. It is in the fertility of the cultivated lands and the
richness of the pastures that the whole economic value of the country

According to recent investigations by competent persons, the surface of
the Argentine is largely composed of sandy soil; but a sandy loam is
often found, also, more rarely, a gravelly clay; but there is very little
actual clay. Other soils, such as absorbent calcareous earth, are not
often found. In the subsoil a sandy clay abounds, the occurrence of clay
and calcareous earths being greater in the subsoil than in the soil.

From the chemical point of view, the high percentage of potash——which
remains practically undiminished——long ago attracted the attention of the
agronomist. Phosphoric acid is also found, though in less proportions.
Lime is often found in small quantities in the best soils in those
districts most devoted to agriculture; and nitrogen is often abundant,
except in the southern region of the Republic, and in some parts of the
western region, where the rains are less frequent, the winds violent,
and the vegetation poor and stunted.

Saltish soils are of frequent occurrence in the west and south, but in
general the salt is not in sufficient proportions to hinder agriculture,
especially when suitable means of culture are employed.

Soils of great fertility are found in the central and southern regions,
and occupy vast areas in the Provinces of Buenos Ayres and Santa Fé, and
in parts of Córdoba and Entre Rios. “There are areas which are apparently
of poor fertility,” says M. Charles Girola, from whom we derive these
data, “which yield magnificent crops, thanks to irrigation or a better
distribution of the water supply; especially in the west and the

[Footnote 16: _Investigación agricola en la República Argentina_, by
Charles Girola, Agronomic Engineer, Head of the Agronomic Bureau in the
Ministry of Agriculture. (1904).]

But in the Argentine Republic experience has shown that there is scarcely
any soil which is not capable of profitable use, either for agriculture
or stock-raising. It is very frequently remarked that lands which for
a long time had been regarded as poor and almost sterile, unfit for
exploitation, are to-day converted into admirable natural or artificial
prairies, feeding numerous herds of sheep or cattle; or have more often
been cleared by the colonist, and are now yielding excellent crops.
This wonderful transformation is chiefly due to the pasturing of flocks
and herds, which break up and enrich the soil; also to the fertilising
organic matter contained in the turf; and finally to the addition of
innumerable dead insects, which are brought by the wind and form a
deposit on the soil, which acts as a kind of natural manure.

These favourable conditions of fertility are all united in the region
known as the _Pampa_, which occupies the greater part of the temperate
zone of the country. It consists of immense and virgin plains, which
stretch to the horizon almost without landmarks or changes of level, and
offer admirable opportunities both for agriculture and stock-raising.

Nearly all those Argentine lands which to-day bring fabulous prices were
referred to, at an earlier period, as “lands good for nothing.” For this
reason a considerable premium should be put on the theoretical estimate,
made _a priori_, of the areas suitable for advantageous cultivation, in
proportion as human labour works its transformation.

It is difficult to estimate, except in the most approximate manner, the
cultivable area of the Argentine. It should be not less than half the
total area, or, in round figures, 370 millions of acres. Of this estimate
at least two-thirds represents land suitable for stock-raising, leaving
available for the production of cereals about 122 millions of acres; of
which, at the present time, only a fifth part is under cultivation. We
may see, by this simple comparison between the future and the present,
that agriculture has still a great future before it and a large margin of

To give a true idea of this power of production, it is enough to recall,
with M. Emile Daireaux, who has described the great farms of the
Argentine pampa, that the plough, under the most favourable of climates,
meets no obstacles in the way of hills or forests; not a tree, not a
rock, not even a pebble in the soil. All European crops give there an
abundant harvest, without expenditure upon manure, without shelter for
the stock; the colonist may even content himself with a modest wattled
hut, protecting him from the mid-day sun or the cold breeze of the night.
The soil is everywhere friable; no painful struggles retard the speed of
the plough, which traces at one stretch a furrow miles in length without
turning the ploughshare. The plough is drawn by four horses, reared at
hazard in the open air, knowing no grooming, no complicated training; and
sometimes a single hand is able to manage two teams and ploughs.

Thanks to the frequentation of these lands for centuries by horses
and cattle, these alluvial deposits, rich in natural manures, have an
apparently inexhaustible fertility. Awakened by labour from its eternal
sleep, the soil is so vigorous that one finds numerous instances where
the same grain, sown for twenty successive years in the same place,
yields always the same abundant harvest.

The only serious scourge which can menace the creative power of the
earth, independently of the always to be dreaded drought, is the invasion
of locusts.

These invasions take the form of flying armies of locusts passing between
earth and sky, and revealing their passage by the semi-darkness they
produce in the regions over which they travel. Leaving the hot deserts of
the tropical regions, the locusts advance in their phalanxes, sometimes
50 or 60 miles across; swarm succeeds swarm uninterruptedly for several
days, leaving behind them no trace of vegetation. They till the wells,
stop the trains, by opposing veritable barriers of their bodies, obstruct
the rivers in which they drown, and sometimes even, by the accumulation
of their bodies, form a bridge over which the rear-guard can pass.

Serious though this danger may be, especially in the more exposed
provinces, such as Santa Fé, we must say, in honour to the Argentine
Republic, that it has never paralysed initiative; as is proved by the
continuous increase in the area of sown soil. Very fortunately, too, this
plague, like that of Egypt’s in Pharaoh’s dream, is intermittent, and an
interval of seven years often passes before its return. Moreover, various
means are being put into practice for defence against this formidable
evil; means for preventing the reproduction of the insect, or of checking
its development before the period of flight.

A special organisation has been formed under the name of the “Commission
of Agricultural Defence,” in order to coordinate and direct the work of
protection from the devastations of the locust, and considerable sums are
devoted to this object every year. Regiments, mobilised along the line
of passage, sweep the agglomerated masses of insects, in dense ridges,
towards the ditches full of quicklime in which they are buried. Hundreds
of tons of locusts perish thus, but unhappily the plague seems neither
cured nor diminished.[17]

[Footnote 17: See _Le Correspondent_ of the 10th of February, 1905,
containing an article by M. Emile Daireaux.]


The economic progress of the Argentine Republic is intimately connected
with the development of its means of communication, its traffic-ways.
The railways and the ports have been the chief factors of the country’s
prosperity, as by facilitating the outlet of agricultural products, they
have allowed the soil to attain its whole value.[18] It is therefore
pertinent to state, in some detail, how the Argentine is equipped
from this point of view, and the part played by such equipment in the
commercial development of the country.

[Footnote 18: Perhaps it need hardly be explained that the meaning of
this statement is that the rent of agricultural land reaches its par
value when it is absolutely accessible——say, beside a port. With high
ocean freights and low railway freights any land upon a railroad would be
almost equally accessible economically——that is, it would reach almost
its whole value.——[TRANS.]]

By the truly providential nature of its soil, the Argentine is not
only marvellously fertile, but is also a country largely opened up by
waterways, and offering exceptional facilities from the point of view of
international exchange.

One of the most notable peculiarities of this country is that its rivers,
which are, as it were, inland seas, accessible to vessels of the highest
tonnage, and, penetrating the very heart of the most fertile regions,
place it directly in communication with the exterior. What is still more
notable is that these rivers flow with an almost constant current over
level beds, between perpendicular banks, so that the river-banks form a
series of natural ports, with wharves of indefinite length. Nature has
well prepared the way for the handiwork of man.

The hydrographic system of the Argentine Republic falls into three main
groups: (1) the rivers tributary to the basin of the Rio de la Plata;
(2) the rivers which terminate their course in lakes or pools, or lose
themselves in forming marshes or salt swamps, and are finally absorbed by
the porous soil of the Pampa; (3) the rivers which empty themselves into
the ocean.

To the first group belong all the rivers which water the Provinces of
Corrientès, Entre Rios, Chaco, Jujuy, and Salta, a portion of those
of Santa Fé, Córdoba, and Buenos Ayres, and the Territories of Chaco
and Misionès. To the second group belong all the water-courses of the
Provinces of Tucuman, Catamarca, Santiago de l’Estero, La Rioja, San
Juan, Mendoza, San Luis, the greater part of those of Córdoba, and part
of those of Buenos Ayres. To the third group belong also a portion of
the rivers of Buenos Ayres, and all the rivers of Patagonia. As we have
seen, the waterways of the Province of Buenos Ayres come under all three

The best-known river of the Republic, and that which gives the Argentine
its name, is the Rio de la Plata, formed by the junction of two rivers no
less important, the Parana and the Uruguay. It forms an immense estuary,
which pours into the ocean the waters of a whole hydrographic system, a
vast basin occupying nearly 1,540,000 square miles, or a fourth part of
South America. This estuary is 25 miles wide at its head, and where its
waters reach the ocean attains a width of no less than 217 miles, its
average width being 111 miles; and its superficial area covers 13,475
square miles.

Apart from certain hindrances of the nature of islands or sandbanks, the
Rio de la Plata offers relatively easy access to vessels of the highest
tonnage making for Buenos Ayres or towards the interior. Its level is
influenced by the tides of the ocean, and also suffers very violent
changes when the easterly or south-easterly winds pile up the waters of
the sea in the estuary.

The river which is the continuation of the Rio de la Plata towards the
north, and with it forms the vital artery of the Argentine, is the
Parana; its length is 2980 miles, of which about one-half flows through
Argentine territory. Its width varies from 22 to 31 miles, and its
average annual flow is estimated at nearly 39,000 cubic yards per second,
which represents one and a half times that of the Mississippi, twice that
of the Ganges, four times that of the Danube, five times that of the
Nile, and nearly a hundred times that of the Seine. It receives, in its
turn, as an affluent, the Paraguay, a river which traverses the country
of the same name, and thus places it in communication with the sea, by
way of the Parana and the Rio de la Plata.

This network of rivers forms a magnificent series of waterways. Rising
from the central provinces of Brazil, the Parana passes through the
rich afforested regions of Chaco, communicates by means of its affluent
with Paraguay and South Brazil, and then flows through the Provinces of
Corrientès, Entre Rios, and Santa Fé; that is, through the regions of
great forests and wide holdings, and then empties itself into the inland
sea of the Rio de la Plata, where it mingles with the Uruguay, another
means of communication between the Provinces of the East and the Atlantic

Concerning its navigability, here are some data taken from an interesting
little book by M. Georges Hersent on the port of Rosario:——

“During nine months of the year the navigation from the sea to the port
of Rosario presents no difficulties to the great transatlantic steamers;
indeed, it may be said that their maximum draught is limited only by
the depth of the ‘Canal Nuevo,’ the new channel of Martin Garcia. Ships
drawing 22 to 23 feet can load at Rosario and leave directly for the open
sea, or come to discharge their cargo at the port.

“During the period of low water, which lasts for barely three months
in the year——from September to the end of December——there are only two
channels with a less depth than 21 feet, that of Las Hermanas and that
of Paraguayo. In the former, the island of Las Hermanas separates the
bed of the river into two channels, of which the one most in general use
hitherto has a depth of only 20 feet; but vessels may avoid it to-day, as
the western channel has been dredged and deepened, and is of more than
sufficient depth.

“The second channel, which used to present some difficulty, is that
of the Paraguayo, where there was only 17 feet of water. This state
of things was happily not permanent, as the National Government has
undertaken, at this spot, the work of deepening and levelling the Parana,
which was completed in the course of the year 1904.

“We may add that the State is engaged in maintaining, over a minimum
width of 108 yards, a depth of 19 feet below the level of low water
in the channel of Martin Garcia, and of 21 feet 1-1/2 inches over the
whole course of the Parana, as far as Rosario. This maintenance will be
necessary only at certain points in the river, as the depth of the latter
is in general considerably above those figures.”

As we have already said, the real commercial value of the Parana lies
in the peculiarity of its banks, which make it along its whole course a
series of natural quays. These banks form in many places almost vertical
walls, and as the bed of the river is almost everywhere 25 feet below
the surface, it follows that ships of large tonnage can not only ascend
the river as far as the city of Rosario, or even to Colastiné, but can
moor themselves alongside the banks as to a quay, without any labour or
preparation being necessary.

At some places——as at Rosario for example——the bank properly so-called
is overhung by low cliffs, forming a kind of promontory raised many feet
above the water-level, so that it is possible to utilise this difference
of level in loading cargoes. By means of inclined planes or gangways,
called _canaletas_, the goods collected in warehouses built upon the
banks are quickly, thanks to the slope of the gangways, run into the
holds of the vessels moored to the banks. It will be admitted that these
conditions are unusually favourable to navigation, and explain the
extraordinary development of a country in which nature has thus surpassed

Regarded as traffic-ways, these rivers play a part of the highest
importance, by giving easy access to the sea, without re-shipment, to
provinces more than 600 miles inland, such as those, for instance, of
Chaco and Corrientès.

The Rio de la Plata affords a natural traffic-way, accessible to all
vessels, between Buenos Ayres and Montevideo, which are more than 120
miles apart. All the large transatlantic steamers which used some time
ago to put in at La Plata now come up to Buenos Ayres, which has thus
become the headquarters of a dozen wealthy steamer-lines engaged in the
European service.

Thanks to the works established for the deepening of the Parana and the
regularising of its course through the sandy districts, great steamers of
10,000 tons can to-day go up to Rosario: steamers of 6000 tons can easily
reach Parana or Colastiné; and special boats built for the river service
can ascend as far as Corrientès, and from there towards Brazil, Paraguay,
or Uruguay: a distance of more than 1200 miles.

Besides these “flowing roads,” we must mention others, which, although
of less importance, are none the less destined to exercise a beneficent
influence over the economic life of the premier province, and the
development of its agriculture, thanks to the cheap transit which they
will offer in time to come. We refer to the network of canals which the
Government of the Province of Buenos Ayres has projected or put in hand.

In the first edition of this book we announced the construction of a
canal 155 miles in length, which would unite the Mar Chiquita, its
point of origin, and Baradero, its terminus; embracing in its course
the following centres of rural produce; Laforcade, Junin, O’Higgins,
Chacabuco, Salto, Arrecifes, and Baradero. This enterprise, which was put
in hand at the expense of the Province of Buenos Ayres, failed with a
crash. After the work had been enthusiastically commenced, after several
millions of dollars had already been spent, it was discovered that the
work could never be completed in a successful manner, nor could it ever
yield a return for the sums raised, which were thus swallowed up in this
disastrous enterprise.

Men whose technical competence allowed them to speak with authority——for
instance, the engineer, Luis A. Huergo——basing their statements on
scientific principles, had estimated that the undertaking could never be
practically realised; and, as we have seen, the result justified their

                           PORTS AND HARBOURS

The nature of the river-banks being such as we have described, the ports
utilised by trade along the course of the great Argentine rivers are very

After La Plata and Buenos Ayres, which share the traffic of the northern
part of the Province of Buenos Ayres, we must mention Campana and
Zarate, for at these two ports also the exports of frozen meat are very
considerable; San Nicolas, a great centre for cereals, whose harbour is
to be transformed and equipped by the new concessionnaire, the “Société
Anonyme du Port et Entrepôt de San Nicolas”; and Villa Constitución,
whence the produce of the south of Santa Fé and Córdoba is exported, and
whose capacity is 7000 to 8000 sacks a day.

After Rosario, which is the second centre of the Republic, the chief
ports ascending the Parana are as follows: San Lorenzo, Diamante, Santa
Fé, Colastiné, Parana, Esquina, Goya, Bella Vista, and Empedrado.
Corrientès is the last important commercial centre on the banks of the

All these ports had an annual tonnage amounting to 2,188,000 tons in
1906, 2,366,000 in 1907, and 5,396,000 in 1908, so that the statistics
for these three years of the traffic for the Parana, including Rosario,
amounts in round figures to 9,891,000 tons, for the distance of 804 miles.

At Santa Fé work has been commenced on the installation o£ a more modern
harbour; the Province, by consent of the State, has devoted a sum of
£6,000,000 to this undertaking. There has also at times been a question
of equipping the port of Colastiné, which is one of the principal centres
of export for cereals and the timber brought by the French railway system
of Santa Fé. The average trade passing through this port amounts to
more than 500,000 tons, and, so far, there has been no need to add any
improvements to the natural advantages of the river-banks. We see by this
that there is no need to create ports on the Parana, only to utilise or
develop existing conditions.

We give below a table of the trade statistics of the principal ports of
the Argentine Republic, remembering that with the exception of Buenos
Ayres their trade consists largely of the exports of produce:——

              _Traffic in Registered Tons at the following
                   ports in the years 1907 and 1908._

                              1907            1908

  Rio Gallegos[19]           63,500          41,000
  Madryn[19]                118,000          19,900
  Commodore Rivadavia[19]    59,000           1,990
  Ushuaia[19]                25,000          11,800
  Diamante                  131,000         375,000
  Santa Fé                  127,000         440,000
  Parana                    253,000         636,000
  Esquina                   117,000         374,000
  Goya                      163,000         404,000
  Bella Vista               136,000         399,000
  Empedrado                 116,000         306,136
  Corrientès                230,000         504,433
  Rosario                 1,089,000       1,924,000
  Buenos Ayres            6,471,000       7,555,000

[Footnote 19: The tonnage of these ports is for the years 1904 and 1906,
no corresponding figures being obtainable for 1907 and 1908.]

The premier port of the Argentine, and we might add of South America, is
Buenos Ayres, which in extent and connections rivals the finest ports of

It consists of two harbours, of which one, situated at the mouth of a
little river called Riachelo, is frequented principally by steamers of
light draught and sailing-ships; the other is known as the Port of the
Capital, or more commonly Port Madero, from the name of the contractor
responsible for the harbour works. The port contains, altogether, four
basins and 6-1/3 miles of quays, four of which are situated on the flank
of the city. Along these quays are disposed immense warehouses, able to
contain 29 millions of tons of merchandise, as well as great flour-mills
and grain-elevators, with a capacity of more than 200,000 tons, which
cost more than £1,000,000 sterling.[20]

[Footnote 20: The net capacity of the customs warehouses is over 400,000
tons; as products remain there on an average for two months, we have an
annual figure of 6 × 400,000 = 2,400,000 tons. This is the maximum of
goods per annum which the customs depôts can at present receive.]

This harbour has cost in all some £7,000,000, and every year a sum of
nearly 3 millions of paper piastres, or £200,000, is spent upon the work
of maintaining the channel of approach at a proper depth. At the season
when the traffic is densest, the port holds as many as 1400 steamers
and sailing-vessels, loading and unloading. It is evident that, with
the constant increase of commercial activity, further enlargements will
soon be necessary. The Government is at the present moment considering a
gigantic scheme of improvement, with a view to which several groups of
European contractors have already submitted estimates.

In order to give some idea of the importance of the plant at the disposal
of exporters at Buenos Ayres, we need only speak of the great market or
_embarcardero_ for live-stock. It covers an area of 350,000 square yards,
of which 117,000 are occupied by buildings; its capacity is 40,000 sheep
and more than 1500 cattle.

There is also another notable establishment, reputed to be the largest in
the world: the Central Produce Market. The building is of four stories,
covers an area of 180,000 square yards, and cost £830,000.

The following table shows the quantities, in metric tons, of products
entering the market between February and September in 1905, 1906, 1907
and 1908.

                           TONS OF 2205 lbs.

                    1905     1906     1907     1908

  Maize               721    6,882    9,600   10,742
  Wheat            34,246   50,379   73,245   47,566
  Flax              1,115    3,636    5,584   10,757
  Barley               83      368    1,361    1,695
  Oats              1,688    3,624    6,685   15,737
  Hides and skins  17,713   18,541   17,115   22,371
  Other products    1,786    1,838    1,804    2,155

Besides these products, in 1906 there were 87,400 tons of wool entered
at the market; in 1907, 84,600 tons; and during the first nine months of
1908, nearly 43,000 tons. If the year 1908 seems to show a great decrease
in the entry of wools, the fact is really due to the larger amounts
entered in October, November, and December, which are not included in the
figures for 1908.

These figures show the importance of this establishment to Argentine
trade. It is not a mere depôt, as one might suppose, but a veritable
Exchange, where important transactions take place in all the chief
products of the country.

The port of Buenos Ayres owes its rapid development to this excellent
equipment. In 1880, before the scheme of works was commenced, its trade
amounted scarcely to 660,000 tons; since then it has maintained a
constant increase, and now reaches the figure of more than 13,000,000

Below is the inward and outward trade of the port of Buenos Ayres:——

  Years.    Tonnage.

   1897     7,365,000
   1898     8,115,000
   1899     8,742,000
   1900     8,047,000
   1901     8,661,000
   1902     8,903,000
   1903    10,269,000
   1904    10,400,000
   1905    11,589,000
   1906    12,582,000
   1907    13,295,000
   1908    15,111,000

To appreciate the value of these figures, we must compare them with
those relating to the principal ports of the world, where we shall see
that Buenos Ayres occupies, in matters of tonnage, the twelfth place
among the ports of the world. The tonnage of Hamburg and Liverpool, which
occupy the first two places, is only about 40 per cent, greater than that
of Buenos Ayres.

The importance of the port of Buenos Ayres is chiefly due to the fact
that it handles nearly all the imports of the Republic——84 per cent, in
1908——while of exports it handles 51 per cent. This confirms what we have
already said of the absorption, by Buenos Ayres, of a great portion of
the vital forces of the country, which develops it disproportionately to
the rest of the country. The equipment of the new ports of Rosario, San
Nicolas, and Santa Fé, and the enlargement of the port of Bahia Blanca,
will constitute a useful task of decentralisation, favourable to the
economic future of the country.

La Plata has the advantage over Buenos Ayres of a deeper basin, which
renders its harbour accessible at all times to ships of the highest
tonnage. Until 1903 it was the point of call for the large transatlantic
liners outward or inward bound, which observed fixed hours of arrival and

The harbour of La Plata, 3 miles from the town, contains about 2700 yards
of quays and immense warehouses, capable of storing 600,000 sacks of
grain. It is the terminus of the lines of railway serving the richest
districts of the Province of Buenos Ayres, and is destined to undergo
further developments, as the provincial Government intends to connect it
with the agricultural centres by a network of light railways. This is the
principal port to-day for the exportation of the agricultural products of
the central Pampa.

On account of the economic importance of this port, the State has
taken it over from the provincial Government, in consideration of a
price of £2,360,000, with a view to nationalising it and exploiting
it for the benefit of the Argentine State. This measure will allow of
the organisation and the improvements which may be necessitated by the
increase of its traffic. On the other hand, there is constant talk of
connecting the port with that of Buenos Ayres by a canal some 29 miles
long, which would form an artificial extension of both harbours.

Rosario holds second place in the Argentine, both in the matter of
population and in the extent of its trade. It is the true agricultural
capital of the Republic, and the principal outlet of eight Provinces,
which use the Parana as their waterway. In his little book on the port of
Rosario, M. G. Hersent speaks of the advantages of its situation in the
following terms:——

“Situated in the very centre of an immense tract of country which is
extremely rich and fertile, which to-day furnishes more than half the
cereals exported by the whole Republic, Rosario is the necessary outlet
of the harvests of nearly the whole Province of Santa Fé of the whole
of Córdoba, and of a portion of Entre Rios; three provinces, whose area
is almost equal to that of France. It is the market for the sugars and
alcohols of Tucuman, the timber of Catamarca, and the minerals of Rioja
and Chaco, which are so far exploited only in a rudimentary fashion.

“In order to fulfil this economic need of vital importance to the
country, Rosario enjoys the most complete and efficacious means of
access and penetration. Five great railroads converge upon it, bringing
to it all the products of the interior, especially grain and cattle.
This network of lines, whose rapid creation has been one of the most
powerful factors of the development of Rosario, already contains more
than 2700 miles of permanent way; in 1899 the traffic in the Rosario
district already amounted to 3,400,000 tons of merchandise, consisting
chiefly of the produce of the soil. The extension of this railway system
is proceeded with in a more or less continuous manner, so as to increase
the value and the opening up of new countries. Very shortly the line to
Bolivia will have its terminus in Rosario.

“But that which gives this port, so well equipped, an incomparable
value, is the magnificent Parana, which, on the one hand, places it in
direct communication with the sea, and on the other unites it with the
interior by a waterway of several thousand miles in length, constituting
a means of transport as easy as it is economical, which brings it all the
water-borne traffic of the upper Parana and of the Paraguay.”

The statistics given above show the important place which this port has
taken in the last few years, and the continued increase of its traffic,
which to-day amounts to some 3,000,000 tons per annum, whereas in 1899 it
amounted only to 1,600,000 tons.

Hitherto these results have been obtained with a rudimentary equipment,
and by utilising the fortunate disposition of the river-banks; but the
intense pressure of traffic occurring at this point proves the necessity
of a large harbour, which would allow the products of the interior to
find their outlet towards the Parana and the sea. The need has given
birth to the means without waiting for modern improvements.

To-day the port of Rosario has entered upon a new phase, which may clear
the way for a still greater development. Its exploitation has been made
the object of a concession which, in 1902, was granted to a French
company, having at its head Messieurs Hersent & Son and the Creusot
works, on condition that the latter should undertake the equipment of
the port on modern lines. The scheme comprises, among other items,
the construction of over 2 miles of quays and a dock which will, with
the existing quays, give a total of 2-3/4 miles; the construction
of warehouses, the mechanical equipment of the quays, and also the
installation of a grain-elevator of large capacity, which will load a
cargo of 5000 cubic yards in four hours.

To-day this scheme is nearly realised, and Rosario will be able to meet
all the requirements of a perpetually increasing trade. The new railway
lines, which will soon reach the port, will complete its organisation.

As recompense, the Government has granted the concessionnaires, for
forty years, the monopoly of gathering all harbour dues over a radius
of 7·4 miles around the city of Rosario, and over a distance of 12·4
miles up-stream and down-stream. The State shares in the takings of the
concession to the extent of 50 per cent. of the net profits after the
expenses of exploitation are deducted, which are estimated at 40 per
cent. of the receipts, and after the subtraction of the sums necessary
for paying the interest on and redeeming the capital engaged.

From all these data concerning the ports of the Parana, it will be
seen that great efforts are now being made to increase the means of
communication in proportion to the economic expansion of the country,
and to multiply and facilitate outlets upon the points nearest to the
centres of production. These efforts are also tending to decentralise the
traffic, to the profit of a larger number of ports: in order to avoid
the over-crowding of a few great centres to the detriment of other parts
of the country. This policy will have happy results: firstly, from the
point of view of the export trade, since it will decrease the net cost of
transport; and secondly, from the standpoint of the import trade, as the
imports, instead of converging upon Buenos Ayres and thence proceeding by
rail, will reach the neighbourhood of the inland centres of consumption
more directly and at less expense.

For these same reasons serious improvements have been carried out at the
port of Bahia Blanca, which is situated on the sea-coast in the south
of the Province of Buenos Ayres, whose importance has increased more
especially since the opening of the military harbour to commerce. Bahia
Blanca is one of the termini of many railways of the south; it is thus
connected with the regions of agriculture and stock-raising on a large
scale, which are able to send their produce directly from this port to
Europe. The wool trade is particularly brisk there, and the cereal trade
also, since the Pampa has been transformed into a wonderful agricultural

Seconding this development, already stimulated by the Southern Railway
Company, which built the harbour known as “Ingenio White,” the Buenos
Ayres and Pacific Railway Company has also commenced at Bahia Blanca a
magnificent harbour, called Galvan Harbour. Built of reinforced cement,
it is equipped with powerful grain-elevators, built of stone, splendid
iron warehouses, sheds, etc. This harbour, when completed, will have
cost some £10,000,000; it has already a considerable trade, which will
increase in proportion to the agricultural development of the great belt
it is intended to serve, which includes the Provinces of San Juan, San
Luis, Mendoza, the Territory of the Central Pampa, and a large part of
the Province of Buenos Ayres. The importance of this harbour will also
be increased by the various railways which will unite Bahia Blanca to the
remote districts of the Republic. The French company, now building a line
running between Rosario and Bahia Blanca, will also have its own harbour,
the Puerto Belgrano, and is actively carrying on its construction.

Finally, the creation of a harbour has been projected at Mar del Plata,
the fashionable watering-place of the Argentine, and another in the Bay
of Samborombon, two hours from Buenos Ayres.

To sum up: the Argentine possesses at the present time, in the matter
of ports, an equipment capable of keeping pace with the growth of its
powers of production. Its rivers are truly arms of the sea, collecting on
their banks, thanks to their numerous ports, the products of the central
Provinces, which are thus connected with the Atlantic over a distance
of more than 600 miles. It is the same on the Atlantic sea-board, where
advantage has been taken of the least natural facilities afforded by the
coast-line to multiply the outlet to exportation, in proportion as the
progress of agriculture has travelled south.[21]

[Footnote 21: Among the principal ports of the south we may cite Madryn,
Rio Gallego, Commodoro Rivadavia, and Ushuaia, in Tierra del Fuego. These
ports, by a wise disposition of the Government, seeking to increase
the population and encourage progress in the southern regions of the
Republic, have been made free ports; that is all the operations of the
douane may be effected without the payment of fiscal dues.]

It is true that this great organisation can only yield the true measure
of its value in years of good harvests, since upon the latter all
commercial activity depends; yet it must be recognised that, however
largely the future has been discounted in equipping these ports, the
estimates of future traffic have scarcely ever hitherto been deceptive.

                               CHAPTER II


Rapid development of the railway system——Tabulation of its
    extension in each Province——Table showing the general results
    of its exploitation——List of the lines actually running.

List of railway companies, with the length of their roadways and
    their returns——The difficulty of obtaining exact figures——The
    tariffs of the railway companies——Form of concessions, and
    suppression of guarantees.

Comparison of the railway system of the Argentine with the railway
    systems of other countries——Proportion of mileage to area and

Extension of the system in the near future, owing to the numerous
    concessions granted——The mileage of these concessions——
    Insufficiency of plans and previous examinations——Examination
    of the most important concessions for which the capital is
    already guaranteed——The dimensions which the railway system
    will attain after the concessions are realised——Programme of
    narrow-gauge construction; its value.

Meeting of the Argentine with the Chilian railways crossing the
    range of the Andes——The aerial mining railway in the Province
    of La Rioja.

Railways in relation to agricultural development——Insufficiency of
    transport at the moment of harvest; its causes and remedies——
    Necessity of a better organisation which shall respond to the
    stress of production.

The same progressive spirit which the Argentine has manifested in
the improvement of inland or maritime waterways is to be seen in the
establishment of its network of railways. Here again development has been
rapid, and results plainly effectual in making the wealth of the country
available. To cite one example only, it is thanks to the railways that
agriculture and stock-raising have been able to attain to such large
dimensions in the Province of Buenos Ayres; a Province far less favoured
than its northern neighbours in the matter of waterways. All the lines
running south have greatly contributed to the transformation of the Pampa
and the increase of the cultivated area over an immense radius where
before there was nothing but untilled soil, which was hardly suited even
for stock-raising.

The railway has thus played a great part in civilising the Argentine;
raising new wealth from soil as yet unexploited, joining up the chief
agricultural centres, and affording them an outlet to the rivers
or the sea. The railway has also been auxiliary to the colonising
movement, stimulating the creation of new settlements along its track by
concessions of soil.

This latter work is not yet terminated, if we are to judge by the great
number of concessions now under consideration, in which the initiative
is due to the State or to private individuals. On the other hand, there
is a great tendency to build cheap narrow-gauge railways, in order to
save expense either in building or in working, so as to obtain a final
reduction of the freight tariff. In short, we find, in the case of
railways as well as in the case of waterways, that while the continuation
of good harvests is counted on, there is also an effort to keep up, by
multiplying the means of transport, with the economic expansion of the

It was in 1854 that the Government of the Province of Buenos Ayres
granted the first railway concession, for a line 24,000 _vares_[22] in
length, running west from Buenos Ayres. In 1857 a first section, some 6
miles long, was opened for traffic.

[Footnote 22: The _vare_ is equivalent to 886 millimetres, so the length
of the line was about 13 miles. At that period, in the region of the
concession, the _vare_ of land had only a trifling value.]

After these humble beginnings the railway system of the Argentine
developed with great rapidity; on the 1st of November 1908, its total
length was 13,700 miles, representing an average development of nearly
273 miles per annum. All the Provinces are represented in these figures,
but of course in very unequal proportions; as the opportunities of
construction have not been everywhere the same. Their installation has
gone hand in hand with agricultural development; and the Provinces most
adapted to agriculture have also been favoured with the most plentiful
means of transit, as the following table will show.

Among these Provinces we must note Buenos Ayres, Santa Fé and Córdoba
as the three which have made most agricultural progress; for they
alone furnish more than 80 per cent. of the total exports. Among the
Territories La Pampa has the greatest mileage of railways; a mileage
which will very shortly be doubled, to judge by the number of new lines
projected, which in the near future will cross it in every direction,
thus facilitating the outlet of its abundant produce.

It is in the last ten years that the network of Argentine railways has
reached its full expansion, as is shown by the second table; which also
gives the amounts of capital invested in these undertakings.

           _Mileage of Railways on the 1st of November 1908._

                            Column Headings:
                     A: Provinces and Territories.
                     B: Mileage.
                     C: Ratio of Mileage to Area.
                     D: In kilometres per 100 sq. kilometres.
                     E: In miles per 100 sq. miles.
                     F: Miles per 1000 inhabitants.

          A                              B       D       E       F
    Province of Buenos Ayres          4583·4   2·42    3·89    3·06
    Province of Santa Fé              2254·1   2·75    4·42    3·03
    Province of Córdoba               1857·1   1·86    3·00    3·66
    Province of Santiago do l’Estero   810·9   1·27    2·04    4·24
    Province of Entre Rios             610·5   1·32    2·12    1·58
    Territory of Pampa Centrale        556·9    ·61     ·98    9·15
    Province of Corrientès             451·9    ·86    1·38    1·42
    Province of Mendoza                410·0    ·54     ·72    2·25
    Province of Tucuman                384·3   2·68    4·31    1·41
    Province of La Rioja               319·2    ·57     ·92    3·77
    Province of San Luis               303·8    ·66    1·06    2·97
    Territory of Rio Negro             239·4    ·20     ·32   11·25
    Province of Salta                  228·0    ·23     ·37    1·63
    Province of Catamarca              226·3    ·30     ·48    2·15
    Province of Jujuy                  218·1    ·71    1·14    3·81
    Territory of Chaco                  97·2    ·11     ·17    4·54
    Province of San Juan                85·7    ·16     ·26     ·81
    Federal Capital                     55·3  47·90   77·12     ·05
    Territory of Chubut                 43·5    ·03     ·05    3·96
    Territory of Neuquen                 2·6    ·004    ·006    ·10
                                    ————————  ——————  ——————   ————
    Total and Averages              13,708·2    ·77    1·24    4·97

  _General Statistics of the Argentine Railways up to 1908 inclusive._

  Column Headings:
    A: YEAR.
    B: Total Mileage of Lines in Operation.
    C: Travellers Carried.
    D: Merchandise Carried (in tons).
    E: Gross Receipts.
    F: Total Expenditure.
    G: Net Profits.
    H: Capital Employed.
    I: Interest on Capital.

    A |   B  |    C     |    D     |    E     |    F     |    G     |    H      |  I
  1886|  3623| 6,458,674| 2,948,000|£3,231,793|£1,842,928|£1,388,865|£29,678,182|4·68
  1887|  4138| 8,199,051| 3,844,000| 3,903,317| 2,193,874| 1,709,443| 35,515,525|4·81
  1888|  4702|10,106,342| 4,410,000| 4,485,511| 2,501,160| 1,984,351| 39,429,794|5·03
  1889|  5071|11,103,986| 6,542,000| 3,916,766| 2,713,349| 1,203,417| 50,991,159|2·36
  1890|  5857|10,069,606| 5,420,000| 5,209,808| 3,517,081| 1,692,727| 64,368,563|2·63
  1891|  8746|10,820,003| 4,620,000| 4,192,320| 2,865,739| 1,326,581| 76,068,790|1·74
  1892|  8506|11,788,398| 6,037,000| 3,907,794| 2,341,532| 1,566,262| 88,389,466|1·77
  1893|  8602|12,843,404| 7,169,000| 4,364,243| 2,562,921| 1,801,322| 94,814,475|1·90
  1894|  8712|13,928,061| 8,143,000| 4,580,898| 2,616,386| 1,964,512| 96,575,886|2·03
  1895|  8766|14,573,037| 9,650,000| 5,278,861| 2,769,293| 2,509,568| 97,071,866|2·59
  1896|  8981|17,248,485|10,914,000| 6,230,273| 3,216,166| 3,034,107| 99,565,261|3·05
  1897|  9162|16,410,945| 8,981,000| 5,658,616| 3,311,680| 2,346,936|101,643,263|2·31
  1898|  9595|16,478,085| 9,429,110| 6,648,302| 3,820,624| 2,827,678|104,703,419|2·70
  1899|10,194|18,014,503|11,819,000| 8,261,291| 4,486,453| 3,774,838|105,323,332|3·58
  1900|10,286|18,296,422|12,659,000| 8,280,269| 4,746,551| 3,533,718|108,315,125|3·26
  1901|10,499|19,689,115|13,988,000| 8,773,217| 4,825,720| 3,947,497|107,667,700|3·67
  1902|10,790|19,815,439|14,030,000| 8,654,517| 5,995,089| 2,659,428|112,189,241|3·62
  1903|11,429|21,025,456|17,024,617|10,279,703| 5,248,045| 5,031,638|114,617,917|4·50
  1904|11,552|23,120,095|19,727,000|12,380,409| 6,542,222| 5,834,187|123,822,366|4·70
  1905|12,581|26,636,211|22,410,000|14,318,982| 7,879,218| 6,439,764|125,426,123|5·13
  1906|13,073|34,198,565|26,716,000|16,403,819| 9,749,739| 6,654,080|134,337,775|4·95
  1907|13,988|41,784,238|27,929,000|17,594,069|10,843,087| 6,750,982|157,875,089|4·27
  1908|14,994|47,150,384|32,211,000|20,279,560|12,407,320| 7,872,240|169,000,000|4·66

The number of railways at present in operation is thirty, this figure
including the railways and cable tramways or mechanical traction lines in
the country districts, both public and private, as in either case they
serve for the transport of produce. Of these thirty lines twenty-seven
are worked by private companies and three by the State. The latter are
lines of no great value, which the Government has itself constructed,
or which it has had to take over, either in the general interest or to
redeem their heavy guarantees.

In the matter of comfort the great Argentine railways leave nothing to
be desired, and many Europeans, out of touch with the rapid changes of
this progressive country, would certainly be much astonished to learn
that one may cross the Pampa or reach the foot-hills of the Andes in
trains equipped with sleeping-cars and restaurant-cars of the latest
type. Perhaps there is rather less ornament and fewer carpets than in the
European sleeping-cars, but the same cleanliness will be found, the same
service, the same conveniences.

The rolling-stock is also the object of incessant improvements. To give
only one example, the Southern Railways Company has placed in service a
new type of locomotive, with two pairs of double-expansion cylinders.
These engines have ten wheels, of which six are coupled and four mounted
in the front on bogies; their maximum power enables them to draw an
effective load of 2160 tons up an incline of 1 in 500. As for the goods
wagons, their capacity is 40 tons in the broad-gauge lines and 25 tons on
the narrow gauge.

According to statistics, on the 1st November 1908, the various railways
had in service 2992 locomotives, 2031 passenger-cars, and 33,800 goods
wagons or trucks.

The companies are enabled to import free of tariff, during the first ten
and sometimes the first twenty years of their tariff, all their fixed and
rolling stock; it is thus to their advantage to obtain from abroad the
most effective equipment, in order to obtain the greatest possible profit
from the governmental favour.

The table given below contains various data as to the various
concessions; it gives the gauge of the lines, their mileage, and the
profits of the principal companies.

         _Railways and Steam Tramways of the Argentine Republic
                      on the 1st of January 1909._

                         RAILWAYS IN OPERATION.

 (Length includes branch lines but not auxiliary lines or loop lines.)

                           I. STATE RAILWAYS.

                                         Gauge.        Mileage.   Interest on

  Andean                              1·676 metres        299        5·42%
                                      (5 ft. 6 in.)
  Central North                             ”            1066         ·80
  Northern Argentine                        ”             470         ·46


  Buenos Ayres, Southern              1·676 metres       2574        4·93
                                      (5 ft. 6 in.)
  Buenos Ayres, Western                     ”            1181        5·93
  Buenos Ayres and Rosario                  ”            1202        4·73
  Central Argentine                         ”            1141        8·31
  Buenos Ayres and Pacific                  ”            1013        3·83
  Argentine, Great Western                  ”             483        4·40
  Bahia Blanca and North-Western            ”             543        2·46
  North-Eastern Argentine             1·435 metres        194        1·19
                                      (4 ft. 8-1/2 in.)
  Entre Rios, Central                       ”             534        2·50
  Buenos Ayres, Central                     ”             135        3·33
  Province of Santa Fé                      ”            1054        3·0
  Central Córdoba (Northern Section)        ”             533        2·62
  Central Córdoba (Eastern Section)         ”             126        7·37
  Córdoba and Rosario                       ”             174        3·01
  North-Western Argentine                   ”             118        4·32
  Córdoba and North-Western                 ”              92         ·93
  Trans-Andean Argentine                    ”             105  (loss) ·63
  Chubut, Central                           ”              42        5·95

   _Railways of the Second Class, Steam Tramways, Cable Lines, etc._

                         I. FOR PUBLIC SERVICE.

                                     Gauge.       Mileage.   Interest on

  Steam Tramway, Rafaela             1 metre        53·40      ·79%
                                  (3 ft. 3·4 in.)

  Malagueno (connecting with the
      Central Argentine)                ——            ——        ——

  Municipal Tramway of the La        1·435 metres   14·30      ·36
      Plata Abattoirs             (4 ft. 8-1/2 in.)

  Ocampo Colony                      1 metre        21·11       ——
                                  (3 ft. 3-1/4 in.)

  Florencia to Piracus               1·067 metres   12·42       ——
                                  (3 ft. 6 in.)

  Railways of the Entreprise         1·676 metres    4·97     3·38
      de Las Catalinas            (5 ft. 6 in.)

  Barranqueras to Resistencia        ·75 metres     16·76     3·40
                                  (2 ft. 5·3 in.)
                                        Total,     122·96

                              II. PRIVATE.

                                     Gauge.       Mileage.   Interest on

  Tyrol Harbour to Lucinda Colony    ·6 metres      22·36       ——
                                  (23·6 in.)

  Steam Tramway from Piragnacito     ·75 metres     53·40       ——
      to Guillermina              (2 ft. 5·5 in.)

  Colony of Las Palmas               ·6 metres      29·20       ——
                                  (23·6 in.)

  Valdez Peninsula                   ·76 metres     19·87      ·58
                                  (2 ft. 5·9 in.)
                                        Total,     124·83


    I. State railways                                1765
   II. Private railways (concessions)              11,245
  III. Railways of the second class and steam
         A. Public                                    119
         B. Private                                   121
  General total, mileage of lines in operation     13,250
  General total on September 1st                   14,994

These lines are of very unequal value from the shareholders’ point
of view; but it must be recognised that the majority, after various
vicissitudes, have of late years shown an increase of revenue that proves
their vitality. We may cite, as example, one of the Southern lines, such
as that running to Bahia Blanca _via_ Tornquist; a line built almost at
a loss by the Southern Railway Company of Buenos Ayres, but which to-day
is yielding over 4 per cent., thanks to the agricultural development
which has followed its course. According to figures of reliable origin,
the traffic of this line between the stations of General La Madrid and
Bahia Blanca, has increased from 63,580 tons in 1888 to 458,750 tons in
1908, or an increase of 620 per cent, in twenty years, and even so these
figures do not include the through-goods traffic between these points.

Generally speaking, we may say that the revenues of the Argentine
railways more often than otherwise exceed expectation, even in the case
of new lines. On the other hand, it is difficult to reduce the expenses
of working, on account of the special conditions of the traffic, which
is only heavy at the time of harvest, instead of being distributed
throughout the year.

We must warn the reader that the summary just given is of only
approximate value. To avoid wounding the susceptibilities of the State,
or in order not to justify demands on the part of the State for lower
tariffs, certain of the railroad companies publish far lower profits than
they really make, by means of transforming a portion of their profits
to the reserve or redemption accounts. With the same object, they sink
considerable sums in land purchase or in permanent-construction work.

Other companies, on the contrary, hoping that the State will eventually
take over certain of their lines, seek to augment their returns
temporarily, in order to obtain a better sale price.

We may safely say, however, the administrative methods of the greater
companies being what they are, that on the whole the average revenues are
above rather than below the figures we have given. Accounts are conducted
on a basis of very cautious evaluation, in order to lessen the shock of a
bad harvest.

As for the tariffs of the various companies, they are still very high, as
always happens when there is no competition.

Here are some of the prices of freight per ton, according to the articles
and the distance they are carried:[23]

[Footnote 23: The Argentine “tonne” weighs 35 lbs. less than the English
ton being 1000 kilogrammes, or 2205 lbs. in weight.]

                      Up to 50 kilometres       300 kilometres or       700 kilometres or
                         or 30 miles.               180 miles.              421 miles.

  Wheat           4s. 9·4d. to  5s. 6·5d.   10s. 11d. to 14s. 9·6d.   14s. 9d. to 17s. 2d.
  Wool in bale    5s.   8d. to 12s.   9d.   26s.  3d. to 39s.  11d.   39s. 2d. to 58s. 1d.
  Wool in sacks  14s.  11d. to 18s. 3·6d.   47s.  6d. to 58s.   9d.   72s. 3d. to 93s. 3d.

A factor that makes these freights seem even higher is a comparison with
the maritime freights, which fell in 1908 to a very low figure. The
transport of a ton of cereals to a port of embarkation 3000 miles distant
would cost a farmer four or five times as much as the freight from that
port to Europe.

In a country like the Argentine, presenting an immense level surface
to the eye, which can hardly distinguish the slightest landmark or
difference of level, it would seem as though the building of railways
should have been particularly inexpensive, especially as for ten to
twenty years all materials could be imported free of duty. As a matter
of fact, however, the cost of construction has been very high in the
case of certain lines; either on account of the land speculation which
has followed their establishment, or because the estimates were exceeded
having been established without any serious control on the part of the
State. This explains how it is that these companies, having an enormous
capital to redeem, cannot at the present moment lower their rates.

In the Argentine the railway companies are not established as in France,
by right of a concession limited to a certain number of years.[24] The
concession is granted without conditions, excepting the reserve that it
may be redeemed by the State; and this reserve may be applied at any
time whatever, conformably with the expropriation law. The conditions of
redemption are in most cases established on the basis of the revenues of
the last five years, increased by 20 per cent., so that the clause can
scarcely be carried into effect to the profit of the State in the case of
lines yielding good profits.

[Footnote 24: A clause fixing the term of the concession——that is, the
date upon which the line, with all its buildings, etc., will pass into
the hands of the Government without any payment on the part of the
latter, was inserted in the case of two railways only, and for a term of
fifty-five years. These two lines are the railway from Villa Mercedes to
La Toma (the old North-Western Argentine), to-day a section of the Andean
National, and that from San Cristobal to Tucuman, to-day the Southern
Section of the Central Northern. Both are guaranteed by the nation; but
the nation having become the proprietor, the above clause has of course
not taken effect.]

The State and the Provinces have guaranteed dividends in various ways.
These guarantees were granted very liberally when the Argentine was
seeking to create and develop its railway system, but the Governments
have not shown the same readiness to honour their signatures in times of
crisis. We shall see in the financial section of this book that the State
has had to contract loans in order to redeem its obligations, and to
liberate itself from engagements it had been unable to keep.[25]

[Footnote 25: The French company of the Santa Fé Railways, which had a
guarantee from the Province, which guarantee was never paid, obtained in
exchange, by arrangement, the complete ownership of its lines.]

At present the Government no longer gives guarantees——not even to
encourage the construction of lines in regions which offer little
attraction from the point of view of traffic. It prefers to build them
itself, in order to increase the extent if not the value, of the systems
it already owns; or has recourse to companies or private individuals for
the construction of new lines, but without guarantees of any sort.

Having given these details of the railway system, we have still to
consider of what expansion it is still capable. In comparison to other
American States——excepting the United States, whose colossal progress
in this department permits no comparison with other countries——the
Argentine is in the first rank in the matter of its railway mileage.
With its 13,250 miles in operation on 1st January 1909, it surpasses
both Mexico (with 8390 miles) and Brazil (with 10,080), the two American
States which, being the wealthiest and having the largest populations,
possess very extensive railway systems. If from the same standpoint we
then compare the Argentine with France, Italy, Spain, Belgium, England,
Germany, and Austria-Hungary, we find that it occupies the fourth rank.
But it goes without saying that these figures do not mean anything very
precise, except in conjunction with those denoting the area and the
population of the Argentine. They are indications rather than exact

If we compare the number of miles of railway in operation to that of
the area in square miles of each country, we shall find that among
the nations of South America the first place is no longer held by the
Argentine, but by the little Eastern Republic of Uruguay, for in the
former country the ratio is only 1.25, while in the second it is 1.67,
Mexico ties with the Argentine, with 1.25. Here is an example of the
strange conclusions to which statistical inquiry sometimes leads us,
since it follows from the preceding figures that Uruguay, with only 1207
miles of railway, and 71,990 square miles of territory, holds apparently,
from this standpoint, a higher rank than the Argentine.

The comparison of the mileage of the railways of each country to the
number of its inhabitants is an exacter method. We find that for every
10,000 inhabitants the Argentine has 23.59 miles of railway, while Brazil
has only 6.49, Uruguay 10.96, Chili 3.98, Mexico 7.12, and Venezuela 3

All this is explained in the following table, whence interesting
deductions may be drawn.

The mileage of railway given for the Argentine should be regarded as
provisional, for, unlike those European nations which have almost
attained their uttermost expansion and equipment, there is still much
to be done in the Argentine before the whole of its territory can be
served. Certainly the principal lines are already constructed, but others
will assuredly be built, which, apart from their immediate utility, will
ultimately pay, owing to the manner in which they will increase the value
of the soil which they will traverse.

The constant expansion of its network of railways is for that matter a
necessity to the Argentine, as for all new countries, in which there
are no roads fit for wheeled traffic. Rather than go to the expense of
opening up such roads, which would be an unproductive investment, the
Government prefers to favour the creation of lines of railroad which may
in time become instruments of production.

              _Mileage of Railways in the Argentine Republic
                   as compared with other Countries._

  Column Headings:
    B: Area in Square Miles.
    C: Total Number of Inhabitants.
    D: Mileage of Railways in Operation.
    E: Mileage of Railways.
    F: Per 100 Square Miles.
    G: Per 10,000 Inhabitants.

                    |         |          |             |      E
           A        |    B    |     C    |      D      |------------
                    |         |          |             |   F  |  G
  Argentine Republic|1,080,460| 5,792,807|1908   13,740| 1·268|23·73
  Brazil            |3,283,360|16,000,000|1904   10,390|  ·315| 6·49
  Uruguay           |   71,960| 1,103,040|1904    1,207| 1·674|10·97
  Chili             |  294,800| 3,399,928|1903    1,354|  ·464| 3·98
  Peru              |  681,370| 4,539,550|1904    1,184|  ·232| 2·59
  Mexico            |  749,070|13,607,259|1903    9,698| 1·263| 7·12
  Venezuela         |  362,780| 2,619,218|1903      523|  ·143| 1·99
  Bolivia           |  482,240| 2,180,710|1903      701|  ·148| 3·20
  Columbia          |  437,180| 4,501,000|1901      410|  ·093|  ·91
  United States     |3,726,960|91,794,102|1904  213,770| 5·882|23·28
  France            |  206,540|39,961,945|1904   27,365|13·735| 7·12
  Italy             |  104,060|33,640,710|1903   10,016| 9·058| 2·97
  Spain             |  194,250|19,027,855|1904    8,601| 4·219| 4·51
  Belgium           |   11,330| 7,238,622|1905    2,853|25·116| 3·94
  England           |  121,020|44,587,106|1906   23,048|19·009| 5·17
  Germany           |  208,180|60,641,278|1905   34,103|16·349| 5·62
  Austria-Hungary   |  242,820|49,931,906|1905   24,288|10·074| 4·87

It is true, as we stated in the first edition of this book, that numerous
demands for concessions permitting new lines to be built have been
presented to and granted by the National Congress. But it is also true
that only a very small number of these projects have been realised, as
many of these undertakings were unable to find the capital necessary to
flotation in the foreign markets; this has been true particularly of the
English market.

At the same time, there are among these concessions a few projects which
seem to be capable of immediate realisation; these are concessions
granted to already existing companies, for the extension of their
systems, which have the necessary capital at their disposal.

Among new lines in active construction we must cite that for which the
concession was granted to MM. de Bruyn and Otamendi: a narrow-gauge
railway in the Province of Buenos Ayres. This concession has been taken
over by a French company, and may require a maximum capital of £8,000,000.

This undertaking, which is really the extension into the Province of
Buenos Ayres of the network of narrow-gauge lines, exploited by the
French company of the Santa Fé Railroads, includes several long lines
starting from Rosario, crossing the most productive and thickly-peopled
regions of the West, and terminating at the three great centres of
export: Buenos Ayres, Bahia Blanca, and La Plata.

This undertaking, which has been well thought out by its promoter and
present director, the engineer Girodias, is based upon two ideas; one
being to build cross lines connecting the principal railways of the
south and the west in agricultural districts where these two lines
hold an absolute monopoly; the other is to extend to Buenos Ayres the
narrow-gauge system of the north and north-west. This system consists at
present of 3444 miles of railways, having their terminus at Rosario; it
is therefore most desirable that these lines should be prolonged towards
the south, and especially as far as the capital, in order to avoid
troublesome transhipments. This will be a great advantage, for example,
to the sugar-growing districts of Tucuman.

At the present moment, this new narrow-gauge system is already working
from Rosario to Buenos Ayres, the equipment being excellent, and westward
as far as Nuevo de Julio. The first results have confirmed the forecasts
as to the development of traffic in this region.

Another concession for a line on the same basis is that obtained by Mr
Duncan Munroe, for the establishment of a narrow-gauge railway between
Rosario and Buenos Ayres, to be a prolongation of the “Central Córdoba”,
of which he is the Director. This scheme, thanks to the support given
by the “Central Córdoba and the Córdoba and Rosario,” has been put into
execution, and is on the eve of being opened to the public.

The proposal to unite Rosario and Bahia Blanca——the two chief Argentine
ports——by a line crossing the Province of Buenos Ayres in its most
fertile region, is also on the way to completion. The construction of
this line is being actively pushed, so that it is hoped that the line may
be open for service in the course of 1910.

This important line is being built by French capital, the executive being
known as the Rosario and Puerto Belgrano Railways Company.

The National Congress has also granted to existing companies, which can
offer all requisite guarantees, the authorisation to construct new branch
lines, which will attain a total length of 3370 miles, and will absorb
a capital of £25,000,000. Of this total, 797 miles will be built by the
Western Railways Company, 874 by the Southern Railway Company, 328 by
the Pacific Company, 192 by the Central Córdoba, 427 by the Rosario and
Puerto Belgrano Railway, 190 by the Province of Buenos Ayres Railways, 87
by the French Company of the Province of Santa Fé Railways, and 476 by
the Central Argentine Railway.

Apart from the capital of companies already established in the Argentine,
one may already detect a new stream of foreign capital destined to build
new railways. It is announced, indeed, that a new railway system, 223
miles in length, will shortly be built in Entre Rios by German capital,
which has hitherto been shy of this kind of undertaking.

The Province of Buenos Ayres also proposes to construct and exploit
on its own account a narrow-gauge line running from La Plata in the
direction of the fifth meridian. For this undertaking French capital will
also be solicited.

Finally, the National Government, not wishing to remain inactive in the
midst of these civilising activities, has just obtained the approval of
Congress for a vast scheme of populating the southern territories of the
Republic; a scheme initiated by an ex-Minister of Agriculture, Dr Ramos
Mexia, the basis of which is the construction of over 1200 miles of
railway, along which new centres of colonisation will gradually be formed.

This is the great object of the present Government. It has taken shape
in the form of a law, having as its especial object the development of
the national Territories, and having regard both to the creation of new
railways and the progress of colonisation; problems closely connected
where the opening up of a new country is concerned, and value is given to
its soil.

The plan adopted by the Government is first of all to build the railway,
which is the great instrument of civilisation; then to profit by the
increased value which the land will immediately take on along its
course, by dividing and selling it with a view to colonisation. The most
immediate result of this policy is that the soil, which has hitherto been
uncultivated or abandoned, rapidly attains a double or treble value. The
same thing happens when irrigation works are carried out, as they may be
in certain districts, rendering productive soil that has hitherto been
uncultivable for want of water. We may cite the Rio Negro among those
Territories in which recent attempts have been made to realise the value
of the soil, and towards which the attention of capitalists as well as
colonists has lately been directed.

To ensure the carrying-out of these schemes, the State usually has
recourse to contractors who accept payment in Government bonds, with a
margin of profit sufficient to pay them for their enterprise. We may
therefore say that the affair is good for every one, and that it is as
much to the advantage of the State as to the profit of the capitalists
who take up these proposals.

Finally, if we wish to estimate the probable development of the
Argentine railways, basing our figures not on the concessions granted,
which already amount to a length of more than 9000 miles, but on the
possibilities of obtaining capital, we may reasonably give 4500 miles
as a probable figure of growth. To this figure we must also add that of
the lines now under construction, either on behalf of the State or by
existing companies, which on the 1st of January 1908 amounted to a total
of 4800 miles, of which 973 belonged to the State railways and 3827 to
private companies.

We may thus legitimately estimate that in the coming years the Argentine
railway system will be increased by some 6200 miles, making a total of
nearly 19,000 miles. But to keep to solid fact, we must add that such
development depends on continued agricultural prosperity, the rapid
increase of ploughed lands, and, above all, on a brisk immigration; for
these conditions are indispensable to all fresh progress in the Argentine.

In this large increase of railroad construction we may perceive at
the same time the application of a new programme. The State to-day
especially favours the construction of a second network of economical
railways, running between the broad-gauge lines or even crossing them
diagonally——completing them, in fact, and duplicating them. The aim of
this policy is not only to respond to the development of traffic caused
by abundant harvests, but also to lower freights by the establishment of

As an element of the future railway system of the Argentine, we may also
include the lines of communication with Chili, across the Cordillera,
so soon as they are open to through traffic. At the present time the
Trans-Andean railway on the Argentine side of the range has reached the
frontier of Chili at Las Cuevas, 10,000 feet above sea-level; and on the
further side the Chilian Government is hastening the work of construction
on its own Territory, so that it only remains to complete the two miles
of tunnel in order to open the whole line to traffic.[26] Once in
operation, the journey between Valparaiso or Santiago and Buenos Ayres
will occupy less than forty hours, while at present, by the sea route, it
takes twelve to fifteen days, and involves the difficulties of navigating
the Strait of Magellan.

[Footnote 26: This line is now open.——[TRANS.]]

The line is narrow-gauge, and some 8-1/2 miles of it is worked on the
rack and pinion system. The highest point will be about 1480 feet above
sea-level, in a tunnel 1·92 miles in length, of which 1·05 miles will be
in Argentine and ·87 on Chilian territory.

The Southern Railway has also a line which at present runs as far as
Neuquen. The Directors of the company have ordered the continuation of
this line into Chili, going by way of Antuco, thus establishing a direct
route between the south of Chili and the agricultural districts of the

Despite the formidable barrier raised by the range of the Andes, the
Argentine and Chili, two nations having the same origin, with a common
frontier of 3000 miles, are destined, by means of their railways, to an
increasing closeness of relation. Chili is a country poor in cereals,
and in especial does not raise sufficient cattle for the needs of her
population. On the other hand, she produces wines which are highly
appreciated in the Argentine. There may thus spring up between the two
countries an exchange of products, which the railways will certainly
increase, and which will give the Argentine railroad system the benefit
of international traffic.

To complete this sketch of the Argentine railways, and of the progress
they have realised, we must not fail to speak of the construction of an
industrial traffic-way which has established a remarkable record——not
only in South America, but over the whole world. We refer to the
suspended railway, constructed in the Province of La Rioja under the last
Presidency of General Roca, in order to carry down to the plains the
produce of the famous Famatina and Mexicana mines.

This suspended way, which is over 21 miles in length, and which cost
£76,000, is, in the words of M. Civit, the Minister of Public Works,
who inaugurated it, the longest traffic-way of this kind in the two

[Footnote 27: As for the probable profits of this line, the Minister
makes the following statement: “In counting on a minimum traffic of 50
tons a day during nine months in the year——an amount based upon the
present yield of the mines——and deducting 50 per cent. of the gross
receipts for working expenses——which is a maximum——we find that to obtain
6 per cent, interest on the capital employed, it would be sufficient to
receive 3·36 paper piastres, or 7·6 francs (6 shillings ·96 pence) per
ton of ore, whereas the mining companies with the present resources pay
20 piastres.”]

“It glides amid the snows and the tempests, crossing abysses thousands
of feet in depth, and ending at a height of 15,000 feet. The highest of
its towers is as high as the summit of Mont Blanc, and the mines, into
whose bowels it enters, will take their place, like those of Rio Tinto
and Bilbao, in the commerce of the world, as the agricultural products of
the Argentine have already done; thus drawing all eyes to this privileged
country, which is set apart for the most brilliant destiny.”

If we now consider the part played by the railways in the general
development of the Argentine, we are forced to recognise that in a
country so essentially agricultural, the railroad is an indispensable
auxiliary of production.[28] The Argentine Republic is a large country,
containing 1,155,000 square miles of territory, and is barely peopled by
its 6,000,000 inhabitants; it will therefore be understood that instead
of following the population, as in Europe, in the Argentine the railway
precedes the population. In the Argentine the railway is like a magic
talisman, for wherever it goes it entirely transforms the economic and
productive conditions of the country.

[Footnote 28: Among matters still under consideration in the Argentine,
we may mention the concession for the port and railway of Samborombon,
which would connect with a system of narrow-gauge railways leaving
Samborombon, which would be a great Atlantic port, and running to the end
of the Territory of Pampa Central, thus facilitating the export of its

We have seen that in the matter of transport agriculture will shortly
enjoy improved conditions; there will be greater facilities for bringing
its products to the ports of embarkation, and placing them in the
centres of consumption. But what are these conditions at present? What
is the precise relation between the railways and agriculture? Are they
sufficient for the rapid transport of the harvests? This inquiry, which
is of immediate interest, has been made by M. Emile Lahitte, Director
of the Division of Statistics in the Ministry of Agriculture, with his
usual competence and practical good sense. We will take certain useful
data from this source, without prejudice to other data which we have
collected, while profiting by the experience of other personalities
equally well informed.

One of the most characteristic peculiarities of agricultural production
in the Argentine is the fact that, conversely to the production of the
United States, about 80 per cent. of the harvest, and perhaps even
more, goes to fill foreign markets, leaving only 20 per cent. for home
consumption; and not only is it necessary to export this surplus, but it
has to be exported with as little delay as possible. In the United States
the annual cereal harvest amounts to about 4000 millions of bushels, of
which scarcely 10 per cent, or 12 per cent. are destined for export. The
rest remains in the granaries, and is manipulated, during the rest of the
year, in response to the needs of a population of 80 million inhabitants.
But in the Argentine, supposing the harvest of wheat, flax, and maize to
amount to 400 million bushels, one might count upon the exportation of
320 millions, the 80 millions remaining for home consumption.

From the commercial point of view, agricultural production thus depends
chiefly on the importing markets. This is so far the case that if we
look into the monthly figures of exportation, remembering that threshing
begins at the end of December and continues sometimes into March or
April, we shall find that by June three-quarters of the year’s export
has already been shipped. The exportation of wheat in 1907 amounted to
100 million bushels, and by the end of June 79 million bushels, or 79
per cent., had already been shipped. The quantity of maize exported
during the same year was 48 million bushels, and in October, that is,
five months after the harvest, 40 millions had already been shipped; that
is, 84 per cent. The statistics of the carriage of cereals by railroad
also clearly prove the pressure and congestion existing in the months
following the harvest.

From this peculiarity it follows that there is always a struggle
latent between the exporters of agricultural produce and the transport
companies. In some cases, as in 1905, this struggle took the form of
judicial protest; the chief export houses sued the “Great Southern of
Buenos Ayres” for damages in respect of unjustifiable delay in the
transport of cereals.

It must be admitted, however, that the railway companies are not always
the cause of such delays in export; there are other factors also which
we must take into account and consider in relation to the national

One of the elements which influence the regularity of transport is the
amount of cargo-room available at the ports. When there are many steamers
and sailing-ships in port the shipping rates fall; the exporters hurry
to make contracts with the shipping lines, and in order to be in time
to avoid surcharges, they demand a large number of goods wagons of the
railways, which the latter naturally cannot always produce. The law
states that the railway companies must maintain a goods service equal
to the normal demands of the traffic; and the demands created by the
accidental causes we have mentioned are not normal.

On the other hand, if the shipping contracts are high, or the prices in
the consumers’ market low, the buyers will be unwilling to despatch their
cereals to the ports of embarkation, and the railway companies can do
nothing to clear their stations of large quantities of accumulated grain,
which they cannot forward, since the buyers will not give the order for
their despatch.

During a recent harvest both these phenomena were observed; on the
Southern Railway the harvest was abundant in quantity and good in
quality, but only a small number of steamers were lying in the terminal
port (Engineer White Harbour); every exporter in the district wanted to
ship at once, but the railway could carry only what it was capable of
carrying in a normal period.

It was another affair in the districts served by the Central Argentine
and the Buenos Ayres and Rosario Railways. Here the wheat was scanty
and of poor quality, and the buyers had sent very little to their port
of embarkation——Rosario. They preferred to send their purchases to the
grain-elevators of Buenos Ayres, where, by means of blending the central
with the southern wheat, a special grade of flour was produced, superior
to that produced in the districts served by the above two companies.

The best solution of this question of the responsibility of the railway
companies toward the despatchers would be a rule that the railways should
be obliged to despatch in the course of a day only the amount of produce
sent to the stations during the same lapse of time. But the exporters are
generally Argentines, while the railways are usually in foreign hands;
so that this solution, though equitable, would not be regarded with much
favour, and it is probable that the railway companies will be called upon
to remedy this situation, so unfavourable to Argentine commerce, at their
own cost.

Let us now see how far the railways have responded to the increase of
agricultural productions.

According to the official statistics, in 1895 the Argentine Republic
contained 8760 miles of railways, and the merchandise transported by the
various railway companies during that year amounted to 9,811,100 tons.
In 1907 the railway systems had increased to a total length of 14,000
miles, while the produce carried during the preceding year amounted to
28,394,500 tons. These figures represent an increase of rather more than
59 per cent, in railway mileage, while the transports had nearly trebled
in twenty years.

According to the same authorities, between 1897 and the end of 1907
the rolling stock and the capacity of the goods cars increased in the
following proportions:——

  Year.      Number of Cars.      Capacity in Tons.
  1899           32,897                369,764
  1900           34,118                398,736
  1901           35,503                432,342
  1902           36,288                466,667
  1903           36,334                480,498
  1904           38,724                570,600
  1905           42,623                688,308
  1906           48,840                878,886
  1907           52,405              1,029,122

From these figures we obtain the increase in the number of cars of
produce and their contents in tons; but it is more to the point to know
how their rolling-stock is utilised. According to M. Lahitte, the normal
distance travelled by a goods car is 6210 miles in a year; but to judge
by the statistics its actual record is always in excess of this figure,
since in 1902 the distance travelled exceeded 8910 miles per car. It is
evident, therefore, that the rolling-stock has been run to its utmost
capacity; but it is also evident that in practice the cars have not been
loaded to their utmost capacity, as the normal load is 4·37 tons per car,
while the average load actually carried has been hardly 1·70 tons.

It follows accordingly that, in spite of the distance travelled per car,
the companies have only profited to the extent of 39 per cent, of the
capacity of their rolling-stock; but we must not forget that there is
always a difference between theoretical capacity and effective capacity,
which varies according to the nature of the load. This fact is further
explained when we add, as we must, that out of a hundred cars sixty-nine
make the journey loaded while thirty-one go or return as “empties.”

We see from these data that although the Argentine railways possess more
than enough rolling-stock for the rapid transport of all agricultural
products to their ports of embarkation or destination, yet in practice,
on account of the abnormal character of the traffic, the railways only
very imperfectly perform the services which they ought to perform, while
the fault can hardly be imputed to them.

But this trouble will disappear as soon as the large buyers of cereals,
in place of expecting everything from the railway companies in the
matter of rapid transport, while they themselves wait to despatch their
crops until the international prices are favourable, finally decide to
build the granaries and warehouses which they now demand of the railway
companies. To simplify the task of these companies, elevators should be
erected at the stations which serve the important agricultural zones, so
that the cereals could be graded before loading them on special cars,
which would then transport them to the elevators of the principal ports,
whence they would glide into the holds of vessels specially prepared
for the trade. But all this would require materials and plant which the
country does not so far possess; yet with the rapid agricultural progress
of the Argentine, the plan should be easy of accomplishment.

As will be seen by the data we have given, the method of despatch is
quite unlike that practised abroad. While in Europe the railway depots
only receive goods for immediate transit, the Argentine grain-merchant
expects the depôt to serve him for a warehouse until the moment he
receives a telegram and requires the railway to transport to the port of
embarkation, without delay, the large quantities of grain accumulated at
the stations.

                              CHAPTER III


Immigration is a vital problem for the Argentine——Table of the
    population per Province and per Territory. Its sparsity——The
    Exceptional situation of the Argentine as the objective of
    European emigration——The poor results hitherto obtained through
    default of colonisation——The faulty division of the public
    lands——History of immigration in relation to colonisation——The
    nationality of immigrants.

The economic and financial organisation of the Argentine being now
assured, and peace without and within being established, while at the
same time the revolutionary spirit of the bad old days has gradually
disappeared, the great problems which the country has to face to-day
are principally those dealing with the development of agricultural and
industrial production and its outlets.

But among these problems none is more vital to the future of the
Argentine than the problem of filling the vast gaps of empty territory
with new elements of population.

Here, according to the last official data, are the figures relating
to the distribution of the population in the Provinces and National

                                          Area in sq. miles    Population in 1908
  Province of Buenos Ayres and Capital         117,563             2,427,628
     ”     ”  Santa Fé                          50,784               772,410
     ”     ”  Córdoba                           62,000               477,680
     ”     ”  Entre Rios                        28,709               399,333
     ”     ”  Corrientès                        32,494               317,247
     ”     ”  Tucuman                            8,903               280,311
     ”     ”  Santiago de l’Estero              39,660               192,639
     ”     ”  Mendoza                           56,350               174,619
     ”     ”  Salta                             62,040               141,610
     ”     ”  Catamarca                         48,408               103,680
     ”     ”  San Juan                          33,630               105,684
     ”     ”  San Luis                          28,460               103,367
     ”     ”  La Rioja                          34,450                86,352
     ”     ”  Jujuy                             18,930                56,945
                                               ———————             —————————
                             Carry forward,    622,381             5,328,907

                                     Area in sq. miles    Population in 1908
                   Brought forward,        622,381           5,328,907
  Territory of the Pampa                    56,170              51,673
     ”      ”  Misionès                      8,590              38,748
     ”      ”  Neuquen                      42,235              18,020
     ”      ”  Rio Negro                    75,726              15,961
     ”      ”  Chaco                        52,604              13,838
     ”      ”  Formosa                      41,294               6,309
     ”      ”  Chubut                       92,680               5,244
     ”      ”  Santa Cruz                  107,860               1,742
     ”      ”  Les Andes                    24,986               1,245
     ”      ”  Tierra del Fuego              8,277               1,222
                                         —————————           —————————
                                         1,137,803           5,792,807

The above figures prove more eloquently than any other argument that
the supreme necessity of the Argentine people at the present time is an
increase of population. The territory of the Republic has an area of more
than 1,130,000 square miles, and its population amounts to no more than
5,792,807, which gives a density of 5·1 persons per square mile. One
should also recollect, in order to grasp the true significance of these
figures, that of those 5,792,807 inhabitants, 157,963 inhabit the 43,000
acres which form the site of Buenos Ayres; so that only 4,634,841 remain
to people the rest of the country, a fact which still further lessens the
density of the population.

This density varies in different regions and in different Provinces;
thus the eastern or coastal region, formed by the Federal Capital and
the Provinces of Buenos Ayres, Santa Fé, Entre Rios, and Corrientès, has
17·08 inhabitants to the square mile, while that of the centre, which
comprises Córdoba, San Luis, and Santiago de l’Estero, has only 5·8.
As we penetrate further inland the density grows still less, until in
the western or Andean region, formed by the Provinces of Mendoza, San
Juan, La Rioja, and Catamarca, the figure is barely 2·7. In the northern
region, embracing the Provinces of Tucuman, Salta, and Jujuy, there are
5·23 inhabitants per square mile.

But it is in the National Territories——in one of which more than one
important European people could find room to spare——that we find the
lowest density. There the desert reigns in all its desolation. The
Territory of El Pampa, whence so much wealth has been drawn of late
years, and whose area is 56,200 square miles, contains barely 52,000
inhabitants; that of Rio Negro, whose area is 45,600 square miles,
contains but 16,000, while in the Territory of Santa Cruz, situated on
the shores of the Atlantic, in which there are important ranches, and
which might contain a numerous pastoral and maritime population, there
are only 1742 souls to its 58,890 square miles. All these figures prove
that the Argentine is, without metaphor, a desert nation, and that for
the present and for a long time to come, its peopling will constitute its
great national need.

To this affirmation we must add another no less certain: that in the
normal order of human events, and in accordance with the economic and
sociological laws that govern European nations, there is no country in
the world which assures the labourer who establishes himself upon its
soil of such perspectives of wealth and welfare. All things compete
to make it a paradise of immigration: the softness and variety of
its climate, the richness of its soil, the extent of its territory,
the enormous inland waterways which cross it, and the facilities of
communication with the European consumers of its produce, with whom the
Argentine is connected by one of the most reliable ocean traffic-ways in
the world.[29]

[Footnote 29: The distance of nearly 7200 miles from Buenos Ayres to
the French ports is crossed by the great transatlantic liners in from
eighteen to twenty-one days. The Argentine Parliament has voted a law
authorising the Government to give a subsidy of £400 monthly to any
company adopting the refrigerator system and undertaking to make the
voyage to Lisbon or Vigo in fifteen days.]

The United States, which have hitherto been the objective and centre
of attraction to which men of initiative have converged from all parts
of the world, are beginning to experience all the troubles familiar to
European nations as the result of an excessive population.[30] It is for
this reason that they are striving, by all the means in their power, to
restrain the stream of immigration that pours upon their shores.

[Footnote 30: The population of the United States is hardly yet
excessive; the country is very much more than self-supporting, and many
States and Territories are sparsely settled. The real source of trouble
is that many of the national resources are locked up in the hands of
Trusts or private owners; and the effect of railway combinations and of
produce trusts all over the country is resulting in a state of affairs
similar to that produced by a lack of communications and also an effect
similar to that of over-population. It is obvious that both causes make
for emigration, as the English immigrant in Canada, who finds all the
best locations occupied by Americans, has cause to know.——[TRANS.]]

Australia, which was also only recently one of the great centres of
immigration, has during these last few years suffered terrible economic
shocks, of which the effect has been to divert the stream of new
arrivals.[31] Moreover, as a rival of the Argentine, Australia has two
causes of inferiority: her rigorous climate, which exposes the country
to violent extremes of temperature, passing from intolerable heat to
a bitter cold, and, on the other hand, a distance from the European
countries to which she exports her products double that between the banks
of the Plata and Europe.

[Footnote 31: Here again the trouble is partly due to the back-blocks
being taken up by large settlers, and still insufficient means of

Having thus made it clear that the Argentine Republic is in an
exceptional position to attract and to support a large European
population, the time has come to measure the distance travelled, and
to note the progress realised, so that we may see whether the results
obtained are in proportion to the perfect adaptation of the soil to

Without being too pessimistic, we are forced to recognise that all
efforts hitherto made by the Argentine to increase its population have
hitherto remained without appreciable effect.[32]

[Footnote 32: It is one of the disadvantages of immigration from a very
poor country where there is no political oppression, that immigrants will
return to it, after saving money in a country where money is cheap and
the standard of living higher, as the work of a few years will establish
them comfortably in their native country. This is especially true of
Italian emigrants. The evil will doubtless be overcome by a measure
comparable to the “Homestead Act” of the United States, in conjunction
with national loans of capital or of farms as going concerns, to be
bought by payment at a low interest, which would result in a population
of peasant owners in comfortable circumstances.——[TRANS.]]

Colonisation, that is, the peopling of the country, was inaugurated in
the Argentine by the initiator of all true progress——Rivadavia——who
founded the first colony of Santa Catalina. This work was intelligently
and enthusiastically continued by Mitre and Rawson, in 1863: it was
then vigorously pushed by Sarmiento during his extremely progressive
administration; but as a matter of fact, in spite of all these efforts,
colonisation has not given the results that were expected of it. To
explain this lack of success, we must suppose that the work has not been
promoted according to the indications of science and experience, and that
a variety of events, uncontrollable by the human will, has thwarted the
praiseworthy intentions of the Government. Otherwise it is impossible
to account for the fact that the Republic contains less than 6 million
inhabitants, whereas its soil would support 100 millions.

To attain the primordial object of peopling the country, the Argentine
has had at its disposal, among others, one very important means——the
public lands——a means which other nations in similar circumstances have
employed with excellent results, but which in this case has unhappily not
produced the same happy effect, being manipulated by inexperienced or
thoughtless hands.

Various laws have been voted in the Argentine, tending to augment
the population by means of colonisation. All systems have been tried
successively, and one and all have failed. “This failure,” says M.
Eleodore Lobos, in an extremely instructive volume published under the
modest title, “Notes on the Land Laws” (_Annotations sur la législation
des terres_), “is an incontestable fact, and must be attributed not
only to economic, administrative, and political conditions, but also to
the freedom with which the soil has been divided into lots of enormous
area, and the obstacles opposed to the easy and secure acquisition of
small properties. In other terms, our politicians have effected the very
reverse of a rational colonisation, and have established a system of
large properties instead of subdividing the land between the colonists
according to their productive capacities.”

This error was recognised by the Government more than fifteen years ago;
but the influence of speculators, who profit from this short-sighted
policy, has been more powerful than all attempts at reform.

“To understand the matter,” says the same author, “we have only to see
with what indifference to the public weal the executive, during the last
twenty-five years, has disposed of 67,817,000 acres of uncultivated soil,
which formed part of the national domain. The laws voted were impotent to
prevent the disposal of these public lands in large parcels, so that the
disposal of these lands failed to draw the population which these vast
domains could support.”

The real beginning of Argentine immigration was when the tyranny of Rozas
was overthrown on the 3rd of February, 1852, and a regular Government
established, which voted a fundamental law of which the object was “to
cherish the general welfare, and to secure the advantages of liberty to
every citizen, to posterity, and to all people of the earth who desire to
live on Argentine soil.” From this moment a powerful current of European
immigration set in; turned aside from time to time by financial crises,
plagues,[33] and war; but never completely arrested. Industry, commerce,
and agriculture, which had so far slumbered, received a considerable
stimulus from this new source. In a single year more immigrants entered
by the port of Buenos Ayres than had for many years entered the whole

[Footnote 33: The term used, _fléaux_, would probably include
yellow fever, drought, locusts, cattle disease, bad harvests, etc.,

The public administration did not take the trouble to keep an exact
record of the number of immigrants before the year 1853; and between
1854 and 1870 we have simply the number of new arrivals, without any
further details. Only since 1870 have the official statistics classed
the immigrants according to nationality, and only since 1881 have they
recorded other details, such as sex, age, profession, education, etc.

During the last six months of 1854, 2524 persons entered the country; in
1855, 5912; in 1856, 4672; in 1857, 4951, in 1858, 4658; and in 1859,
4735; or 27,452 in six years: that is, far more than had entered during
two centuries of colonial life.

In the decade formed by the years 1860-1869, the number of immigrants
increased to 134,325; in the years 1870-1879, to 264,869; but the highest
figures, no less than 1,020,907, were reached between 1880 and 1889. But
we must confess that during this decade certain artificial means were
employed to recruit the population in Europe; such means as gratuitous
passages, which brought to the Argentine a number of useless people,
unfitted for any productive task whatever.

During the following decade, 1890-1899, which saw the terrible banking
smash and the loss of public credit, as a result of every kind of excess,
the immigration diminished slightly——to 928,000 persons——and at certain
moments emigration also made itself felt, in such proportions that it
amounted to a veritable exodus. The departure of those who failed to make
money in the Argentine or find the work they sought amounted to 552,172,
the largest figures that have so far been recorded.

Unhappily this double stream of immigration and emigration has continued
up to the present. Thus, in 1900-1904, 601,682 immigrants entered the
country; but, on the other hand, 384,000 emigrants left it. Such figures
as these denote a grave disorder in the assimilative faculty of a nation.
Matters were no better in the three years 1905-1907, since although
781,796 immigrants entered from Europe and from Montevideo, 324,687
emigrants left during the same period, leaving a total of only 457,108 in
three years.

In the previous period, from 1900-1904, the diminution of the current of
immigration was explained by various causes: in the first place, by bad
harvests, the suspension of important public and private undertakings,
the fear of war over the frontier question, the dearness of living, the
difficulties experienced by the immigrant in settling in the national or
private colonies: the excessive price of land and the high rents in the
more promising agricultural districts, the insecurity of life for man and
beast, the abuses of the authorities, especially in districts remote from
the centres of population, and the tardy, costly, and faulty nature of

But since this period many of these causes have disappeared, thanks
to the splendid harvests of the last few years, and to the period of
rapid economic expansion upon which the Republic has entered. It is
difficult, under these conditions, to explain the still existing lack of
immigration, which denotes a disorder of the assimilative faculties of
the country.

Among the causes likely to prevent immigration there is one which must
not be too closely insisted upon: the increasing cost of living. But
it is the European mode of life that is dear, while in the country
districts existence costs next to nothing, as the colonist himself
produces practically every alimentary necessity.

We must also note that every year numbers of harvesters arrive from
Europe, earn good wages, save money, and return to their native countries
directly after the harvest.

In 1905, 1906 and 1907 the migratory movement was represented, as we have
seen, by 781,795 immigrants and 324,687 emigrants. If we allow that each
of these latter took away with him a sum of £30, as the Department of
Immigration has calculated, it follows that from this cause alone nearly
£10,000,000 left the country during this period of three years.

Here are some figures taken from an official publication dealing with the
migratory movement, which relate both to immigration and emigration, and
show which European countries have chiefly contributed to the current
of immigration. Italy and Spain, as will be seen, furnish the greatest
number of immigrants.

                     _Immigration and Emigration._

  Year.    Immigrants.    Emigrants.    Excess in favour of
  1904       125,567        38,923             86,644
  1905       177,117        42,869            134,248
  1906       252,536        60,124            192,412
  1907       209,103        90,190            118,913
  1908       255,710        85,412            170,298

                    _Immigration from 1857 to 1908._

  Italians                     1,799,423
  Spaniards                      795,243
  French                         188,316
  English                         42,765
  Austro-Hungarians               59,800
  Germans                         40,655
  Swiss                           28,344
  Belgians                        20,668
  Other Nationalities            203,242
                      Total    3,178,456

As we have already observed, one of the causes which impede emigration is
to be found in the faulty distribution of the soil, the obstacles which
the agricultural immigrant has to surmount before he can become the
proprietor of even a scrap of ground; and in the lack of serious attempts
at colonisation, which would provide the cultivator with the means of
working his holding and finally of becoming its proprietor. “How many
immigrants,” says Señor Girola, “coming to this country with the idea of
buying a little piece of land, have been forced to abandon their dream,
on account of the difficulties put in the way of their obtaining the
desired holding!”[34]

[Footnote 34: _Investigacion agricola_, 1904, Carlos D. Girola.]

Far from encouraging the promotion of a class of small land-owners, the
State has assisted in the establishment of enormous holdings, which are
the chief obstacle to the peopling of the country. In place of dividing
into small allotments, accessible to modest fortunes, the great stretches
of land near the railways or the ports, and offering them for sale at low
prices in the European communities from which a number of immigrants come
each year, as is done by the United States, Australia, and Canada, the
Argentine administration has subjected all the operations of purchase to
long and wearisome formalities which quickly exhaust both the savings and
the patience of the purchaser.

Argentina, then, if she wishes to solve this vital problem of
colonisation, which is for her the problem of immigration, must give
careful thought to the adoption of some well-devised scheme, with the
object of subdividing the present great parcels of land, and of attaching
the agriculturalist to the land he tills, by allowing him to become
its owner. Without this necessary reform, the country will continue to
experience the phenomenon of temporary immigration; the immigration of
men who return to their own countries as soon as they have been able
to save a little money: a process exceedingly prejudicial to the best
interests of the country.

                                PART II


                               CHAPTER I


    principal agricultural districts——The northern, central, and
    southern districts——The division of crops and their varieties.

The constitution of rural property——The division of property——The
    great estates, called “estancias,” and their dimensions.

The drawbacks of large properties——The necessity of a better
    subdivision of the public lands——The division into lots of
    large tracts of land, in order to encourage colonisation——The
    system of exploiting property.

AGRICULTURAL PRODUCTION——Progress realised in the last seventeen
    years——Comparative yield of the chief products, wheat, flax,
    and maize——Lucerne; the importance of the crop and the
    excellent results obtained.

Increase of the area under seed——The total area cultivated in the
    agricultural years 1908-1909——The great agricultural belts.

The Province of Buenos Ayres, its agricultural development and its
    crops——The Province of Santa Fé——The Province of Córdoba——The
    Territory of the Pampa Central.

Agricultural machinery, its importation from abroad, and especially
    from the United States.

THE AGRICULTURAL YIELD——The yield of the soil in the different
    Provinces——Exceptional results in certain districts——Detailed
    calculation of the yield of a wheat farm——Two instances of
    great wealth realised by immigrants into the Argentine.

          _Natural Conditions——The Constitution of Property_

The Argentine Republic, which we are now about to consider from the
geological and hydrographical point of view, offers, by the mere fact
of its physical constitution, an immense future for agriculture on the
largest possible scale, and at the same time for stock-raising and the
rural industries.

We find that the country contains three principal agricultural regions:
(1) the region to the north of the provinces of Santa Fé and Entre Rios;
(2) the central region which runs southward from the limits of the
northern, as far as the south of the Province of Buenos Ayres and the
Territory of La Pampa, including a portion of the Territories of Rio
Negro and Neuquen; (3) the southern region, which runs southward from
the limits of the central region, down to Tierra del Fuego.

The first region is characterised by a hot climate, with regular rains in
the eastern parts; in the west the rainfall is less frequent. The central
region enjoys a temperate climate; there, as in the northern region, the
rains are regularly distributed in the eastern parts, but are very rare
in the west, which is subject to long periods of drought. In the southern
region the rains are less frequent and the climate is more severe, with
the exception of the west and the extreme south, which are also in a
rainy belt.

After long experience a kind of natural selection has come into
operation with regard to agriculture; the various crops are to-day
distributed nearly as follows: Cereals, such as wheat, barley, oats,
maize, and millet,[35] are cultivated more especially in the region
formed by the Provinces of Buenos Ayres, Santa Fé, Entre Rios, Córdoba,
and the Territory of the Pampa, which latter is _par excellence_ the
cereal-growing district. Maize, however, is grown over a still wider
region; it is cultivated with success in the whole of the central and
northern regions of the Republic. Rice can also be grown in these
regions; its culture is being developed in the Provinces of Tucuman,
San Juan, Mendoza, Salta, La Rioja, and Jujuy, and also in Corrientès,
Formosa, Chaco and Misionès. The Provinces of Santa Fé, Entre Rios, and
Buenos Ayres are also capable of producing rice.[36]

[Footnote 35: Millet is an article of diet among the Latins of Southern
Europe. The ordinary “minestra” or soup of the Italian wayside _albergo_
consists, to English eyes, of a pint of hot water poured over a cup of
bird-seed. Pounded, it makes a kind of cake or bread; when boiled it
swells slightly and is partly digested.——[TRANS.]]

[Footnote 36: _Investigación agricola_, by Carlos D. Girola, 1904.]

Oleaginous plants, such as the castor-oil plant, sesame, and the poppy,
find favourable conditions of growth in the north, while linseed,[37]
colza, and rape prosper in the cereal districts.

[Footnote 37: It should perhaps be stated that the flax or _linen_ plant
(Fr. _lin_) so often mentioned in this book, produces not only the flax
or linen fibre of commerce, but also linseed, with its valuable products,
oil-cake and linseed-oil; the first used for fattening cattle, the second
for paints, varnishes, oilskins, and “inlaid linoleums,” as well as the
basis or “skrim” of ordinary oilcloth.——[TRANS.]]

The sugar-cane is cultivated in the northern region, but especially in
Tucuman, in part of Santiago de l’Estero, Salta, Jujuy, and Corrientès,
and in the north of Santa Fé, Formosa, Chaco and Misionès.

The vine is cultivated chiefly in Mendoza and San Juan, where the
conditions of soil and climate are favourable, and where it is
methodically irrigated by the canals which water the whole of the
vine-growing districts; but the wine and the dessert grape can be grown
in the whole of the central region. It also prospers in La Rioja,
Catamarca, Salta, and Entre Rios.

Stock-raising is followed especially in the Provinces of Buenos Ayres,
Santa Fé, and Entre Rios, and in the south of the Province of Córdoba;
and in a great part of the Pampa Central.

The principal characteristics of Argentine agriculture having been
considered, we must now inquire how rural property is constituted; that
is, among how many proprietors or tenants the 35,000,000 acres under
cultivation at the end of 1908 are shared.

In the United States, for example, we know by the census of 1900 that the
840,000,000 acres given over to agriculture are divided into 5,739,657
distinct holdings, giving an average of about 142 acres per holding.
In France, according to the statistics for 1892, 11,250,000 acres were
divided into 5,702,000 holdings, the average extent being about 21 acres.

Is it possible to obtain similar figures for the Argentine? The national
census of 1895 gives us certain data respecting the division of rural
property in this country. The 172,000 holdings, agricultural or pastoral,
which were included in this census, had an area of 20,295,000 acres,
according to the declarations of the owners; and comparing this figure
with the area actually under cultivation, amounting to 12,800,000 acres,
we find that only about the half of these holdings is tilled and sown,
the rest being left as pasture.

This census also took note of the area of each agricultural holding,
and although the result of this inquiry has not been published, a
simple division of the number of acres by that of the holdings gives
us an average of 118 to 123 acres per holding; a figure that would be
satisfactory enough, if it came anywhere near the reality.[38]

[Footnote 38: _Cf. Censo Nacional_, vol. ii. p. xli.]

The national inventory gives only these data in respect of this subject.
As we see, they are far from complete; but even if they were, the
progress of agriculture during the last few years has been so great that
to-day they would only possess a purely historical interest.

Happily the agricultural census (including a census of stock), which was
taken during the first half of May 1908 throughout the whole Republic,
gives us some valuable information on this head.

This inquiry affected 222,174 holdings, agricultural or pastoral, which
had a total area of 450,000 square miles, the area of the Republic being
1,134,700 square miles. This is how these 222,174 holdings are divided:——

There are 53,954 holdings measuring from 27·2 to 123·4 acres; 48,323 of
less than 25 acres; 46,553 of from 250 to 740 acres; 29,624 of from 125
to 247 acres; 12,992 of from 743.5 to 1234 acres; 11,104 of from 1236 to
2470 acres; 2968 of from 2970 to 9260 acres; 2052 of from 9260 to 12,350
acres; 1157 of from 12,350 to 24,680 acres. Holdings of more than 24,680
acres are relatively rare, in comparison with the rest; 423 have an area
of from 24,680 to 30,870 acres; 781 of from 30,870 to 61,750 acres; 168
of from 61,750 to 114,250 acres; 65 of from 114,250 to 123,440 acres, and
finally there are 104 holdings of more than 123,440 acres.

These figures, compared with those of the census of 1895, reveal the fact
that in thirteen years the number of rural holdings has increased by
50,174, and that the area given over to the two forms of usage, which lie
at the base of the wealth of the Republic, has increased by 276,760,000

But in spite of this extraordinary development during the last few years,
from the point of view of the distribution of the soil, the Argentine
is still in a primitive, indeed, almost in a feudal state, by reason of
the enormous tracts of lands which are monopolised by a small number
of owners. These owners utilise their enormous properties in raising
cattle on the great ranches known as “estancias,” or employ them for
agricultural purposes, when they do not prefer to leave them in a waste
and unproductive condition, waiting until time and economic progress
shall give them a value which their own efforts are incapable of giving

These “estancias”——that is to say, the most usual system of utilising the
soil——vary in area from 12,000 to 180,000 or 200,000 acres; some are even
over 330,000 acres in extent. Many of them are only a few hours distant
from the city of Buenos Ayres, or border on the outskirts of important
urban centres.

Such tracts of land given over to stock-raising and owned by private
individuals would be inconceivable in most European countries, where
private holdings are small; nor are they much more usual in a new country
of vast area, like the United States, where more than half the cultivated
lands are divided into farms of less than 100 acres each, and where
holdings of more than 1000 acres, whether under seed or in pasture, are
the exception, the average of all properties and holdings being 143 acres.

It is easy to understand, without a lengthy demonstration, how far
this state of affairs goes to retard the general development of the
country. It is equally easy to understand that in order to stimulate
this development it is necessary before all else to secure an increased
foreign population, by attracting it through the powerful bait of landed

The great obstacle in the way of the agricultural development of the
Argentine arises essentially from the faulty property system; from
the fact that enormous tracts of land are held by a few men; from the
establishment, in short, of the most odious system of _latifundia_ ever
known. This trouble arises from the lack of foresight with which the
State has parted with enormous tracts of land, which have passed into the
hands of speculators or large land-owners, who have left them untouched,
while waiting for the value of their holdings to rise.

In the national territories, according to the deputy Joachim Castellanos,
who is busily lighting the system of _latifundia_, there are belts
of land, now private property, which are divided in the following
proportions: 2,470,000 acres into holdings of from 25 to 99,000 acres
each; 7,400,000 acres into holdings of from 99,000 to 198,000 acres each;
and 7,934,000 acres into properties of 190,000 or 200,000, and over. This
means that there are 17,280,000 acres of useful and cultivable land, in
the hands of unenterprising capitalists remaining, unproductive, used to
increase neither the population nor the production of the country.[39]

[Footnote 39: Speech delivered on 21st September 1903.]

The principal author of this deep-rooted evil is incontestably the
Argentine State, which has squandered its rich inheritance, by allowing
it to pass into the hands of speculators, instead of dividing it
equitably among the new colonists. The subdivision of these great tracts
of land, now concentrated in the hands of a few large proprietors,
is, to-day, one of the necessary conditions of the development of the
country, and it is with reason that influential voices are raising
themselves, in Parliament and in the Press, to proclaim this economic

The great “estancias” of 180 square miles in area, covered by immense
herds of cattle, must finally, says M. F. Segni, author of an
_Investigacion agricola_, be divided into small concerns of from 4000
to 12,000 acres, which would, with fewer animals but a better system,
yield a greater profit both to the owner and to the country. The old
system of large ranching must gradually give way to an intensive system,
when stock-raising, combined with agriculture, will employ a larger
population, attract more capital, and realise better results.

There is happily no need to be greatly pessimistic on this point, as
we can already perceive a tendency to the subdivision of property,
which comes from the powers of the State as well as from land-owners or
commercial companies. Thus the land law of 1907 was passed solely with
the object of preventing large monopolies; it prohibits the acquisition
for the benefit of a single person of any portion of the national domains
of greater area than 6170 acres. The importance of this step will be
understood, when we remember that the State has still to dispose of 212
millions of acres of desert land, suitable for agriculture, and situated
in territories which are rapidly becoming peopled.

On the other hand, there are certain business concerns which, as owners
of enormous tracts of land, are dividing them into small lots, which
they are offering freehold to prospective farmers at fairly moderate
prices, and facilities of payment are offered at the same time. Among
these firms we may mention the “Sociedad Anonima la Curumalan,” owning
some 600,000 acres of land in the southern portion of the Province of
Buenos Ayres, suitable both for cattle-raising and for agriculture,
which is selling land at from £2, 2s. to £3 per acre, according to the
quality and the situation, payable in three or four years; the payment by
instalments being increased by an interest varying from 7 to 9 percent.
yearly. The “Stroeder Colonisation Society,” which has exploited a large
belt of agricultural country; the “Compañia de Colonisation del Rio de la
Plata;” the “Estancia y Colonia Trenel,” founded by the great Argentine
land-owner, Antonio Devoto, and a large number of other companies and
syndicates are working on the basis of enabling the colonist to acquire
his own land, and are doing successful business.

A striking example of progress in this matter of the subdivision of
property is furnished by the statistics of the Province of Córdoba for
the years between 1898-1899 and 1905-1906. During this period 3,193,600
acres of land, out of a total of 9,823,300 acres, which represent the
colonies and settled land of the province, have been sold to farmers;
that is, nearly a third. Thanks to this subdivision, the number of
colonists in this province who have become the actual proprietors of
larger or smaller holdings has risen to 4568. What is happening in
Córdoba is also happening more or less rapidly in the other agricultural
provinces; and it is by this method that the Argentine will one day
succeed in abolishing the _latifundia_, whose progressive disappearance
is a condition of further development.

We might multiply the instances of land-owners or commercial enterprises
which are helping the labourer to buy land, for the system of dividing
the land into small allotments, selling it at a cheap price, and allowing
payment by instalments, is every day becoming more widespread. The
journals are full of announcements of the sale by auction of lands which,
until to-day, have never felt the ploughshare, and are now given over
to colonisation. One also hears men speak, as of an accomplished fact,
of the method initiated by several railway-companies which propose,
by means of their own capital, to bring into the market and increase
the value of the vast tracts of uncultivated land which they own on the
outskirts of their systems.

Unhappily, in spite of this tendency to the subdivision of the soil, the
most usual system of working the land is still that of letting it at a
fixed rent, or for a certain proportion of the yield in place of rent,
or by a profit-sharing system, under which the tenant receives 50, 40,
or 30 per cent, of the harvest. The large land-owners, who are the most
numerous, prefer the former method, and often impose on the farmer the
obligation of leaving a crop of lucerne on the land in the last year of
the tenancy.

The chief drawback of this system is that the labourer never becomes
the owner of the soil he cultivates, so that he is not actuated by the
powerful ties of property, which should attach him to the country and its
destinies. On the other hand, too, the tenant tries to obtain from the
soil the largest profit he can, without troubling to consider whether
he is exhausting it or not; he leaves not even a tree behind him as a
monument of his tenancy. But in spite of all these drawbacks this system
does furnish the colonist with means to buy land cheaply later on, and
in another district. Such is the history of many farmers, who began by
humbly labouring under the conditions above described, and are to-day
rich land-owners, possessing enormous tracts of land, which they work in
the way that they find most profitable.

It is hardly necessary to say that the agricultural methods employed
vary according to the situation of the farms, their fertility, and the
means of communication. Agriculture, properly so called, establishes
itself and spreads along the waterways or railways which facilitate the
transport of the harvests. The crops principally grown cannot afford the
cost of transport at a greater distance than 180 or 190 miles by railway
from the nearest point of embarkation or consumption, and the nearest
railway-station must not be further than 18 or 20 miles. There are only
a few crops of greater value that can be profitably grown at greater
distances, their higher prices covering the increased cost of transport.

The region consisting of the Provinces of Buenos Ayres, Santa Fé,
Córdoba, and Entre Rios, which is the richest in cereals, is also that in
which the greatest number of small farms are to be found. The statistics
for 1901-1902 show that out of 37,434 farms 13,150, or about 36 per
cent., were worked by their owners; 18,819, or 50 per cent., by tenants;
and 5465, or 14 per cent., by _métayers_——that is, tenants who give up
from half to two-thirds of the crops to the owner of the land. Other more
recent statistics, relating to the Province of Santa Fé, give the number
of farmers owning their land at the time of the harvest as 6747, or 32
per cent., and the number of tenants as 14,227, or 68 per cent.

The majority of the farms, especially those cultivated by the owners,
says the _Investigación agricola_, have an area varying from 60 to 250
acres. Farms held on lease or by payment of part of the harvest are
usually larger, especially in the former case, and the work is done with
greater expedition, but as a rule less perfectly and without the same
stimulus. Farms varying from 750 to 1500 acres and more which employ
day-labourers are still less numerous, since as a general thing nothing
is gained by employing them. On the other hand, however, there are large
farms whose owners in reality only supervise matters of administration,
and which are divided among tenant-farmers or _métayers_, paying so much
per cent, of the harvest, or a rent in kind, according to the crops and
the conditions agreed upon. In such a case the proprietor or colonist is
not actually an agriculturalist, but a business man, who more often than
not has not sufficient knowledge to assume the scientific or even the
rational direction of the operations on his estate.

                        _Agricultural Products_

Having considered the physical conditions of the Argentine soil,
the regions given over to particular forms of agriculture, and the
disposition of rural property, the moment has now come to consider what
areas are at present respectively producing crops of various kinds from
seed, comparing them not only with the area of each province, but also
with the statistics of previous years. In making this inquiry, we have a
valuable starting-point in the _Censo agropecuario_, taken in the month
of October 1888; the first serious undertaking of the kind ever attempted
in the Republic under competent direction.[40]

[Footnote 40: _Cf. L’agriculture et l’élevage dans la République
Argentine, d’après le recensement de la première quinzaine d’octobre
1888_, by F. Latzina, printed by P. Mouillot, Paris, 1889.]

In an introductory chapter the Director of this census says: “It is
only eleven years since the products of Argentine agriculture have been
greater than the country’s needs. For example, the quantities of wheat
exported before 1878 were so small as to be negligible. Now we see that
in eleven years we have reached a point at which we export 8,800,000
bushels of wheat (1887), 255,000 bushels of flour (1888), 14,470,000
bushels of maize (1887), and 3,248,000 bushels of linseed (1887). Those
who will look into these figures will perhaps agree that they represent a
great progress for so short a time.”

The area of agricultural land in cultivation, according to the census
of 1888, amounted for the whole Republic to 5,984,790 acres, of which
2,014,000 acres, or about 33 per cent. were under wheat; 1,979,830 acres,
or 33 per cent., under maize; 963,320 acres, or 16 per cent., under
lucerne; 299,050 acres, or 5 per cent., under linseed; 71,420 acres, or
1·2 per cent., under barley; 97,660 acres, or .9 per cent., under vines;
52,020 acres, or ·8 per cent., under sugar-cane, and the rest under crops
of no great importance.

This point of departure being established, let us pass over the follies
of and the damage caused by the frantic speculations of 1888 and 1889,
as well as the financial failures of 1890, and let us call a halt at the
year 1895, in which the country, still under the effect of a terrible
catastrophe only lately undergone, had recovered itself and resumed work
with a fresh ardour: the only proper remedy to heal its wounds, and to
set it once more on the paths of progress. This inventory of the progress
realised by the Argentine during seven years of misfortune is all the
more interesting in that the second national census was taken at this
time, thus precisely marking the economic, democratic, and political
progress of the country. We find that in 1895——limiting our inquiry to
the four principal cultures——the progress realised during these seven
years was as follows:——

  Products.          1888                 1895            Increase in Seven Years.
               Acres Cultivated.    Acres Cultivated.    Absolute.        Per cent.
  Wheat            2,014,130            5,062,717        3,048,587            151
  Linseed            299,050              946,690          647,640            219
  Maize            1,979,910            3,073,130        1,093,220             55
  Lucerne            963,300            1,729,000          766,700             79
                   —————————           ——————————        —————————            ———
    Totals         5,256,390           10,811,537        5,555,147            105

If we now compare the figures for 1895 with those for 1902, we find that
the national agricultural expansion has never ceased during this second
period of seven years. During this period, moreover, an important change
occurred; one which encouraged production by placing exchange upon a
solid basis: we refer to the law of monetary conversion, which gave paper
a fixed value and abolished the discount which had hitherto affected all
private commercial transactions.

In comparing the figures of the years 1895 and 1902, we find that the
progress was as follows:——

  Products.          1895                 1902            Increase in Seven Years.
               Acres Cultivated.    Acres Cultivated.    Absolute.        Per cent.
  Wheat            5,062,717            9,124,449        4,061,732             80
  Linseed            946,690            3,228,774        2,282,084            238
  Maize            3,073,130            4,450,060        1,376,930             44
  Lucerne          1,729,000            4,273,502        2,544,502            147
                  ——————————           ——————————       ——————————            ———
    Totals        10,811,537           21,076,785       10,265,248             94

It now remains to examine the third period, from 1902 to 1904-1905, the
statistics of which are as follows:——

  Products.          1902               1904-1905         Increase in Two Years.
               Acres Cultivated.    Acres Cultivated.    Absolute.      Per cent.
  Wheat            9,124,449           12,110,706        2,986,257           33
  Linseed          3,228,774            2,674,738          554,036           18
  Maize            4,450,060            5,648,988        1,198,928           27
  Lucerne          4,273,502            4,940,000          666,498           15
                  ——————————           ——————————        —————————          ———
    Totals        21,076,785           25,374,432        4,297,647           21[41]

[Footnote 41: This increase would amount to 73·5 per cent. in seven
years, as compared with 94 and 105 per cent. for the two previous
periods: but an average reckoned from two years is of course not

We see that, with the exception of linseed, the progress of agriculture
has received no check; on the contrary, the figures speak of still
greater expansion, attesting to the great economic future of the country.

The culture of wheat, as we see, has increased by 2,986,257 acres; maize,
by 1,198,928 acres; lucerne, by 666,498 acres. Unfortunately, the culture
of linseed has suffered a decrease of 554,036 acres; a result to be
attributed partly to low prices, and to the loss of a certain proportion
of the previous crops.

As for maize, we see that in 1904-1905 5,648,988 acres were sown, a
figure which represents an increase of 27 per cent. over the 4,450,060
acres of 1902. Yet the yield was only 131,155,000 bushels in 1904-1905,
whereas in 1903-1904 it was 163,300,000 bushels. This sensible decrease
was felt chiefly in the Province of Buenos Ayres, where the loss was one
of 31,490,000 bushels, out of the total loss of 32,145,000 bushels, while
in the Province of Santa Fé the yield was almost unaltered.

The average yield in 1904-1905 for the whole country and the entire area
of land under seed may be estimated as 23 bushels per acre, as against
31.4 bushels in 1903-1904. The harvest of 1904-1905 would thus have left
a large deficit, had not the increase of sown lands compensated in part
the diminished yield of the soil per acre. This fact is a witness to the
truth of the important fact to which we have elsewhere drawn attention:
that the Argentine need no longer as before fear a bad total harvest, by
reason of the enormous increase of sown lands.[42]

[Footnote 42: Years hence, when the limit of expansion has been reached,
or expansion for any cause has diminished, the inevitable exhaustion of
the soil may cause some bad years, unless more scientific methods take
the place of the policy of obtaining large yields at any cost; but the
change will probably be gradual. TRANS——[.]]

Since 1905 the agricultural expansion of the Republic has assumed
considerable proportions, thanks to the splendid harvests, which have not
only attracted a greater number of cultivators, but have also enabled
these already established to take in and cultivate new land.

Examining only the figures relating to the harvest of 1908-1909, we
find that the area sown in wheat, linseed, and oats has increased to
20,342,920 acres, which are divided, according to the figures issued
by the Statistical Division of Rural Economy of the Ministry of
Agriculture, in the following proportions:——

                    Acres under   Acres under   Acres under
  Provinces.           Wheat.       Linseed.       Oats.
  Buenos Ayres       6,184,139     1,090,750     1,431,839
  Santa Fé           3,210,050     1,631,188        34,539
  Córdoba            3,711,930       421,870        10,068
  Entre Rios           793,610       565,630        37,050
  Pampa Centrale       780,400        74,100        49,400
  Other Provinces      185,250         6,370         1,235
    and Territories
                   ------------   -----------   -----------
       Total        14,865,379     4,489,908     1,564,151

If we add to these figures the 7,042,710 acres sown with maize in
1906-1907, and the 7,410,000 acres of lucerne which were already in
cultivation, we obtain a general total of more than 35 millions of acres
of land bearing the principal Argentine crops at the end of 1908.

These figures reveal the large increase of 10 millions of acres over
these relating to the harvest of 1904-1905.

In speaking of the chief crops of Argentine agriculture, there is
one which we must especially mention, which, although not capable of
repetition year by year, yet assumes considerable proportions, occupying
already many millions of acres. We refer to the fodder known as lucerne,
which in 1890 was grown only on 1,480,000 acres, and on 1,729,000 in
1895; while to-day no less than 7,412,000 acres are under lucerne.

This crop is a new source of wealth for the Argentine. Its growth
has arisen from the increased value of lands which were until lately
considered unfit for the production of cereals. These lands are now
greatly in demand, and of late years great fortunes have been made out of

Lucerne serves two different purposes; it is exported as dried fodder,
or is used at home to feed and fatten cattle. Hence the lucerne farmer
may either graze his holding or mow it; so that there are lucerne
farms and lucerne “estancias,” or ranches, each having its distinct

[Footnote 43: Lucerne is exported chiefly to Brazil and South Africa.]

The farms are mostly near the stations of the chief railway-lines
which lead to the ports of embarkation, and consist of holdings of
150 to 250 acres, cultivated by small proprietors, or more generally
by _métayers_——tenants who pay in kind. The mowing, drying, raking,
gathering and stacking of the lucerne are operations which last from
October to March; the embalement, or packing into bales, which are
pressed and bound with iron, by means of a press worked by horse-power,
occupies the rest of the year. There is also a form of exploitation which
is more elementary and also more rapid: the cutting and immediate sale of
the crop as green fodder; this method is in use on farms near the cities.

But the great lucerne belt, which occupies by far the greatest proportion
of the sown lands, is composed of the “estancias”, which are composed
of fields or farms of lucerne destined for the feeding and fattening of
animals, chiefly cattle. These exist of all sizes; from the “estanzula”
to the largest ranches. _Latifundia_ sown with lucerne are common in
the south of Córdoba, and there are instances of immense green savannas
of from 35,000 to 50,000 acres——roughly, from 50 to 80 square miles in
extent——consisting entirely of lucerne farms and belonging to a single
lord and master. There are several settlements or colonies of this kind
in this region; such as the Colonia Maria Soledad, situated at Carnerillo
and at Chucul, including some 42,000 acres of lucerne farms; and the
Duggan prairie, which has 32,000 acres of lucerne. Properties of 15,000
acres are numerous.

According to the last statistics published, the culture of lucerne is
distributed as follows: Province of Buenos Ayres, 1,235,000 acres;
Province of Córdoba, 1,235,000; Province of Santa Fé, 740,000; Pampa
Central, 300,000; Province of San Juan, 200,000; other Provinces,
250,000; giving a total of some 4,000,000 acres. At the moment of writing
these lines this area should certainly have increased to a total of 7-1/2
millions of acres.

In spite of the great progress already achieved——it was not less than
25 per cent., for instance, in the Province of Córdoba in 1903-04——the
culture of this species of forage is still in its infancy in the
Argentine; it is bound to increase notably, on account of the superb
results to be obtained, both from its use as fodder and on account of the
manner in which it will transform a certain kind of uncultivated soil
which grows nothing but tough grasses of slow growth and low nutritive

One of the first economic effects produced by the growth of lucerne on
a particular estate or in a given neighbourhood is that it increases
the value of the land on which it has been sown. On this point several
cases have been cited which would seem incredible, were they not easily
verified. Fields which three or four years ago were sold for 2 paper
piastres per acre are to-day worth 30, and lands which were sold for 25
to 30 piastres are now sold for 80 and 100 piastres.[44]

[Footnote 44: Probably the reader need not be told that the roots of
the lucerne plant accumulate enormous quantities of nitrogen-yielding
bacilli, thus producing organic compounds in the soil, ready for use by
the next crop sown. The old practice of sowing clover and ploughing the
roots into an exhausted field revives the land in this manner.——[TRANS.]]

Lucerne farms also increase the value of the land in their neighbourhood.
It is enough to use the phrase, “good land for lucerne,” and the land
referred to will immediately realise a high commercial value.

Of the profits to be derived from lucerne when exploited in a rational
and up-to-date manner, we may judge from a single instance reported in
the Buenos Ayres _Standard_: a league[45] of meadows sown with lucerne in
La Penca, in the south of the Province of Córdoba, has yielded in a year
a profit of £30,000; and in another year it actually produced a profit
of £42,800. This journal also adds that a league of similar land in New
Zealand would be worth no less than £360,000.[46]

[Footnote 45: This league is that of 2500 hectares, or 6175 acres; making
the linear league 3·14 miles.——[TRANS.]]

[Footnote 46: _Cf._ _Anales de la Sociedad rural Argentina_; Art., _El
Pais de la Alfalten_.]

       *       *       *       *       *

The constant increase of sown lands is certainly the most notable feature
of the agricultural situation. It is the more interesting to note
that of late years this development has been due to the nation’s own
resources, as after the politico-financial crisis of 1890 the current of
immigration and colonisation which had assisted agriculture in previous
years was almost completely checked. As soon as the flow of immigration
is re-established——and it seems to us that it is already recovering,
thanks to the attractive power of the abundant harvests rather than to
any political or administrative measure——we shall certainly see that the
agricultural yield of the Republic will receive a fresh impulse from this

The 35 millions of acres sown in 1908-9 represent a little over 4·07 per
cent. of the entire surface of the country, as compared to a percentage
of ·008 in 1888. Besides this, we must not forget that according to the
figures of the agricultural and pastoral census of 1908, 646,620 square
miles, or rather more than 39 per cent., are employed in the feeding of
67,211,754 sheep, 29,118,625 horned cattle, 7,531,376 horses, 465,037
mules, and 285,088 asses.

Finally, if we admit the possibility of considerably increasing, by
means of the intensive system, the yield of cultivated soil, we see that
it will also be possible, on the same stretch of land, to increase the
number of head of cattle; so that it is permissible to conclude that the
Argentine Republic can still conveniently give up a third of her surface
to colonisation, without in the least affecting or damaging the industry
of stock-raising.

Knowing the extraordinary progress attained by Argentine agriculture
during the last twenty years, as well as the development of each of
the particular crops preferred by the Argentine farmer, we must now
inquire in what regions of the country this expansion has made itself
particularly felt. For this purpose we will divide the Republic into
geographical belts, confining ourselves here to an examination of these
Provinces in which agricultural progress has been particularly notable,
and limiting ourselves to the three principal forms of culture:

         _Total Surface cultivated during the Agricultural Year

        Geographical Belts.           Number of Acres Cultivated.

    Northern Section                            998,940
    Western Section                           3,043,700
    Central and Southern (first group)        1,807,190
    Central and Southern (second group)       2,755,980

    Northern Section                            326,210
    Central Section                           3,194,698
    Southern Section                          1,455,650
                                            -----------  4,976,558
    First Section                               360,300
    Second Section                              506,950
    Third Section                               527,980
                                            -----------  1,395,230

  PROVINCE OF CÓRDOBA                                    4,064,760
  TERRITORY OF PAMPA CENTRAL                               913,900
                                           TOTAL        19,956,138

It will be seen from this table that the great agricultural belt of the
Argentine is formed by the Province of Buenos Ayres, Santa Fé, Córdoba,
Entre Rios, and the Territory of Pampa Central. This latter has taken an
important place in the national production, and so rapidly, that we may
still prophesy a notable expansion of its resources. The other productive
belts have in proportion made less progress, excepting the Province of
Mendoza, where vine-growing has been developed, and that of Tucuman,
where the culture of the sugar-cane has made great strides.

There, for the moment, the progress of agriculture has halted, as the
other districts will only be developed later on, when the populations of
the former regions overflow, unless some hitherto unexploited source of
wealth——such as the quebracho in Chaco——attracts capital and labour.

At the time of the last harvest the Province of Buenos Ayres was in the
front rank in the matter of wheat, no less than 6,184,180 acres being
devoted to that cereal. This enormous area represented an increase of
2,933,920 acres since the year 1901-1902, and of 5,254,310 acres since
1895. If we compare this figure with that of 1888, when only 609,560
acres were under wheat, we find an increase of 5,574,570 acres.

Of the 6,184,130 acres of wheat sown in the Province of Buenos Ayres in
1908-1909, 3,620,300 acres, or 53 per cent., were in the region known as
the “Centre and South” (the first and second groups united), formed by an
assemblage of fifty-six cantons, of which some, although they were only
lately affected by the movement which has turned untouched and desert
prairies into green fertile fields, are to-day important centres of
production, having a considerable influence upon the commercial balance
of the country.

The real development of agriculture in the Province of Buenos Ayres
dates only from 1895. Until then it was considered merely as a country
especially adapted for stock-raising, and this false conception was so
rooted in many minds that it was believed that agriculture was out of
the question, except in the Province of Santa Fé. Comparing statistics,
we find that the latter Province had 992,080 acres of wheat in 1888 and
2,470,000 in 1895, while Buenos Ayres boasted only of 510,090 and 906,490
acres in the same years.

It was much the same with linseed; the figures being 180,300 and 657,020
acres in Santa Fé, and 108,650 and 160,550 in Buenos Ayres. Maize formed
an exception; while Santa Fé, in the two years given, had only 150,670
and 429,540 acres under maize, Buenos Ayres had 1,259,700 and 1,652,430

Only in the agricultural year 1901-1902 did Buenos Ayres step in front
of Santa Fé, and attain such crops of wheat as until then were unknown,
leaving all competitors far behind. In the matter of linseed, for which
Santa Fé has always had a special predilection, that Province has always,
since 1885, maintained its superiority over Buenos Ayres. As for maize,
Buenos Ayres retains its superior position, although it is just to admit
that in 1901-1902 the other Province made considerable progress.

Before leaving Buenos Ayres, we must mention that the second place in
the culture of wheat, is taken by the region known as the West, which,
with its 1,471,360 acres, or 29 per cent. of the total, forms, like the
analogous region in North America, one of the great grain districts
of the Argentine. In this region there are cantons, such as those of
Nueve de Julio, Lincoln, Pehuajo, General Villegas, Trenque Lauquen,
and others, which, reputed from all time unfit for agriculture, have
surprised every one by revealing themselves as absolute mines of
wealth. This region has been touched, it is true, by the magic ring of
the railroad, which has unrolled in these new territories, so full
of unexploited wealth, an immense network of tracks, whose marvellous
effects make us think of the tales of the _Thousand and One Nights_.

It is in this region that we have seen, as the logical result of the
agricultural awakening, the most surprising increase in the value of
the soil. These prices mounted by leaps and bounds; from £1, 15s. to
£3, 10s., from £3, 10s. to £7, from £7 to £8, 16s. per acre, and even
more; yet one is forced to admit that this increase, though apparently
capricious, has a real enough foundation, since it is based upon the
remunerative qualities of the soil.

In the Province of Santa Fé, the cradle of the agricultural settlement in
the Argentine, there are at present 820 colonies and cultivated lands, of
which the surface under seed embraces an area of 7,223,980 acres, divided
as follows: Wheat, 3,259,920 acres; linseed, 2,037,990 acres; pea-nuts,
29,390 acres; lucerne, 1,787,280 acres; other crops, 111,400 acres.

The Province of Córdoba has furnished another of the Argentine’s
agricultural surprises. Neglected, not so long ago, by the stream of
immigration which set in for preference towards Santa Fé or Buenos Ayres,
Córdoba began to attract the attention of labourers when the latter
(discouraged by some calamitous years in Santa Fé) were drawn thither by
the fertility of its soil, the scarcity of swamps, the regular rains,
the cheap land, and the proximity of centres of consumption and ports of
embarkation, and by the facilities of transport offered by an extensive
network of railways. There the labourers set up their tents, and their
numbers increased day by day; there they devoted themselves to the
strenuous task of reclaiming the virgin soil, and there, in return, they
obtained magnificent harvests, a veritable benediction of grateful nature.

The results surpassed all expectation; to such a degree, that to-day
the Province of Córdoba is one of the first colonial centres of the
Republic, and the Province which offers the most brilliant future to the
cattle-breeder and the agriculturalist. To-day the transformation of the
soil progresses so rapidly as to astonish both natives and foreigners.

To give some idea of the enormous development of this Province, it is
enough to say that in 1898-1899 it counted 176 colonies and 71 settled
estates. In 1905-1906 these figures were respectively 348 and 190.
The size of these colonies has increased in the same proportions; in
1898-1899 their area was roughly 3,800,000 acres; it increased to
8,910,000. Of this enormous area, reclaimed and cultivated at the time
of harvest in 1898-1899, some 3,150,000 acres represented wheat, 434,500
linseed, and 355,000 maize. We must also mention another important crop,
which covers a large area of the Province of Córdoba; lucerne, which is
represented by some 2,240,000 acres.

But the most surprising fact concerning the Province of Córdoba is not
the vast area under the plough, but the prodigious increase of crops
of every kind. Thus the area sown with wheat, which in 1898-1899 was
1,588,800 acres, was 2,417,920, in 1903-1904 and 2,695,620 in 1904-1905.
It is the same with linseed; in 1898-1899 184,490 acres were sown; in
1903-1904, 439,830 acres. These figures give some indication of the vast
agricultural future which lies open before this Province.

Another agricultural revelation has been afforded by the Territory of
Pampa Central, which in 1888 had only 14,900 acres under the plough;
some 11,000 being in maize, 2100 in lucerne, and 300 in wheat. In 1895
it contained 25,520 acres under culture, and in 1903 308,750 acres were
bearing crops of various kinds; wheat, 71,630 acres, and maize, 419,900;
and in 1908-1909, the Pampa contained 913,900 acres of cultivated soil;
790,040 under wheat, 74,000 under linseed, and 49,400 under oats.

In the space of twenty years the Pampa, once regarded as a sterile waste,
almost impossible of cultivation or of settlement, has seen a great
development. It contains to-day more than 80,000 inhabitants; twenty
centres of population: about 914,000 acres under cultivation; 464,645
cattle; 4,809,077 sheep, and 281,537 horses; with an annual export of
products estimated at 15 millions of paper piastres, or £1,280,000.

Its soil has greatly risen in value; the square league of 2500 hectares
(or 6175 acres, or a square nearly 3·14 miles on the side, or just under
10 square miles) sells for anything up to 100,000 paper piastres, or
£8800; and even in the remoter cantons it will sell for £3500 or £4400.
This extraordinary progress has been accomplished quite recently; it
dates back hardly three years, and the prices tend to increase each day.

Before completing this sketch of the agricultural products of the
Argentine, according to the official statistics, we must remind the
reader that the total of these products increases by leaps and bounds,
so that the figures given must be regarded as strictly provisional,
on account of the great development to be foreseen as new centres of
colonisation are formed. The Pampa Central, of which we have just spoken
as a very mine of wealth, is capable of producing in the future enough
meat and grain to nourish a great part of the population of the world.

In the Argentine men employ, for the more important crops, such as
wheat, maize, linseed, lucerne, etc., the latest and most perfect
agricultural implements and machines; cultivators, ploughs, drills,
harvesters, etc., etc. We have not space to mention all; but it is enough
to say that in the regions where farming on a large scale is the rule,
a progressive spirit is in the air, which impels the owners of great
establishments, and even simple settlers, to furnish themselves with the
very best machinery, for which they sometimes pay considerable sums. That
agriculture has achieved the rapid expansion of which we have just given
details, notwithstanding the little help which immigration has lately
rendered, is due principally to the employment of the perfected machinery
in common use.

The best types of ploughs, harrows, drills, and reapers of all
kinds——binder-reapers, traction-engines, winnowing and thrashing
machines, all of the best construction and the most recent model——are
familiar to the Argentine farmer, who makes constant use of them.

The owners of the great “estancias” make all necessary sacrifices in
order to work their estates in the latest and most perfect manner.
The machinery comes from the United States, and facilitates all the
operations of _la grande culture_. Two or three years ago, for example,
saw the advent of a new machine, simple and of moderate price, which
replaced the reaper and thrasher, by performing both operations at once
as it moved. It reaps the ears of corn, winnows them, grades the grain,
and pours it into sacks; leaving the straw, it is true, but the value of
straw in the Argentine is negligible. All these operations are performed
as the machine progresses; four horses are enough to draw it. With this
new machine corn that is standing in the morning is reaped during the
day, and by the evening is ready for despatch to the port of embarkation.

To give some idea of the extent to which agricultural machinery is used
in the Argentine, we may mention that in the period 1890-1904 there were
imported from abroad, mostly from the United States, 459,006 ploughs,
officially valued for customs purposes at £1,331,409; 22,783 winnowers,
valued at £277,976; 98,470 reapers, valued at £2,041,982; 37,824 drills,
or sowers, valued at £176,268; and 4770 thrashing-machines, valued at
£1,250,184. From 1898 to 1904 13,725 maize huskers were imported, valued
at £340,479.

To complete these data we append a table, giving the number of
agricultural machines imported in the course of the years 1905, 1906,
1907 and 1908:

                              1905        1906       1907          1908
  Ploughs                     66,404      84,948     59,196       29,775
  Winnowers or huskers           790         785        134           98
  Reapers                     14,492      20,739     17,334       18,722
  Drills or sowers             7,911      25,447     13,975        9,528
  Harvesters                     706       2,011        226        1,866
  Thrashers                      909       1,136        490          969

We must also mention that there has been a great development of factories
in the Argentine, which turn out agricultural machinery and implements;
some of these have been established with large amounts of capital,
and possess an equipment fully equal to that of the best equipped
establishments of Europe.

                       _The Agricultural Yield_

Having now considered the agricultural progress achieved in the
Argentine, the areas under seed at different periods, the prevailing
crops, and the regions in which agriculture is more especially
established, we must now study the results of agriculture; that is to
say, its yield, and shall attempt to forecast the future reserved for the

As we have already stated, there are no complete statistics available,
such as there are in the United States and in other countries, which
give in detail the cost of working farms of various sizes, and the
prices at which the latter sell their produce; and it is only from such
details that we can calculate the net profit of each acre. But, despite
this lack, we can probably find the data we require by resorting to the
opinion of those competent in such matters, either because they are
themselves practising farmers, or because they have set themselves the
same problem as that we are facing.

In the good lands of the Provinces of Córdoba and Buenos Ayres, and in
the Pampa Centrale, the hectare may yield the settler 50 piastres (in
notes), or £4, 8s.; in other words, £1, 15s. 7-1/2d. per acre; provided
there is no hail, and if he escapes the other agricultural plagues.
Some estates this year have produced as much as 2000 kilos of wheat per
hectare, or 29 bushels per acre; yielding, at $6 per ton (the Argentine
ton of 2205 lb.) a yield of 120 piastres[47] (paper) per hectare, or £4,
5s. 6-1/4d. per acre. Estimating the expenses at 25 to 33 per cent.,
there remains a profit, let us say, of £3, from which we must still
deduct some 10s. for rent, so that the labourer draws a final profit of
70 piastre notes per hectare, or £2, 10s.

[Footnote 47: The piastre note is approximately worth 2·2 francs, or 19·2
pence——1s, 7-1/5d.]

In one particular establishment, not far from the station of Labenlaye,
on the Buenos Ayres Pacific line, the yield of a family of _métayers_,
who cultivate 125 to 150 acres, and pay a quarter of the crop to the
proprietor, and also work on the cattle-ranch on days when there is
no work in the fields, make an annual profit of £88 a year. This is
equivalent of a profit of from 10s. 4d. to 14s. 4d. per acre, earned by
cultivating the soil as _métayers_ or tenants in kind, retaining 75 per
cent. of the crop; but it must be remembered that this is absolutely
a net profit: all the labourers’ expenses, the cost of nourishment,
clothing, and other current expenses, are all debited first; so that the
£88 may be saved or spent or invested.

But an argument more eloquent than all the arithmetical demonstrations
which we might draw from particular cases is the well-known fact that
every year a large number of labourers become the proprietors of the
holdings they cultivate, or acquire other holdings in the neighbourhood.
It is by no means an exceptional thing for those who cultivate a tract
of land to draw from it in a single year a sufficient sum of money to
acquire it for themselves, while reserving the expenses of sowing and
other work to be done before the next harvest.

To support this statement, here are a few exacter details as to the
capital required to reclaim a holding and its approximate yield.

According to calculations furnished by a man of great experience in
matters of colonisation, the capital required by a family of four or
five persons cultivating 250 acres of wheat, including the expense of
installation in the first year, may be estimated as follows:——

                                          £  S.  D.
  Two Ploughs, sulky type                21   2  0
  Two Harrows, threefold                  7  18  0
  One Roller                              4   8  0
  One Husker or winnowing machine        39  12  0
  Twenty Oxen                            88   0  0
  Two Horses                              8  16  0
  Two Carts                              35   4  0
  Harness, chains, implements, etc.       8  16  0
  House, corral, well, fencing          105  12  0
                                       £319   8  0

The family or the colonist who does not possess such capital will find
rich proprietors or colonists who will furnish him with implements,
draught animals, and seed corn, as well as the necessaries of life. The
harvest over, the seed corn is reserved for the next sowing; the expenses
of the harvest are deducted, and the net profit is halved, one half going
to the proprietor, and one to the colonist. It is thus that the majority
of immigrants begin to earn the capital which enables them to become

For bachelor immigrants there is another method, which gives excellent
results: they place themselves with colonists who possess some capital
as “interested servants,” or profit-sharing labourers, lending their
services from the ploughing to the harvest of wheat and linseed. They
receive for their services food, board, and 6 or 7 per cent. of the
gross profit of 100 hectares. They put the sums received during three or
four years out at interest, and have then sufficient money to buy the
necessary implements and to become tenant farmers. Three or four years
later they buy land on the instalment system, and finally become large
land-owners; one may count by the hundred those who have followed this
course, have become the proprietors of wide tracts of land, and have
to-day made large fortunes.

As soon as he is a land-owner the colonist or farmer has already an
almost certain future before him, as the net profits he obtains each year
accumulate in geometrical progression, unless some fatality pursues him:
a thing that is of sufficiently rare occurrence. To gain some idea of his
net profits, we turn to the following details, which are drawn from a
competent source:

         _Approximate Estimate of the Expenses and the Yield of
                  247 acres of land sown with Wheat._

                                                                  £    S.   D.
  _Preparing the soil._——Two ploughings and a raking,
    at 2s. 3-1/3d. per acre                                      28    3    2
  _Sowing, drilling and harrowing_, at 3·38d. per acre            3   10    5
  _Seed._——238 bushels of seed corn, at £8,16s. per ton          57    4    0
  _Harvest._—— Reaping and stacking, at 4s. 2·68d. per acre      52   16    0
  _Thrashing._——4400 bushels (120 tons) of grain, at
    17s. 6d. per ton                                            105   12    0
  _Sacks._——1500, at 5·024d. each                                26    8    0
  _Transport._——To granary, port or station, 120 tons
    at 8s. 8d. per ton                                           52   16    0
  _Rent._——247 acres, at 8s. 6·6d. per acre (approx.)           105   12    0
  _General expenses._——Repairs, tools, dilapidations,
    wages, hire of machinery, etc.                               52   16    0
                                                 Total         £484   17    7


  Sale of 120 tons (4400 bushels) of wheat, at £6, 3s.           £    S.   D.
    2-1/2d. per ton (3s. 4·28d. per bushel)[48]                 739    4    0
  Expenses of growth and preparation                            484   17    7
                                  Settler’s net profit         £254    7    5

[Footnote 48: At the present price (22 francs per 100 kilos, or about £8,
16s. per ton) the sale would produce £1056, a net profit of £571. This is

In short, a profit of about one pound per acre.

The above figures relate to the property known as “La Vizcaina,” in the
Department of Bolivar; it consists of 123,800 acres of agricultural land,
or 183 square miles, and is the largest agricultural farm in the Republic
belonging to a single owner or held by a single tenant. It must be
mentioned that, on the whole, the land is high; it has never been invaded
by locusts; the depth of the mould or upper soil is considerable, and the
property has two railway stations built upon it and a third about 2-1/2
miles distant, which facilitate the despatch of the harvests.

The above figures do not give a precise idea of the farmer’s situation,
since agricultural land is let for four years, and in four years, six
harvests may be obtained (three of wheat and three of maize), which
sensibly diminishes the cost of working and increases the profits in

We may use the same table as relating to linseed, substituting £7, 18s.
6d. per ton, or thereabouts, for the sowing, and £1, 1s. per ton for
thrashing. In this district linseed-farming is accompanied by certain
risks, on account of the scanty rain and the late frosts; sometimes the
harvest is 7, 8, or 10 quintals (metric) per hectare; but it is usually
only 3 or 4.[49]

[Footnote 49: In normal years, if the fields have been well worked, one
may count on an average of 36 bushels of wheat per 2-1/2 acres, or 14
per acre; 36 bushels of maize per acre, and 12·5 bushels of linseed per
acre. On virgin land the results are often of great interest; for it is
not uncommon to obtain over 20 bushels of wheat per acre, (1 bushel = 60

In order that these figures representing the farmer’s profit shall give
a true idea of the reality, it must be remembered that besides the wheat
crop he can also obtain another and equally profitable crop of maize in
the same year, and he may also increase his profits by fattening pigs
and raising game and other products which command a ready sale in the
neighbouring towns.

These examples must not of course be taken as representing a general
law; the net income of course depends upon the cost of production and
the yield of each harvest, and these two factors may vary infinitely,
where the crops under consideration are as large as those raised in the
Argentine. But what we may affirm is that, besides a certain number of
farms lying fallow, there are hundreds of thousands of acres of virgin
soil, purchasable at a low price, on which it is enough to cast the seed,
after a superficial cultivation, in order to obtain a splendid harvest.
In conditions as favourable as these, and using machinery which enables
the farmer to cultivate enormous surfaces with little labour, there are
always serious probabilities of success for the agriculturalist. This it
is that explains the great increase of cultivated lands during the last
few years, whether virgin lands divided and sold by the owner, or lands
leased to tenants who pay in kind or give up a percentage of the crops.

       *       *       *       *       *

In a country whose soil gives such wonderfully abundant yields, great
fortunes, and fortunes rapidly made, are common. The Argentine, like the
United States, has her legendary type of immigrant, who has progressed in
a very short time from extreme poverty to great riches, by applying his
energy and initiative to agriculture or stock-raising.

Here are two of the most notable and best-known, examples.

A few years ago there died in the Argentine one of the greatest landed
proprietors; a man named Santamarina, whose life-history is worth

Son of a small farmer of Galicia, Santamarina decided, when about twenty
years of age, to seek his fortune in America. His means not permitting
him to meet the expenses of the voyage, he resorted to the classical
procedure; he shipped as a stowaway on a vessel about to leave Vigo on a
voyage, to Buenos Ayres.

Discovered on the voyage, the captain had compassion on him, kept him
on the vessel and landed him, fifty years ago, in the capital of the
Argentine; without any resources, and sustained only by the hope of
gaining a livelihood more easily than in Spain.

Santamarina immediately made his way towards the great plaza, where the
produce of the country was at that time sold; and there, hoping to secure
a job, he spoke to a man who was conducting a wagon, and whose business
it was to bring wool from the country into the Buenos Ayres market.

This man, seeing him strong and willing, offered to share with him
his work as wagoner; but he first inquired of Santamarina whether he
possessed a knife, as at that time in the Argentine it was the necessary
instrument of defence, and at need, of attack, and was also employed in
all the usages of the nomad life.

Santamarina had no knife; but he had a piastre, which the captain had
given him before he left the ship, and with this piastre he bought a
knife, which served in this partnership as his only capital.

Having led the common wagon for some time, Santamarina had saved enough
to buy a better one for his own; then, chance aiding him, he purchased a
few sheep whose wool he sold; and finally, by dint of work, he succeeded
in saving sufficient capital to buy a little land and start sheep-raising
on his own account. This was the beginning of his success; little by
little Santamarina bought more sheep and more land, and became in the end
one of the greater landed proprietors of the Argentine. He died in 1904,
leaving a large fortune and a name justly honoured throughout the country.

To-day a visitor to his magnificent “estancia” of Tandil may still see,
under a glass shade, the knife and a model of the wagon which were the
first instruments of his fortune.

The second story is more commonplace, but no less true. Twelve years ago
two Neapolitan immigrants came to settle at Rosario. To gain a living,
and no doubt in memory of their former trade, they founded in partnership
a _boliche_; that is, a bar for the sale of drinks. When a certain time
had elapsed, their business being far from prosperous, they decided
that one or the other of the two was one too many, and so determined
to separate. But which of the two should retain the _boliche_? They
drew lots to decide the point; and he whom chance favoured retained the
business alone, while the other went in search of his fortune elsewhere.

The latter, far from allowing himself to be discouraged, made for Rosario
harbour, in search of a new trade: he assumed that of a dock-labourer or
lighterman. This was at the time when the growing of maize was beginning,
in the Province of Santa Fé, to give satisfactory results. Our hero,
having spent some time in carrying sacks of grain upon his back from the
quays to the vessels about to sail, conceived the idea of buying, with
his savings, a sack of maize, and to sell it retail, in the country, for
the purposes of seed. This first venture having succeeded, he continued
his operations with a larger number of sacks; then, finally, he abandoned
the trade of porter in order to enlarge his new business, which from that
time increased by thousands of sacks, and soon became a great export

Thanks to the development of the culture of maize in this region, he has
become one of the greatest merchants and speculators in this product, and
enjoys to-day a fortune of many millions, while his companion, less happy
in his affairs, still keeps the little drink-shop in Rosario.

                               CHAPTER II


The world’s wheat-harvest——Comparison between the statistics of
    consumption——The conditions of production in Russia and in the
    Argentine——Comparison with the United States, India and Canada——
    The prospects of the Argentine export trade in wheat.

Having described the progress realised by the Argentine Republic in
the course of the last few years, it will be not without interest to
inquire what are the resources of those nations which are, or may be, the
competitors of the Argentine in the world-market and in the production
and consumption of wheat.

Here, according to the most reliable sources, are the figures relating
to the average yield of wheat in the whole world during the last sixteen

                                       Period                  Year
                                     1894-1903.        1904.          1907.

  Europe (bushels of 60 lbs.)      1,468,000,000  1,656,000,000  1,652,000,000
  America            ”               684,000,000    756,000,000    889,000,000
  Asia and Australia ”               295,000,000    396,000,000    458,000,000
  Africa             ”                43,000,000     57,600,000     54,800,000
                                   -------------  -------------  -------------
             Totals (approx.)      2,490,000,000  2,865,600,000  3,050,000,000
                                   -------------  -------------  -------------

We see that the European production of wheat represents nearly 59 per
cent. of the world’s production, for a population which, according to
the calculations of M. Levasseur, consists of about 411 millions of
inhabitants. If we reduce this figure by one-fourth, thus eliminating
infants and the aged, we find that this population disposes of only 272·8
lb. of wheat per head, or 521·2 lb. less than the “type” or standard
ration of 793·8 lb. per annum, recommended by the Bureau of Experimental
Stations of the Ministry of Agriculture of the United States, after long
and patient research.

In pursuing this inquiry into the distribution of wheat production among
all the countries of the world, we shall be able to judge of the rank
occupied by the Argentine Republic, and by so doing to rectify an error
which is frequently committed, the error of confounding exportation and
importation, which gives this country a very different place to that
which is its right.

Here are the figures showing how the production of wheat is distributed:——

          COUNTRY.                         Period.         Year.          Year.
                                        1894-1903.        1904.          1907.
  United States (bushels of 60 lbs.)    576,000,000    504,000,000    601,000,000
  Russia                 ”              360,000,000    605,000,000    547,000,000
  France                 ”              316,000,000    290,000,000    336,000,000
  Austro-Hungary         ”              180,000,000    170,000,000    197,000,000
  Argentine Republic     ”               76,000,000    147,000,000    177,000,000
  Italy                  ”              119,000,000    143,000,000    148,000,000
  Spain                  ”               93,600,000     91,800,000    109,600,000
  Germany                ”              116,000,000    144,000,000    101,700,000
  Canada                 ”               63,000,000     67,300,000     82,000,000
  Roumania               ”               57,600,000     50,700,000     54,800,000
  England                ”               54,000,000     36,700,000     47,000,000
  Bulgaria               ”                  ——          50,700,000     42,800,000
  Asiatic Countries      ”                  ——         340,000,000    364,000,000
  Australia              ”                  ——          59,400,000     82,000,000
  Other European Countries  ”               ——          78,800,000     65,400,000
  African Countries         ”               ——          47,000,000     54,800,000
  Other American Countries  ”               ——          29,000,000     27,000,000
                                                     -------------  -------------
                            Totals (approx.)         2,890,000,000  3,030,000,000

This table shows that in 1907 the Argentine occupied the fifth place as a
wheat-growing country.

If we compare this production of wheat with the minimum ration of 793·8
lb,[50] which is considered indispensable to human nutrition, we see that
apart from European Russia, with its 116 million inhabitants, there is
left for the remaining 300 millions of Europeans, less a quarter, as we
have explained above——that is, for a population of 225 millions——about
1,200,000,000 bushels of wheat. This quantity represents an average of
151·5 lb. per head per annum, or a deficiency of 249·7 lb. per head.

[Footnote 50: There seems something improbable about this figure. For
one thing, very few people could eat over 2 lb. of wheat——representing
over 3 lb. of bread——per diem; and white bread forms no important part of
the diet of most populations. Probably the figures represent the amount
of bread _necessary_ to a hardworking labourer, whose dietary consists
chiefly of bread——a diet only common to the south of England.——[TRANS.]]

The population of Germany, estimated at 59 millions, has only 147·4 lb.
of wheat per head, making a deficiency of 644·6 lb. per inhabitant.

The United Kingdom furnishes its 42,500 inhabitants with only 50·6 lb. of
bread per annum, leaving a deficiency of 741·4 lb. per head.

Thus Europe, which, without Russia, produces more wheat than the rest of
the world, does not produce enough for her own consumption, low as it is.
It is therefore necessary to seek out these wheat-producing countries
which are in a position to make up this deficiency. Now at the present
time there are very few such countries; they are Russia, the United
States, the Argentine Republic, Canada, and India, and among these it
is the Argentine for which the most important place seems to have been

Russia has hitherto been one of the great providers of wheat to Europe;
but it would seem that this position is not one that she can retain.
Russia is far from having attained the degree of agricultural evolution
which the Argentine has achieved; it is true that she exports 80 per
cent. of her wheat harvest, but then the Russian peasant eats only rye
bread. Of the 326 millions of acres of cultivated land in Russia, 30
millions only are devoted to wheat, or rather less than double the area
used for the same cereal in France, or just double the wheat-area of the
last Argentine harvest.

In the wheat-belt of Tchernoziom, the black earth is all in cultivation,
and its extent cannot be further increased. Fertile though this soil may
be, and although its depth is from 12 to 40 inches, the results amount to
no more than four or five grains of wheat for each grain sown. The last
harvest gave about 5·54 bushels per acre, while the average in France is
20 bushels.

These results are due chiefly to the poverty and ignorance of the Russian
peasant; it often happens that his wheat crop no longer belongs to him,
having been sequestrated by the tax-gatherer in payment of unpaid taxes.
On the other hand, the Russian peasant cannot procure agricultural
machinery, the price of which is increased by exaggerated tariffs.[51]
He cannot even obtain draught animals, his wretched resources not
allowing him to procure them.

[Footnote 51: More: when it is provided for him he frequently will not
use it; or it undergoes a series of remarkable accidents, so that the
harvest has to be gathered by hand. This is more especially the case
where he is reaping another’s harvest, when his object is to ensure the
employment of more hands. He is unable to understand that machinery means
wealth and development. It is only fair to say that it seldom does in
Russia, as he cannot easily get more land of his own, and his master’s
estate is often hemmed in by others.——[TRANS.]]

If to these factors we add the progressive exhaustion of the soil, we see
that the production of Russian wheat for export is very near its limit;
the more so as the home consumption of wheat tends to increase with the
economic development of the country. We can hardly wish otherwise than
that these peasant farmers, habituated to a life of poverty, should
themselves consume some of the wheat they produce, instead of contenting
themselves with rye.

Let us now compare this picture of Russian production to that presented
by the Argentine.

What is it that is responsible for the superiority of the Argentine Pampa
over the Russian steppes? It is the inexhaustible fertility of a virgin
soil, which produces abundant crops, without necessitating artificial
enrichment, nor even the system of the rotation of crops. The soil yields
harvests of 20 bushels to the acre, without exhaustion, producing for
many years in succession, as it is doing now in Chubut, in the south of
Buenos Ayres, and in Córdoba, while the yield of the Russian harvests is
only 5·5 bushels.

For the exploitation of this wealth, Argentine agriculture employs the
most perfect machinery to be obtained in the world, employing thousands
of horses also, to drive it; while the Russian peasant has to work
with his own hands, having neither machines nor horses to multiply his

What shall we say of the prosperous and fortunate situation of the
Argentine colonist, who is not only enabled out of the fruits of his
labour to have bread and meat in abundance upon his table, but is often
in process of acquiring, and that without long delay, the earth he
cultivates. His happy lot has nothing in common with that of the Russian
peasant, the veritable serf of the soil, who never gets so far as to eat
the smallest crumb of the wheat he has harvested.

The one labours under a soft, benign sky, which does not expose him
to the rigour of extreme temperatures in an atmosphere of freedom and
brotherhood which make for energy, while the other labours at his
furrow in a severe and unequal climate, and under a system of political
oppression which crushes his individuality and diminishes the value of
his efforts. A comparison between the social and economic conditions
of agriculture in the two countries inclines us to conclude, without
prejudice, that Russia cannot be considered a dangerous rival to the
Argentine or the markets of the world.

The Republic of the United States of America is incontestably the first
wheat-growing country in the whole world; and it is interesting to
consider whether this country, which is also the greatest exporter of
wheat, will remain in the future, in spite of the growth of internal
consumption, a formidable rival to the Argentine in the markets of the

Let us first of all consider what great progress there has already been
in the production of wheat in the United States.

  Year.  Population.          Production.           Proportion Exported.
                       (in Millions of Bushels.)        Per cent.
  1877   46,353,000                280                     25·6
  1882   52,495,000                373                     31·8
  1886   57,404,000                346                     26·5
  1891   63,844,000                386                     26·6
  1894   67,692,000                383                     41·5
  1897   71,592,000                414                     33·9
  1901   77,647,000                506                     41·36
  1904      ——                     533                      ——
  1905      ——                     645                      ——
  1906   84,216,433                669                     26·6
  1907      ——                     621                     24·1

In the United States the area under wheat has considerably increased, but
the yield per acre has steadily decreased. Thus we find that in 1875 the
yield was 12·3 bushels per acre; 17 bushels per acre in 1879; 11·7 in
1883; 14·9 in 1892; 13·4 in 1899; 10·5 in 1902; 10 in 1903; and 13·6 in
1904. Thus in spite of the increased yield, the results per acre have not
increased, and the average of 1904 is inferior to that of 1879; while in
France the average yield has been one of 20 bushels per acre from 1900 to

The national census of the United States for 1900 contains a graphic
chart, which represents the average yield; from which we find that only
in the north-west, certain districts of the west, and in a portion of the
States of Washington, Oregon, and California has the production equalled
this maximum of 20 bushels per acre; in most other localities, which
afford the vast majority of cases, the yield has varied between 8·5 and
15·6 gallons per acre.

Having glanced at the production of the United States, we must inquire
whether this great nation is increasing its exportation of wheat
proportionately, and how far such exportation may prove an obstacle to
the development of the Argentine.

The following figures representing the years of the largest export of
wheat, will throw light upon this matter.

  Years.         Wheat Exported.              Price.
              (Millions of bushels.)   (Per Bushel on the Dock.)
  1879                 145                  5s. 5-1/2d.
  1892                 218                  5s. 3d.
  1898                 210                  5s. 0d.
  1899                 214                  3s. 10-4/5d.
  1901                 209                  3s. 8-3/4d.
  1902                 227                  3s. 11-1/4d.

We see that in spite of the European alarmists, who in 1876 denounced
the “American Wheat Peril,” it took fourteen years for the exports to
increase from 145 to 218 millions of bushels, and that the latter figure
has been only four times surpassed since 1892.

The production of wheat, on the other hand, increased 116 per cent,
between 1875 and 1903, while the population, during the same period,
increased only by 82 per cent. But we must not forget that although the
increase in population is constant, that of production is not——indeed,
the harvest of 1901 amounted to only 273 million bushels of wheat, as
compared to 280 millions in 1877. There is a decrease in years of bad
harvests, but the population naturally knows no such decrease.

The consumption of wheat did not increase between the census of 1890 and
that of 1900; the average remained 424·6 lb. per head, representing a
deficit of 368·8 lb. below the standard allowance of 793·4 lb.

On the other hand, as the population increases by about 1-1/4 or 1-1/3
millions per annum, while consumption remains stationary, we may conclude
that if this country has not yet reached its maximum of wheat-production,
it is very near that stage, and that the moment is approaching at which
all its wheat harvest will be absorbed by internal consumption, to the
detriment of the export trade.

We have mentioned India as a wheat-exporting country; but it is no longer
a rival to the Argentine in the conquest of the international markets.
Here is the comparative table of exportation from India and the Argentine.

  Years.               India.                 The Argentine.
               (Millions of Bushels.)    (Millions of Bushels.)
  1891-2                54·5                      34·2
  1900-1                  ·9                      36·8
  1902-3                18·5                      60·0
  1905-6                26·7                     109·0
  1906-7                28·9                     106·8

A mere glance at these figures is more eloquent than any commentary,
since the exportation of wheat from India increased by barely 10,000,000
bushels between 1902 and 1907, while that from the Argentine increased
by 46,000,000 bushels. On the other hand, it is known that India
exports only 10 per cent. of her harvest, although her extremely frugal
population consumes only 1·26 lb. of wheat per head, instead of the 793·4
lb. we have taken as our basis of annual consumption. We see then that
the production of India, if her population consumed a normal amount of
wheat,[52] would not satisfy the national requirements, so that far from
exporting wheat she would, on the contrary, be forced to import large
quantities from without.

[Footnote 52: There is really no such thing as a normal consumption of
wheat, especially for India. The amount consumed is a matter of climate,
local or national foodstuffs, fuel, methods of cooking, etc.——[TRANS.]]

_Canada_ is among those wheat-growing countries whose competition is most
to be feared; and this for many reasons——geographical, political and
economical. If Argentine statesmen do not seriously apply themselves to
attracting a foreign population, and to reducing the expenses which press
upon the inhabitants, the Argentine will run the risk of being supplanted
in the future by this important British colony.

Canada, from many points of view, presents a singular analogy to the
Argentine Pampas. Like the latter, it is an almost desert country, its
area being 3,190,000 square miles (nearly 2 millions more than the
Argentine), with a population of 5,371,000, or slightly less than that
of the Argentine; and like the latter, Canada is a country in process
of formation. A similarity which completes the comparison is that the
exports of Canada consist principally of the products of agriculture and
stock-raising. Her principal client for wheat is England; in 1906-1907
the harvest was 84,470,000 bushels, and 41,033,000 bushels were exported;
or almost exactly half.

Here we should remark that the Canadian Government is making every
effort to increase the population, and spares no pains to attain its
object. In contrast to what has been done in the Argentine, where the
public lands have only served to form _latifundia_, and to enrich a few
individuals, the soil in Canada is sold by the aid of accurate maps,
which are accompanied by a mass of information upon questions that may
interest prospective colonists; more, the purchaser is given all kinds
of facilities for payment, as well as for meeting the first expenses of
installation. Thanks to a rational and active propaganda, immigration is
abundant; the figures for 1903 were 128,364, compared with 112,671 in the
case of the Argentine. Finally, Canada contains 19,500 miles of railways,
as against 13,600 in the Argentine.

From the foregoing data we may conclude that the countries capable of
exporting wheat are far from numerous, and that the area sown with
cereals throughout the world is comparatively small. Hitherto wheat has
been grown on an extensive scale in the United States, Russia, and India;
the agriculturalist demands everything of the soil and gives it nothing,
so that the alternative will soon arise of losing the harvest, or of
restoring fertility to exhausted soils, by means of costly manures which
will absorb enormous sums. Then the legend of new countries will have had
its day.

To resume: there exists an enormous discrepancy between the needs of the
consumer and the production of wheat; and the Argentine Republic, thanks
to a concatenation of favourable economic and physical circumstances,
is certainly in the best position in a great measure to supply this
deficiency. But to obtain the desired result it is indispensable that she
should still increase her population, and that the colonist should find
upon the hospitable Argentine soil not only the guarantees of liberty and
justice, but conditions propitious to his evolution as a land-owner.

                              CHAPTER III


The transformation of the; old “estancia”——The principal
    stock-raising establishments: description, extent, number of
    heads of cattle and favorite breeds——The great “estancias” of
    the South and Patagonia.

Approximate area of the soil devoted to cattle and sheep; general
    estimate of the numbers of cattle and sheep——Results of
    the census of 1908——The capital represented by Argentine

Having spoken of agriculture and its future, we must mention another
industry, which is the second source of national wealth——the pastoral

As a result of the rapid rise in the value of land, and the
multiplication and selection of animals, the old form of Argentine
stock-raising is undergoing, at the present time, a profound modification
throughout the country. The traditional ranch or _estancia_, on which
the animals browsed at will on vast prairies enclosed by wire fences,
exposed to all the variations of the weather and all the vicissitudes
of the temperature, feeding only on the grass of their pastures.
This old type of estancia is gradually disappearing; is undergoing a
transformation into carefully-managed farms, on which artificial prairies
are constructed; farms with lucerne fields of 12,000, 25,000 or 50,000
acres, surfaces difficult for a European to conceive.[53]

[Footnote 53: A field of 12,000 acres would be, for instance, 4 miles
wide and over 4-1/2 miles long; one of 25,000 acres, 6 miles wide
and 6-1/2 miles long; one of 50,000 acres, 7 miles wide and 11 miles

The science of pedigree herds and the culture of carefully-enclosed
pastures have created, says a distinguished writer, the true pastoral
_industry_, in which stables and barns and sheds take the place of the
ancient “corral.”[54] The wealthy owner drives from the railway station
to his estancia in a carriage; the old rustic ranch-house is transformed
into a true country-house, sometimes a veritable _château_, with a park
and gardens. There are estancias within a hundred leagues of Buenos
Ayres which we remember as desert country in the power of the Indians,
where now traps and carriages of English type are seen crossing the
plains, where folk dine in evening dress in luxurious homes. The European
stock-breeders have driven back the Gaucho to the great estates on the
borders of the desert.

[Footnote 54: _Cf. Costumbres y Creencias populares de las Provincias
Argentines_: A lecture by M. P. Groussac at the World’s Congress at
Chicago, June the 4th, 1893; published in _La Nacion_ of the 23rd of
October 1893.]

Nothing would be more difficult——and for our part we renounce the
task——than to say which are the first stock-raising establishments of
the Republic; whether by reason of their extent, the numbers and the
breed of their animals, or the magnificent dwellings of their owners.
Establishments of this type are to be counted by hundreds, by thousands.

Nevertheless——though exposed to the danger of falling into inevitable
errors or omissions, for lack of precise information——we must not forget
to mention the _Estancia San Juan_, founded by Señor Leonard Pereyra,
at a distance of 25 miles from Buenos Ayres, and a mile and a half from
the La Plata, and consisting of over 40 square miles of meadows in full
luxuriance. Then there is the _Estancia San Jacinto_, belonging to Señor
Hugel T. de Alvear, an establishment reputed as one of the foremost
in the country, which embraces an area of 244 square miles, or about
one-third the area of the county of Surrey. Of this enormous area some
64 square miles are under lucerne, and support 100,000 Durham cattle,
100,000 Lincoln sheep, and 10,000 horses.

The _Estancia la Gloria_ of Santamarina & Sons, situated at Laprida, in
the Province of Buenos Ayres, comprises 145 square miles, and supports
20,000 cattle and 60,000 sheep.

Another establishment, which might be taken as a model, is the _Estancia
San Martin_, the property of Señor Vincent L. Casares; which is situated
at Cañuelas, and covers an area of some 30 square miles. The specialities
of this establishment are the breeding of draught-horses——Morgans,
Hackneys, Shires and Clydesdales; the breeding of cattle——Durhams,
Holsteins and Swiss——of which the finest individuals are kept for
breeding, and the second-grade animals fattened for export; the keeping
and selling of bulls of the three varieties named for general breeding
purposes; and finally the breeding of pedigree rams of the Lincoln
and Negrete breeds, and also of pure cross-breeds and of pure-blooded
Yorkshire pigs. The horses from this estancia have a merited fame
throughout the Argentine, and are even beginning to be known abroad.

A portion also of this estancia is an establishment known as _La
Martona_, which alone supplies three-quarters of the milk consumed in
Buenos Ayres, and which also manufactures butter for home consumption and
for export.

Another of the great stock-raising establishments of the Republic is
the Señor Carlos Casares’ _Estancia Huetel_, about 150 miles from
Buenos Ayres, on the Southern Railway. It occupies an area of some 240
square miles, all enclosed by wire fencing, and divided into forty-two
stock-raising establishments, with fifty-seven shepherds’ houses and
five managers’ houses. This establishment contains about 62,000 Durham
cattle, 87,000 Lincoln sheep, with pedigree rams, imported or born on the
estancia, and 4200 Clydesdale horses, draught-horses and saddle-horses.
About 11,000 acres are sown with lucerne, and 5000 with maize, wheat,
oats and linseed. There are fifty-six or more imported bulls, and notably
one of the finest of his race, the celebrated Aguinaldo, winner of the
first prize awarded by the Agricultural Society.

The park of this estancia draws the attention of visitors; it is 500
acres in extent, and contains some 520,000 forest trees, 870,000 shrubs,
and 35,000 young trees. The total number of trees on the estate is over 2

There is a school on the estate, all the expenses of which are paid by
the proprietor.

The _Estancia San Jacinto_, owned by Señor Saturnin J. Unzue, also merits
a special description. It is a few hours distant from Buenos Ayres,
and covers an area of some 55 square miles. It supports 10,000 cattle
and 30,000 sheep. On this estancia the Durhams have been brought to a
great pitch of perfection. The stud is famous for its saddle-horses, and
contains 140 pedigree animals, imported or born in the country.

_Las Palmas_, belonging to Colonel Alfred T. Urquiza, would figure as
a model establishment in any country in the world. In the Province
of Buenos Ayres, in which it is situated, it would be difficult to
find a pedigree stock-raising establishment so well organised, and so
well adapted to its purpose. The estate consists of some 4000 acres,
overlooking the majestic Parana de las Palmas, with its green islands,
which reach as far as the Rio de la Plata. Here about 3000 beasts are
annually fattened for export. The cattle are shorthorns, and the horses

Yet another establishment, which must be reckoned one of the best in the
Argentine, is the _Cabaña San Gregorio_, belonging to Señor Gregorio
Villafañe; an Argentine who in strict justice ought to be mentioned as
one of the first breeders in the country, on account of the intelligent
efforts and pecuniary expenditure devoted by him to improving the breeds
of cattle, sheep, and horses, during many years of personal labour.

Señor Villafañe’s establishment is not of very great extent, its area
being only 18,000 acres, but is notable for the great number of its
pedigree cattle and the purity of type to be observed in his sheep. He
devotes himself chiefly to breeding Durham and Hereford bulls, Lincoln
rams, Hackney and Clydesdale stallions, collie dogs, fox-terriers, Brahma
fowls, Catalans, Dorkings, and Plymouth Rocks.

We must also mention the _Estancia San Pascual del Moro_, the property of
Señors Adolfo and Rufino Luro. It is famous for its stud of race-horses,
from which issued, in 1904, the great winner of the season, Old Man.

This long list of breeding establishments would still be incomplete
indeed, did we fail to make special mention of the _Estancia Chapadmatal_
of Señor M.-A. Martinez de Hoz, who has made the greatest efforts to
raise his establishment to the level of the best European models.

“Equal to the best in Europe,” was the judgment of a competent and
impartial observer, Colonel Holdich, who, in his last book, entitled _Los
Paises del Fallo del Rey_, bestows upon it this well-merited praise:——

“A well-known estancia, that of Señor Michel-Alfred Martinez de Hoz,
near the Mar del Plata, surprised me by the singular character of its
surroundings. The soil, with its irregularities, had the look of an
English park. Little hills and knolls, one after another, stretched
away, covered with their golden harvest, with soft undulations, to the
precipitous borders of the sea; instead of the eternal barbed-wire fence,
living hedges were already springing up, dividing the fields and the
pastures. On the highest hillocks rose stacks of oats, carried up from
the fields in the high-wheeled wagons characteristic of the country-side;
and there the stacks were being rapidly built by hand-labour. It was a
beautiful rustic scene.

“Lower to the right, on the softer soil by the banks of a stream, which
descended babbling to the sea, through beds of rushes and buttercups,
was a pasture; here, standing in the branches of the bank, were the
Shire horses; they formed animated groups, and placidly watched our
movements; they were the most magnificent examples to be found out of
Lincolnshire. Further down still, on drier soil, was a troop of mares,
of an English-Creole cross, with their foals. These animals were for
draught, and the excellence of their breeding is proved by the registers
of the Argentine Rural Society, which record the prizes awarded to the
_Estancia Chapadmatal_.

“In a higher part of the estate, in a quarter reached through long
avenues of poplars, which lead thither from the house, and where the
ground is covered with forests of eucalyptus or willows, are the bulls
and cows. The Argentine stock-breeder does not consider expense when it
is a matter of importing good English cattle for breeding purposes. The
chief estancia has a series of breeding bulls, which are led before the
visitor, each by his special keeper, with the same pomp and ceremony as
the stallions which precede them in the brilliant review. It is not only
near the capital and the principal centres of population that we find
these model estancias, which afford their owners every European comfort.
They are to be found also in the extreme south of the country, in the
solitudes of Patagonia, near the 50th degree of south latitude.”[55]

[Footnote 55: _Cf. Annales de la Sociedad Rural Argentina_, No. 4, 30th
April 1902, p. 159.]

“From the River Coyle, from Puerto Gallegos and Magellan Straits, to
a point near Last Hope,” says an Argentine traveller, Mr George J.
M’Lean, who visited these regions a few years ago, “the country is
fairly peopled, and one comes across estancias, such as _El Condor_, the
property of Messrs Wood & Waldron, an establishment of 337,500 acres,
with a wire-fenced enclosure containing 160,000 sheep, equipped with
forty steam shearers, with hydraulic presses, and sheep-dips warmed by
steam calorifier. It is a common thing to find estancias, many of which
are fenced with wire, feeding 40,000, 60,000 or 70,000 sheep. The most
important are united by telephone, by which means they communicate not
only with each other, but with Puerto Gallegos or Punta Arenas. I have
spoken down these over a distance of 300 miles. In the Chilian portion
of Tierra del Fuego, there is a telephone connecting Cape Dungeness with
Punta Arenas, and also to the channels of Last Hope.”

In the Territory of Santa Cruz is the _Estancia San Julian_, belonging
to the San Julian Sheep Company. This “estancia” has an area of 296,000
acres——462·5 square miles——and contains 70,000 sheep, with an annual
yield of 90 per cent. of lambs, or 63,000.

In the same Territory is another very prominent estancia, the property of
the Patagonian Sheep and Farming Company Limited. This embraces an area
of 471,000 acres——734 square miles——the area of a medium-sized English

Finally, in the same Territory is a vast property of 700,000 acres——1060
square miles——belonging to the Bank of Antwerp.

In the Territory of Chubut, which for some years has been a favourite
locality for European capital and European immigrants, and which contains
a large French colony, there is a very important estancia belonging
to the Lochiel Sheep Farming Company Limited, which covers an area of
327,000 acres, and contains 35,000 sheep.

Another foreign company established in the southern part of the
Argentine, “The Argentine Southern Land Company,” possesses 1,518,000
acres of land, of which 859,000 are in the Territory of Rio Negro, and
659,000 in that of Chubut. This company was established in 1899, with a
capital of £230,000, later reduced, on account of business misfortunes,
to £140,000, which is the present capital. On this company’s lands are
45,000 cattle, 40,000 sheep, and 4300 horses.

In all these establishments, and in many others which we are unable to
cite, as it is difficult to obtain precise information concerning them,
we find that, thanks to the intelligent efforts of their owners in
seeking to import the best breeds of the most famous European breeding
establishments, there are now many stallions, bulls, and rams of the
purest blood and of great value, which are either imported or selected;
and through these the general stock of the country has reached a very
high quality of race.

All stock-breeders, even the smallest, are aware to-day of the great
advantages to be obtained by crossing selected animals with sires of
pure blood, and the result has been a great advance in the stock-raising
industry. The statistics of importation show that in nine years, from
1899 to 1907, plus eleven months of 1908, there have entered the country
from England, where the Argentine breeder usually seeks his stud animals,
10,040 bulls and cows, and 35,094 sheep. These two figures alone show
the importance which the Argentine breeder attaches to the improvement
of the breed of his flocks and herds. The prices paid for these animals
are sometimes extravagant; in one case £3520 was paid for a bull; but
land-owners willingly pay such sums in the certainty that such sires will
bring them considerable profits.

The area at the disposal of the Argentine stock-raiser is still
practically unlimited. We need only remember that of the 750 millions of
acres which roughly represent the area of the Argentine soil, one-half,
or some 375 millions of acres, are adapted to stock-raising.

Of this enormous area some 185 millions might be sown at once with
cereals and fodder, notably in the coast Provinces, in Córdoba, and the
Pampa, and there remains as much more for stock-raising, without taking
into account the millions of animals that might be nourished by intensive
culture in the cultivated zone. This extension would allow of the
existence of 40 million cattle and 200 million sheep.

            _Results of the Census of Stock taken in 1908_

What is the amount of stock at present in the Argentine Republic? We are
in a position to answer this question, one of the present writers, Señor
A. B. Martinez, having been appointed Director of the last agricultural
and pastoral census, which was taken during the first fortnight of May
1908, according to a law passed by Congress. The work which sums up the
results of this important undertaking is in three volumes, and is at
present in the press; thanks to which fortunate circumstance we are able
to anticipate its publication, and to give our readers the benefit of
this investigation.

The census of agriculture and stock-raising, undertaken over the entire
territory of the Republic, has revealed the existence in Argentine
territory of 29,116,625 cattle, 7,531,376 horses, 465,037 mules, 285,000
asses, 67,211,754 sheep, 3,945,086 goats and 1,403,591 swine.

If we compare these results with those of the two previous censuses, that
of 1888 and that of 1895, we obtain the following table:——

  CENSUS.      Cattle.     Horses.      Sheep.       Swine.
   1888      21,963,930   4,262,917   66,701,097     403,203
   1895      21,701,326   4,445,859   74,379,562     652,766
   1908      29,116,625   7,531,376   67,211,754   1,403,591

We see from these figures that in twenty years, between 1888 and 1908,
the number of cattle has increased by 7,152,695 head; and in thirteen
years, between 1895 and 1908, by 7,415,099 head. The number of horses has
increased by 3,268,459 between 1888 and 1908, and by 3,085,517 between
1895 and 1908. Sheep have increased by 510,657 between 1888 and 1908, but
decreased by 7,167,808 between 1895 and 1908. Swine, far from numerous
if we compare their numbers with these obtained from other countries,
present a continual increase: 1,000,388 between 1888 and 1908, and
750,825 between 1895 and 1908.

The decrease of 700,000 in the numbers of sheep in thirteen years is
in keeping with what has been observed in the principal wool-producing
countries. Authorities assure us that of the 400 millions of sheep
which existed in various parts of the world in 1873, there remain to-day
barely 300 millions. In Germany, for instance, to go by the _Journal
des Économistes_, the number of sheep has dropped from 19 millions to 7
millions in a space of twenty-five years.

The causes of this constant diminution are numerous. First of all
we will take the development of agriculture, which has expelled the
sheep. According to an eminent collaborator in the census, “The sheep
has to walk, must walk far and wide, must walk always, in order to eat
sufficiently——unless he does so, his food will be too costly; he is
essentially a vagabond, and he consequently requires a great space and
continual supervision.”[56] For these reasons the European small farmer
prefers, if he can, to keep one or two cows in his cow-shed and suppress
the sheep entirely.

[Footnote 56: Probably the sheep would pay better if kept more as cattle
are kept. The theory of long marches only applies to enormous flocks, so
thick upon the ground that they must walk miles a day, eating all the
time. If the whole herd of sheep on a large sheep-farm were divided into
many small flocks, and the farm into, say, ten times as many pastures,
each flock might be turned for two days into each pasture, so that it
would have three weeks’ growth on it before the flock returned: or, if
large enough to feed the sheep twenty days, it would have twenty weeks in
which to recover——time to grow a crop of leguminous fodder, after which
a splendid crop, or series of crops, of cereals could be grown upon it.
Under such a system the sheep would wander less, fatten quickly and be
more tender. English sheep-farming is on an infinitesimal scale, but the
profits from a small flock changed from pasture to pasture are often very

Sheep-breeding really gives encouraging results in regions where the
area of the soil and the prairies is out of all proportion to the number
of labourers available for its culture. Land given up to sheep cannot
support the high rents paid by the producers of cereals; this is the
principal cause of the decline of sheep-farming all the world over.[57]

[Footnote 57: Other causes are: the invention of mixtures of cotton
and wool; the use of silk and mercerised cotton; and the production of
cellular or netted cotton and linen underclothing, which is healthier
and cheaper than wool, and equally warm; also the improvement of
wool-bearing breeds, through which fewer sheep will produce the same
quantity of wool. The export of cheap beef from America is another active

The following table gives the total number of beasts of various kinds,
classed according to purity of breed:——

  Species.     Pure.     Cross-bred.     Native.       Total.
  Cattle      984,897    13,060,446    13,071,282    29,116,625
  Horses       49,000     1,693,037     5,788,739     7,331,376
  Mules         ——            ——          465,037       465,037
  Asses         ——            ——          285,088       285,088
  Sheep     1,179,482    55,448,749    10,583,523    67,311,754
  Goats         3,321       129,800     3,816,965     3,945,086
  Swine        34,462       589,126       780,003     1,403,591

In the matter of cross-breeding the Argentine has made astonishing
progress, the proof of which is to be found in the comparison of the
figures for 1895 with those of 1908. It is enough, for our purpose,
to mention that in 1895, in the Province of Buenos Ayres, out of 100
cattle, 6 per cent. were of pure blood: 49·2 per cent. were cross-bred,
and 50·2 per cent. were of native breeds; and that thirteen years later
these figures were transformed into 6·2 per cent. of pure blood, 85·1
per cent. of cross-bred cattle, and 8·7 per cent. of native breeds. This
improvement in the Province of Buenos Ayres is repeated in the other more
productive Provinces, and in the case of other species of animals.

We have stated that the number of cattle in the Argentine Republic is
over 29 millions; this number may be analysed, according to sex, age,
etc., in the following manner:——

                              _Year_ 1908.

  Male calves           3,820,443
  Heifers               3,511,412
  Bulls                   886,450
  Bullocks              4,687,027
  Cows for breeding    12,825,904
  Milch cows            2,163,900
  Oxen                  1,221,489

It now remains to consider the value of the animals registered as
existing in the Republic in the year of census 1908.

In 1895 this value was estimated at 1,136,780,411 piastres (paper), which
with the exchange at 300 per cent. was equivalent to 378,926,803 piastres
(or dollars) in gold, or £75,785,360, 12s., while the latest census gives
a value of 1,481,282,245 piastres in paper, which with exchange at 2·27,
is equivalent to 651,764,187 piastres in gold, or £130,352,835.

If now we analyse these figures, dividing them among the various species
of animals, as given by the censuses of 1895 and that of 1908, we obtain
the following table:——

  Species.           1895.                  1903.
  Cattle          £44,568,493            £82,604,353·4
  Horses            5,099,281·4           18,112,761·4
  Mules               666,159·6            1,985,374·6
  Asses               131,914                251,235
  Sheep            24,525,101             25,287,598·6
  Goats               389,139                732,322
  Swine               405,272              1,379,192
                  -------------         --------------
                  £75,785,360           £130,352,837

We see from this that, in spite of the moderate valuation of the stock in
1908, its value had increased, in thirteen years, by nearly £54,600,000.

Knowing the numbers and the value of the live stock of the Argentine
Republic, a last question arises of the highest interest. What place does
the Argentine hold among those nations in which stock-raising has reached
its highest development?

To answer these questions, we have resorted to the most authoritative
publications available, with the result that we are enabled to draw up
the following table:——


       States.                     Cattle.      Horses.      Sheep.       Swine.
  The Argentine Republic         29,116,625    7,531,376   67,833,112   1,403,501
  The United States              69,438,758   21,216,888   61,837,112  64,694,222
  Canada                          5,376,451    1,577,493    2,510,239   2,353,828
  Australia                       9,349,409    1,765,186   83,687,653     813,569
  Cape Colony                     2,000,000      300,000   11,800,000     400,000
  India, Burmah, E. Indies, etc. 91,700,000    1,300,000   18,000,000      ——
  European Russia                39,000,000   22,600,000   42,900,000  11,200,000
  Germany                        20,600,000    4,300,000    7,700,000  22,100,000
  France                         14,000,000    3,200,000   17,500,000     700,000
  Austria                         9,500,000    1,600,000    2,000,000   4,700,000
  Great Britain                   7,000,000    1,600,000   25,400,000   2,700,000

This table shows us that, in the matter of cattle, the Argentine Republic
holds the third rank; it is also in the third rank in the matter of
horses; in the second rank in the matter of sheep; and in the matter of
swine she holds one of the lowest ranks.

If we compare the Argentine with the United States in particular, the
contrast is striking; while in North America the value of all bestial
reaches the colossal sum of £664,800,000, in Argentina it amounts only to
£130,400,000, distributed as follows:——

                   Numbers.                      Values.
           /------------------------\  /--------------------------\
  Species.    United      Argentine         United      Argentine
              States.     Republic.         States.     Republic.
  Cattle    69,438,758    29,116,625    £315,660,088   £82,604,353
  Horses    21,216,888     7,531,376     218,601,571    18,112,761
  Sheep     61,837,112    67,211,754      35,571,250    25,287,598
  Asses        111,450       285,088       1,412,307       251,235
  Mules      3,445,029       465,037      43,239,035     1,985,374
  Swine     64,094,222     1,403,581      49,657,202     1,379,192
  Goats      1,949,005     3,945,086         707,865       732,322

Consequently the Argentine is far from achieving the wonderful results
obtained by the great northern Republic of America;[58] for that matter,
she could not compare with the States, having only 6,000,000 inhabitants
to the latter’s 86,000,000; and her wealth is equivalent only to a small
fraction of the colossal wealth of the States. Yet an examination of the
above figures is encouraging, for in view of the progress accomplished
before the previous census, the Argentine may justly regard her flocks
and herds with pride, and continue to increase them, thanks to her
climate, the fertility of her soil, and the energy of her inhabitants.

[Footnote 58: It must be remembered that of two beasts of equal purity
of breed, and in perfect condition, the Argentine would be reckoned
as being of the lower value. The reason of this is economic and very
simple. The Argentine bullock is affected by competition and pays tribute
to the breeder, the railway company, the refrigerating company, the
shipping line, the European buyer or salesman, and the retail salesman.
Consequently it is worth less in the Argentine than in the States, where
the selling-price is artificially inflated, and where the value of a
beast to the breeder, since he has only to pay freight and the profit of
a large company, which is sometimes the breeder and the railway company
too, is naturally far greater. It must not therefore be supposed that
because the Argentine horse or bullock is cited as of lower value, that
it is inferior. Its value is lower, just as good land in the Argentine is
cheaper than in New York State.——[TRANS.]]

                               CHAPTER IV

                         THE VALUE OF THE SOIL

Difficulties in estimating this value——Principal factors of
    valuation——Examples taken from lucerne fields and the forests
    of quebracho——Despite adverse circumstances, and with a few
    exceptions, there has always been a tendency for the price of
    land to rise——Alienation of lands acquired by conquest from the
    Indians; their enormous present value——The rise of value dates
    from 1902, and has hitherto continued without relapse——The
    causes of this rise, and its rational principles, according to
    an authoritative opinion.

Examples of valuation drawn from the sales of public lands——The
    rise of prices in the Provinces of Buenos Ayres, Córdoba, Santa
    Fé, and the Pampa, with figures indicating the prices realised
    in some large recent transactions.

Nothing is more difficult than to determine the value of land in a
country in the course of formation, like the Argentine Republic, in which
it undergoes considerable increase from one moment to another; not only
on account of general progress, but also from special reasons, such as
good harvests, the construction of a railroad, etc. In the same region,
in the same district, two neighbouring tracts will often have a different
value, accordingly as they have or have not a permanent water-supply, or
as they are more or less adapted to agriculture, nearer to or further
from a railway, a station, or a centre of population.

For some years now, two new factors of valuation have come into being:
the culture of lucerne and the planting of quebracho wood.

Since farmers have known of the enormous——the fabulous——profits to be
derived from fields of lucerne, every buyer of land inquires first of all
if there is water available; that is, if the subterranean water-level is
near the surface; as on that factor depends the existence of the lucerne
pasture for many years.

If upon investigation it is found that there is water the land, by this
sole fact, acquires an enormous value in comparison to what it would be
worth if it were unfit for lucerne.

An important newspaper, published in Buenos Ayres in the English tongue,
the _Standard_, has shewn that the price of land in Victoria (Australia),
where the acre is worth from £4, 6s. to £9, compared to the prices paid
for land in the Argentine suitable for sowing lucerne (that is, in the
south of Córdoba and San Luis, where there are no invasions of rabbits,
where there is no drought, and which are half-way, so to speak, to the
European markets) proves, by comparison, the low value of Argentine land.
Even when near a railway, such lands may be bought for 17s. 6d. or £1 per

In proof of the above affirmation, the _Standard_ has made the following
calculation: Let us suppose an expense of 6s. 5d, per acre for the
expenses of sowing and cultivating an acre of soil (including sowing it
with lucerne at £2 per cwt.), it follows that the acre costs from £1, 3s.
to £1, 8s., and the square league of 6175 acres (representing the work of
eighteen months) about £7920. Adding £880 for fencing and watering, we
find the price of the square league (9.648 square miles) amounts to some

What, according to the _Standard_, is the profit to be drawn from this
square league? It will fatten some 4500 head of three-year-old cattle,
which may be bought at £4, 8s. per head, and seven months later sold
at £7, 18s. 6d.; this will give a profit of £3, 10s. 6d. per head, or
a gross profit of £15,862. Deducting £7040[59] for expenses (allowing
freight to the extent of 10s. 6d. per head), there remains a net profit
of £8800 per league per annum, or 100 per cent. on the outlay. If such
are the results to be obtained from the transformation of an uncultivated
tract of land into a lucerne pasture, it is not surprising that rural
property is so quickly attaining so high a value.

[Footnote 59: Apparently made up of half the cost of the lucerne pasture,
plus freight and labour; as two sets of beasts can be fattened in a year
or a little over.——[TRANS.]]

In the case of quebracho——a very hard wood which is useful for building
and constructive purposes, and from which an excellent tannin can be
obtained——matters are much the same. Having had experience of the large
profits to be derived from the manufacture of quebracho extract, and
the splendid dividends paid by the companies engaged in the work, men
or business, anxious to invest their capital to advantage, hastened to
acquire forests of quebracho, with the result that the price of such
land suddenly rose to a level hitherto undreamed of. Tracts situated
in the Chaco——a region where quebracho abounds——which were selling a
year previously for £88 the square league of 9648 square miles, rose in
price to £880, and this latter price can by no means be considered as a
definite maximum.

What is true of lucerne and quebracho is also, though on a much smaller
scale, true of linseed or wheat, when after an abundant harvest the
land-owner or farmer procures the requisite capital for the purchase of
the land he has been cultivating and pays a good price for it. There are
here elements which confound all calculations made in advance, and make
it difficult to fix even an approximate value on the soil.

At the present moment there is no basis for such a valuation. A farm
selling to-day at 20s. per acre, may to-morrow sell for 26s., the day
after to-morrow for 32s., and so on, until prices are reached which
astonish the first vendor, and give him the melancholy conviction that he
did ill to part with his land. For this reason, the best thing one can do
to-day is to hold on to the land.

The value of rural and urban property has gone on increasing more and
more rapidly for more than forty years; and although there have been
great fluctuations in prices, the rise has always been constant in the
long run; owing to the increase in the population, the consolidation of
political institutions, the construction of far-reaching railway systems,
the prodigious development of international traffic, and, as a natural
consequence, the great increase of public wealth.

To gain an idea of the entire significance of this increase in values,
we must go back to the more than modest prices of rural property which
ruled before the later development of the upward movement. It is enough
to recall the fact that in 1879, with the object of procuring funds in
support of the expedition which General Roca was leading against the
Indians of the wilderness, an expedition which resulted in the conquest
of 226,800 square miles of territory, the Government offered for sale
an enormous tract of land at the price of £80 the league (about £9 the
square mile), the purchase-money to be payable over five years. But the
devaluation of these lands was so great, and faith in their remunerative
possibilities so inferior, that very few accepted the offer. Many did so
rather as a patriotic loan than as a serious investment. Others did so as
a mark of personal deference towards the men who were at the head of the
Government. But all have been abundantly rewarded, since much of the soil
which they were able to obtain at £35 the league is selling to-day at
£26,000 and £35,000. More than one of the great private fortunes in the
country had no other foundation than this.

This depreciation of rural property continued still unchanged for a dozen
years; so much so, that in order to tide over the crisis before the crash
of 1890, the Government, which so disastrously handled the affairs of
the nation, had the evil inspiration to offer for sale in Europe, by
virtue of the law of October the 15th, 1889, those very 24,000 leagues
of land obtained by conquest by General Roca’s expedition. The sale was
to be effected at the figure of 10 francs per hectare——about 3s. 3d. per
acre!——payable half upon purchase and half at the end of two years. No
limit was set to the powers of purchase of any one buyer; each could buy
just as much as his purse would allow. The law, in palliation of this
incredible operation,[60] promised to apply the whole product of the
sales to the fund for converting the issue of the guaranteed bank-notes
of famous memory. Providence, happily, which more than once has taken
the Argentine under its especial protection, prevented this disastrous
alienation of territory from taking place. Had it been otherwise, the
Republic would have sold for a mess of pottage a magnificent portion of
her territory, a country large enough to house more than one European
nation, and which to-day perhaps would be in the hands of a company or a
foreign government——a new state within the State.

[Footnote 60: It must be remembered that this tract was four and a half
times the size of England!——and this enormous country, in the heart of
the Argentine, was offered for sale to foreigners! The process of buying
it back when the terrible folly of the act was once obvious, would have
been equivalent to making the country tributary for years, and for
enormous sums, to Europe.——[TRANS.]]

The depreciation of rural property continued for some years. Thus,
in 1897, the Government sold by tender to the highest bidder a large
portion of its best lands, at the price of 3750 piastres, or £330 the
square league (about £36 the square mile), payable in five years, with
permission to pay in bonds of the patriotic loan, which then stood at
about 75 per cent.[61]

[Footnote 61: The piastre note, was then worth 1 franc 71——1s. 4·4d.,
or 34·2 per cent. of the par value. It was later fixed by law at 44 per

This situation continued until 1902——a year which saw the settlement of
the old question of the Chili-Argentine frontier; a year of abundant
harvests and enormous development in the stock-raising world; a
development which took shape first in the export of cattle on the hoof
and then in the despatch of great quantities of chilled or frozen meat
to the English markets; a year which also saw the advent of a financial
stability resulting from the “law of monetary conversion,” which gave a
fixed value to paper money, the medium of all commercial transactions in
the interior. Then came a steady and decisive rise in the value of landed
property in general and of rural property in particular.

Since the beginning of this movement the value of the soil has steadily
increased; the last price is always greater than the previous one,
although the latter may have appeared stationary, if not final. This
being the case, we ought to ask whether this general rise responds
to permanent and sufficient causes, or if it is only the result of
capricious speculation, affecting landed property now as at another time
it affected paper money.

In reply to this question, Señor Roman Bravo, one of those Argentines who
are most familiar with all the complex aspects of land valuation,——for he
is the Director of the house of business[62] which transacts the greater
proportion of such operations——has at our request summed up, in the
following terms, the causes which at present determine the increase in
the value of property:——

[Footnote 62: The sales by auction conducted by this house during the
first six months of 1905 amounted to £2,376,000.]

“The economic life of the country offers at each step signs of further
progress. The enlargement of ports, the extension of railways, the
dredging of channels, the development of the building trade in the
chief city of the Republic, all show the spirit of enterprise at present
animating the individual and the people. Commerce and vigorous industries
reinforce these elements of prosperity and welfare.

“But it is in matters of land purchase that we best perceive the material
expansion and the intensity of the forces in action. Without going back
to the year 1904, we have only to consider the transactions of the last
few years to realise that, both in the capital of the Republic and in the
national Territories and the Provinces, the period has been a fertile one
in the matter of transactions in landed property. There has been no more
active period since 1889; and this time the facts have an explanation,
a natural and logical sanction. Agriculture and stock-raising have so
augmented the sources of national wealth that in a few years the balances
in favour of the country have reached the figure of nearly £20,000,000.
This is the effective cause of the increased value of the land: to which
we must add the confidence which we all feel in the gradual development
of the forces which labour has released, to the benefit of public

One of the most surprising examples of the increased value of the soil,
and of the interest awakened by sales of land, is to be found in the
public and official auction of national lands which took place in the
month of April 1905.

These sales were to be effected on account of those who had bought these
lands in analogous circumstances in 1897, and who had not paid for them
during the delay stipulated by the law. The whole surplus over the price
established by the previous sale, less deductions for interest and other
expenses, went by law to the original purchaser. The auctions were
conducted in the presence of a crowd of speculators, capitalists, and
labourers, eager to invest their money in so remunerative a speculation,
since in the Argentine all are convinced that the purchase of the soil is
the best form of saving. The result of the sale was that in many cases
double the original price was obtained; three times the price in some
cases, and in some five times the original price was realised.

In the Territory of Pampa Central an area of 933,680 acres was offered
for sale, the previous price being £49,693; the sale price was £135,297,
representing an average price of £842·6 per league, or 2s. 8·7d. per acre.

In the Territory of Chubut, 265,278 acres were put up to auction, the
original price being £5243·5, and the sale price £25,361·6, or an average
of £590·28 per league, or 1s. 9·7d. per acre.

In the Territory of Santa Cruz an area of 98,800 acres was put up for
sale, the first price being £3391·34, and was sold for £9477·6, or 1s.
10d. per acre.

In the Territory of Chaco, in which especial interest was felt, as the
lands in question bore forests of quebracho trees of great value (the
quebracho industry being then in vogue), higher values were obtained,
representing five times the original sale price. The lands to be sold
in this Territory represented a surface of 123,500 acres, and were
first disposed of for £4948. However, a price of £24,170 was obtained,
representing an average of £1208·24 per league, or 4s. 6·9d. per acre.

In the Territory of Rio Negro 74,100 acres were put up for sale, which
were previously sold for £3058. They realised £8712, or £726 per square
league, or 2s. 4·2d. per acre. The general result of the sale was that
the Government did a splendid stroke of business; but the transaction
was still more to the profit of the fortunate first applicants, who, for
failing to comply before a given date with the conditions established
by law, were rewarded by receiving the price of sale less the price at
which they bought; sums which to many of them represented a considerable

Since that period the value of land has continually increased, as we see
from the following information, which was given us by the “General Bureau
of Lands and Colonies” of the Ministry of Agriculture. In 1906 and 1907,
this Bureau sold by public auction a large section of public lands, and
the prices obtained were far higher than those we have recorded above.

In the Territory of Rio Negro, in August 1906, 497,600 acres were sold at
an average price of 9s. 8d. per acre.

In March 1907, 314,974 acres of land, situated in the Peninsula Valdez
(Chubut) found a buyer at 6s. 7-3/4d. per acre.

Numerous sales were effected in 1907 in the Pampa Central. Among others,
we may cite the following: 18,520 acres sold at 10s. 6·7d. and 4640 at
10s. per acre; a lot of 18,750 acres at an average price of 6s. 9·7d.;
7500 at 6s. 5d.; 151,410 acres at 4s. 4.8d.; 1235 acres at 3s. 7·6d.; and
12,350 acres at 3s. 11·3d. per acre.

In October of the same year, auction sales were held in various portions
of Pampa Central, the results being as follows: 16,425 acres at 8s.
10·24d.; 5390 at 8s. 2·3d.; 40,137 at 10s. 3d.; 24,700 at 7s. 4·3d.;
306,050 at an average price of 3s. 8·5d.; 24,700 at 3s. 7·8d., and 9182
at 6s. 7·8d. These examples are given to show the variety of actual
prices, according to the situation and the yield of the land.

In the matter of private sales, it is difficult to keep track of rising
values on account of the number of sales which take place every day. We
will try, however, to give a few examples, to arrive at some approximate
value of the Argentine soil in the year 1905.

The Province of Buenos Ayres, which is the most thickly populated and
the wealthiest in the Republic, is also that in which rural property has
reached its highest value. In the district of Lobos, a few hours from
Buenos Ayres, a field of 170 acres, known as the Atucha Meadow, was sold
for £26, 7s. 2d. per acre; another of the same area for £59, 8s. 9d. per
acre; another of 635 acres for £12, 1s. 0d. per acre, and another of 587
acres for £14, 4s. per acre.

In the region of Rojas, also some hours from the Federal capital, the
land on which stood the “San José,” “Santa Barbara,” and “La Matilde,”
establishments belonging to Señor Roberto Cano, and whose area was 15,800
acres, was sold for an average price of £8, 8s. per acre.

In the neighbourhood of Dolores, not far from Buenos Ayres, a meadow
belonging to the “Montes del Tordillo” estate, composed of 18,850 acres,
was sold for 19s. 1·4d. per acre. In the section of Lincoln 10,000 acres
were sold at prices varying from 48s. to £5, 2s. per acre. At Trenque
Lauquen, one of the belts of land in Buenos Ayres which has seen the most
rapid rise in values, sales have been effected of 22,000 acres at prices
rising from £1, 18s. to £3, 6s. per acre, the average being £2, 8s.

In this same section, some 8 miles from the railway station of Primera
Junta, 1976 acres were in 1907 sold at prices varying from £2, 8s. 3d.
to £5, 12s. 9d. At General Pinto the land belonging to the “Filadelfia”
estate, 23,198 acres in extent, was sold at an average price per acre of
£2, 2s. 9d.

In the department of Olavarria 19,856 acres were sold in 1908 for prices
varying from £3, 7s. 8d. to £7 per acre, the average being £5.

In the department of General Conesa, 11,085 acres, facing the Bay of São
Borombon, and 23 miles east from San Dolores, found a buyer at an average
price of £1, 3s. 4d. per acre. In the department of Coronel Pringles, the
establishment known as El Bombero, situated some 19 miles to the west of
Tres Arroyes, divided into thirty-one lots of from 370 to 4940 acres, was
sold at prices running from £2, 1s. 1-1/2d. to £4, 2s.

Among these sales of 1908 which attracted most attention were those
transacted in the Province of Buenos Ayres. These included a tract at
Exaltacion de la Cruz of an area of 914 acres, near the railway station
of Cardales, which, sold in small lots of from 58 to 180 acres, obtained
an average price per acre of £29.6 per acre. At Lomas de Zamora the land
of the establishment “Santa Ines” were sold to the Sansinena Company for
£13, 3s. 6d. per acre. In the department of Azul, a meadow known as “La
Vanguardia,” of an area of 2080 acres, 11 miles from the town of Azul,
found a buyer at £7, 16s, per acre. The San Miguel estate, near the
Manzanares railway station, subdivided into thirty-six lots, was sold at
an average price of £10, 5s. per acre. On the 19th of August 1908, in the
same department, 741 acres fetched a price of £12, 9s. 2d. per acre. At
General Belgrano, less than 2 miles from the railway station, 3294 acres,
divided into five lots, were sold at prices varying from £8, 11s. to £10,
13s. 10d. A tract of 499 acres about 1000 yards from Jeppener Station, in
the department of Brandzen, was sold at the rate of £12, 5s. 9d. Finally,
at Burzaco, at a distance of 2500 yards from the station, 494 acres of
land attained the fabulous figure of £42, 15s. per acre.

These are high prices in comparison with those ruling formerly, and at
present they are firmly maintained.

The prices of lands suitable for agriculture vary greatly, according
to their distance from the great city of Buenos Ayres or the port of
Bahia Blanca, and their proximity to a railway station; accordingly as
they have water near the surface, and are thus adapted to the growth of
lucerne; and according to the terms of payment granted by the vendors.
There are, of course, other factors as well.

Among many other examples, we will cite the 588,050 acres of land at
Curumalan, ten hours from Buenos Ayres, the property of a syndicate
which bought them in 1903 from Messrs Baring Bros, of London, at a price
of £807,575. Up to July the 1st, 1905, this company had sold more than
247,000 acres of land directly to agriculturalists——Russian for the most
part——at prices varying from £2, 10s. 8d. to £3, 4s. 1d., allowing them a
term of three or four years for payment, plus an interest of 8 per cent,
per annum.

The Province of Córdoba is, after the Province of Buenos Ayres, that in
which the land has most rapidly risen in value. Transactions in rural
property are very numerous and represent an important figure. In the five
years from 1899 to 1903, about 9,386,000 acres have changed hands, and in
1904 alone 3,820,830 acres were sold.

It is difficult to give an account of these transactions by reason of
their number; but to cite only the most important, we may mention a
block of 61,750 acres in the department of Juarez Celman, belonging to
Alejandro Roca, which was sold at public auction in the early part of
1905, at prices varying from 17s. 10-1/2d. to £2, 6s. per acre. In view
of the prices which the buyers realised later, they made a splendid
bargain; none of them sold for less than double what he gave. In the
Union department of the same Province, 59,904 acres were sold at prices
varying from 13s. 3d. to £1, 16s. 11d. per acre.

Another important sale, effected also in the early part of the same year,
was that which took place in the department of Tulumba, fifty miles from
the colony and railway station of Morteros on the Central Argentine
railway. The block sold comprised an area of 20,826 acres, and the
prices obtained varied from 1s. 5.8d. to 2s. 2d. per acre.

In the Province of Santa Fé, the appreciation of land values has of late
years been neither so great nor so rapid as in Buenos Ayres and Córdoba;
the reason being that it was this Province which initiated the colonising
movement in 1856, by the foundation of the Esperanza Colony, so that
its land values had already undergone sudden augmentations in previous
years. In the five years from 1899 to 1903, the sales have amounted to
£5,831,160 acres, and in 1904 to 2,026,420 acres. In the department of
General Lopez 23,487 acres were sold for prices varying between 2s. 4d.
and £2, 18s. 3d.

We may also note a tract of 8204 acres, 8 miles from La Serna railway
station, which in 1908 was sold for £1, 12s. per acre.

The Provinces of San Luis and Santiago de l’Estero were the last to take
part in this movement of appreciation of land values. The former, in
especial, has from this point of view been a revelation to every one. As
soon as it was discovered that the soil of this Province was admirably
adapted to the formation of splendid meadows of lucerne, its value
rapidly rose from 1s. 5-1/2d. to 6s. 5.7d., 12s. 11d., and 19s. 5d.

We must, in particular, mention a meadow known as the “Agualapada,”
98,000 acres in area, which on the 27th of July 1908 was sold at the rate
per acre of 5s. 4d. 53,219 acres of land, some 13 miles from the railway
stations of Nueva Galia and La Fortuna were bought at an average price of
10s. 3d. per acre. In the department of Pedernera 16,043 acres, divided
into five lots, found purchasers at prices varying from 16s. 2d. and £1,
1s. 2d. to £1, 15s. 9d.

But, as we have already said, it is in the Pampa——in that vast country
of 56,170 square miles in area——larger than England——which was
incorporated in 1880, after the expedition led by General Roca——that
the most surprising examples of appreciation are to be found. There all
is undergoing a continual transformation; each year the plough opens
wider furrows for the seed; the sowing of lucerne is rapidly increasing;
stock-raising establishments are to be found in the very confines of the
country; and a large network of railways, in operation, in construction,
or under consideration, promise to surround it on every hand, to
circulate its products and to facilitate exchange. All these wonderful
transformations are being effected under our eyes, day by day; so that it
is not surprising that the value of the soil follows this tide of energy.

In the Pampa Central, of late years, we have seen land suitable for
lucerne, with water 10 to 30 feet below the soil, not far from populated
centres, and with means of rapid communication, fetch prices which
quadrupled those it had touched eighteen months earlier, selling for
as much as £3, 11s. 3d. per acre. In more than one case land which was
bought for £880 the square league was afterwards sold for £8800.

Among the sales of 1908 was one of a meadow of 18,525 acres, six miles
from Utracan Station, which, sold by order of the law, fetched a price
of 17s. 10d. per acre. In another part of the same Territory 7698 acres
were sold in a single lot, on the 1st of October 1908, at the rate of £1,
4s. 7d. per acre. In the Alfalfa Colony, during an auction sale, several
_chacras_, or small farms, attained prices varying from £1, 19s. 3d. to
£2, 2s. 9d. per acre.

By the Catrilo railway station on the Western Railway, situated in
the same Territory of El Pampa, is a field whose owner, M. Mathias R.
Sturiza, was offered £61,600 for it; two years earlier he had bought it
for £5280.

Competent authorities assure us that in the neighbourhood of Santa Rosa
de Toay, the capital of the Territory of the Pampa, the value of the
fields has been shown by recent sales to have increased by 300 per cent.
In the department of Victoria, in the same Territory, fields which a
while ago were offered at 2s. 1.5d. per acre, are to-day selling for £1,
1s. 4d.——ten times that sum.

Such are the chief manifestations of the economic phenomena of the
appreciation of land values; one of the most interesting of the problems
which present themselves to the observer of the modern Argentine
Republic. Is it a true symptom of national vitality, or must we see in
these data the warnings of a period of commercial crisis, characterised,
according to the learned economist Juglar, by the rise of all values and
by frantic speculation?

Events, which unroll themselves amidst our feverish Argentine activities
far more rapidly than in other countries, will not be long in giving us
the answer to these questions.[63]

[Footnote 63: The importance of the sales of rural property is to-day so
great, and speculation so eager, that the prices given here, according
to information gathered barely a few months ago, appear to us already as
ancient history.]

                               CHAPTER V

                        AGRICULTURAL INDUSTRIES

SUGAR-CANE——Area of plantations——Statistics of production——
    Legislation affecting sugar——Consumption.

VINES——Area of vineyards planted——Production, consumption——
    Imperfect quality——Competition of foreign imports.

TOBACCO——Area of plantations——Value of the product——Defective

THE MULBERRY——The culture of the silk-worm might be established in
    the Argentine, but at present exists only in an experimental

MATÉ——Large consumption of this product.——Statistics of foreign
    importation——Districts suitable for its growth.

COTTON——Physical conditions proper to its growth——The first
    favourable results in the Argentine——Its introduction into
    Chaco——Lack of manual labour for the development of this

RUBBER——Existence of rubber plants in the Argentine——An unexploited
    source of wealth.

ARBORICULTURE——On account of the diversity of the climate, all
    fruit-trees can be grown in the Argentine——The various fruits
    cultivated in different regions——Amelioration of the products.
    The trade in fruit——Its development possible on account of the
    inversion of seasons as compared with Europe——Refrigeration
    applied to the transport of fruit——Regions particularly
    suitable for fruit-growing.

Besides the culture of cereals, such as wheat and maize and linseed, and
the important grazing and cattle-breeding industries of the Argentine,
together with their dependent industries, there are other forms of
agriculture and forms of natural produce, some of which have already
attained a great importance, while others are destined to become equally
important in the near future; that is, if the progress of evolution in
the Argentine follows, as there is reason to hope, its natural upward

_Sugar-cane._——Among the agricultural industries the culture of the
sugar-cane assumes the first rank. The cane is cultivated principally in
the Province of Tucuman, in which Province are established the greater
number of the sugar factories existing in the Republic. The cane is
also planted, and flourishes, in portions of the Provinces of Santiago,
Salta, and Jujuy; in the north of Santa Fé, in Corrientès, and in the
Territories of Formosa, Chaco, and Misionès.

Sugar-planting is an industry of considerable antiquity in the Argentine;
but it has attained a remarkable development chiefly in the last ten
years, owing to the high price of sugar and the establishment of numerous
factories equipped with perfected machinery; owing also to the notable
profits which the industry offers.

The result has been an excess of production, which led the industry
into a dangerous crisis, from which it is now in a fair way to recover.
Those who suffered the most were those who had abused their credit by
building expensive factories and laying down costly plant; and those who
had planted sugar in soils unsuited to its culture, or in regions of
unfavourable climate, or where the means of transport were insufficient.

The total area cultivated in 1907 was estimated at about 172,900 acres,
of which 14,029 were in the Province of Tucuman; 11,115 in Southern
Chaco; 6916 in Salta; 3952 in Jujuy, and 2717 in Santiago de l’Estero;
the rest being divided among various other regions of the Republic; these
figures representing an increase of nearly 24,000 acres over those of
1895. These 172,900 acres of cane give an average yield of 30 tons of
sugar per hectare, or 11·727 tons per acre, representing a total yield of
132,160 tons of sugar.

The greatest number of sugar refineries are to be found in the Province
of Tucuman, where there are thirty-two. In the other sugar-growing
districts there are only thirteen, which are distributed as follows:
Three in Jujuy, two in Santiago de l’Estero, one in Salta, one in
Misionès, six on the banks of the Parana River, two in Santa Fé, two in
Corrientès, one in Chaco, and one in Formosa.

The net cost of producing the cane, ready for delivery, is about 5 to
7 centavos[64] per 10 kilograms. Taking as basis a yield of 30,000
kilograms per hectare and a sale price of 12 centavos, the growers would
make a net profit of 140 piastres per hectare; or, with the value of the
piastre note at 2·2 francs, of £4, 2s. 6d. per acre. Thus sugar-planting
is a profitable industry under normal conditions.

[Footnote 64: The centavo is 1/100 or ·01 of the piastre. In metallic
currency it is equal to the American cent, and nearly to the English
halfpenny; in paper it is worth a little over one-fifth of a
penny——·22727 pence.]

The outgoings and receipts on an acre of soil planted with cane may be
estimated as follows:——


  By sale of 12 tons of cane, at 12·8d. per
      cwt.                                       £12 16  0


  _Cost of Planting——_
    Tilling and preparing soil                    £0  9 11
    Lining out and fixing shoots                   0 16  4
    Shoots, preparation, etc.                      0 12  9
  _Cost of Harvesting——_
    Cutting 12 tons of cane                        0 14  2
    Preparing the cane                             0 14  2
    Transport to factory and extras                2 13  5
    Interest on the land, or rent, taxes, and
      redemption                                   1  1  3
                                                  £7  2  0
                                                  12 16  0
                                Net profit        £5 14  0

With an increased consumption of sugar, the culture of the cane will
occupy a far greater area of the belt in which it is already established.
It is, however, limited by the interests of the manufacturers themselves,
who limit production in order to keep up the price of sugar, and so
obtain higher profits; sugar of native preparation being protected by
laws which strike at the importation of foreign sugar.[65]

[Footnote 65: This is an interesting object-lesson in the working of
a tariff. Foreign competition once abolished by the increased prices
of foreign articles, the native manufacturer will always minimise, and
even destroy, the protection afforded by the tariff, by increasing his
own prices. If he cannot do so naturally he will do so by lessening his
output; with the result that sooner or later the tariff will actually
increase foreign imports and still further limit home production.
Obviously the only circumstance under which it can permanently profit
even the manufacturers is this: a tariff so high as to make importation
ruinous; when the home producer will raise his prices until they are
just below the line of unprofitable inflation; which, from the context,
would seem to be the case in the Argentine. The consumer must suffer, and
usually the _employé_.——[TRANS.]]

In 1907 2,498,000 lb. of foreign refined sugar were imported, their value
being £181,755; but on the other hand 140,370 lb. were exported during
the same year.

It is to be hoped that the price of sugar will not fall too low, as this
might bring about the ruin of an industry which is worth encouraging
and preserving: but it is essential, on the other hand, to oppose an
excessive inflation, which would diminish the consumption of this
valuable alimentary product, and would force the consumer to pay the
exaggerated profits of a small number of manufacturers and planters. This
is the inherent peril of excessive protection.

The law of 23rd January 1904 and the regulation of 25th October of the
same year have provided for this condition. One must not forget that all
commerce is conditioned by the law of supply and demand, and that to
avoid overloading the market with produce, production must be limited,
according to circumstances, and in proportion to actual requirements; and
beyond the limit of absorption the productive energies of the country
must be diverted to other cultures or industries, more remunerative and
more certain as to results.[66]

[Footnote 66: See the important work entitled _La Culture des Plantes
Industrielles dans la République Argentine_, by Carlos D. Girola,
published in the _Recensement de l’agriculture et de l’élevage de la
Nation_, Vol. 1. 1908, from which these data are extracted.]

Of all the sugar sold in the Argentine, only part is refined; there is
at present only one refinery[67] in the country; namely, the “Refineria
Argentina” of Rosario. The greater proportion of Argentine sugar is
delivered to the consumer in the form of “moist” or brown sugar, which is
graded according to its colour and the care taken in its manufacture.

[Footnote 67: The thirty-two factories hitherto referred to would
presumably be crushing-mills, where cane is crushed, the juice evaporated
into syrup or molasses and in some cases dried, the product being “raw”

There are in several districts, and especially in the neighbourhood of
Misionès, rudimentary factories where an impure sugar known as “rapadura”
is prepared, which is sold in cubes or tablets. We have no precise data
as to the production of the various grades of sugar.

During the last twelve years the manufacture of sugar has been greatly
improved, as a consequence of the crisis through which the industry
passed, which demonstrated the necessity of perfecting the methods of
preparing and refining the “sap,” etc. To-day a yield is obtained of
7-1/2, 8-1/2, and even 9 per cent. of sugar.

The capital sunk in the sugar industry in the Province of Tucuman amounts
in round figures to £4,136,000, and is distributed as follows: Land,
£1,232,000; plantations, £440,000; machinery, £1,496,000; buildings

It will be as well to give some retrospective data here, which will show
how far the production of sugar has developed during the last few years.
In another chapter we shall deal with the production of sugar from the
industrial point of view.

Thus, in 1884 the harvest was 24,000 tons; in 1894, 75,000 tons; and in
1895 it amounted to 109,000 tons, or an increase of 352 per cent. in
eleven years. In 1904 the yield was 134,000, or an increase of 360 per
cent. over that of 1884. In 1905 it was 137,000 tons; in 1906, 180,000;
in 1907, 113,000.

We have stated that the Argentine Republic underwent a crisis in the
matter of sugar, on account of excessive production; and that like other
sugar-producing nations she has had to facilitate the export of the
surplus by granting a bounty to exportation.

This premium or bounty was conceded in the following manner: a law of
1894 forced the producer to pay 6 centavos per kilogram, or ·576d. per
lb. on manufactured sugar; but offered him a bounty of 16 centavos
per kilogram——1·536d. per pound——on all sugar exported under certain

This law ceased to be in force on the 31st of December 1904; but
was replaced by another, of the 1st of January 1905, by which the
manufacturer who did not export 25 per cent. of the sugar he produced
paid 15 centavos per kilogram——or 1·44d. per lb.——on a quarter of his
produce, or on the proportion which he did not export.

These two laws contain a radical difference. By the first, the State
received 6 centavos per kilogram upon all sugar manufactured, of which
it restored 4 centavos for each kilogram delivered for consumption, and
then restored 16 centavos for each kilogram exported; thus keeping to
a minimum tax of 2 centavos on sugar delivered for consumption. By the
second law the State received nothing on sugar leaving the factory, as
the producer confined himself to giving an undertaking for the value
of 15 centavos per kilogram on a quarter of his manufactures, which
undertaking was returned to him if he exported a quarter of his produce;
so that in case he did export his produce the State gained absolutely
nothing. But according to a resolution on the part of the Government,
passed in April 1905, the tax of 15 per cent. was suppressed, together
with the obligation of exporting a certain percentage of the sugar made.
The sugar industry thereupon entered upon a new period of absolute
liberty, and at the same time was deprived of official protection.
In this matter the Argentine Republic acted in accordance with the
international agreement of Brussels, which suppressed the sugar bounty.

The consumption of sugar during the eight years 1897-1904 was 780,000
tons, or 97,000 tons per annum. This consumption has not actually been
uniform; for instance, in 1897, about 80,000 tons were consumed; while in
1904, 1905, 1906 and 1907, the figures were respectively about 115,000,
162,000, 127,000, and 109,000 tons.

_Vines._——Another important branch of agriculture in the Argentine is
viticulture, which is more especially utilised in the Provinces of
Mendoza and San Juan. To give some idea of the development of this branch
of agriculture we may state that in 1885 80,376 acres were planted with
vines, while to-day the figure is over 139,000. Of this total 74,620
acres are in Mendoza and 30,580 in San Juan. The different species of
grape are selected from the best to be found in cultivation in France and
other vine-growing countries.

The vineyards have been laid out under favourable conditions, yet their
product leaves something to be desired. Moreover, bad wines have often
been put on the markets, sour wines, and wines adulterated with water,
which have discredited the native wines, and have led many to doubt
whether the Argentine wine industry can ever really take root.

The factor which has chiefly contributed to this disastrous result is the
lack of capital from which the industry suffers; the result being that
the processes of fermentation and maturing are not given sufficient time.

Pressed by their liabilities, the Argentine vine-growers hurry over
their wine-making, so as to put their wares on the market as quickly as
possible, in order to meet their engagements. The general result, apart
from exceptions as honourable as few in number, is that the industry
produces decoctions of a kind, but not wines.

Despite these unfortunate conditions the consumption of the wines of the
country has reached a very considerable figure, which fact has greatly
contributed, thanks to very heavy customs duties, to the exclusion of
foreign wines. In 1899, to go back no further, the total consumption of
wine in the Republic was 322,431,166 pints, of which 237,600,000 pints
were of wines of the country, and 84,800,000 of foreign wines (not
including those imported in bottles). In 1900 304,440,000 pints were
consumed; 221,760,000 of native wines and 82,680,000 of foreign wines. In
1901, out of 327,360,000 pints, 242,880,000 were of native and 84,480,000
of foreign wines; in 1904, of a consumption of 373,120,000 pints,
307,000,000 were of native and 66,120,000 of foreign wines.

In 1907 the total consumption of wines in the entire Republic, according
to the office of National Statistics and Administration of Inland
Revenue, amounted to 638,843,680 pints, of which 558,096,000 were of
native production and 100,747,680 were imported.

The production of native wines is limited, as we have seen, to wines for
general consumption. The finer varieties are imported.

The consumption of wines of quality in 1907 reveals a considerable
increase since the previous year; which is yet another proof in support
of the many to be found in this book of the excellent economic and
therefore gastronomic conditions of the country. The large and profitable
results of the harvests enable the people to place fine wines upon their

The customs, which are always a faithful barometer of the degree of
well-being which a people enjoys, afford us a proof of what we have
affirmed. In 1907 there passed through the customs houses, coming from
abroad, 59,520 dozens of bottles of champagne, 1988 dozens of sherry,
plus 31,438 pints in the wood; 6925 dozens of port, plus 113,843 pints in
the wood; 516,520 dozens of vermouth; 27,624 dozens of semi-fine wines;
1249 dozens of French clarets, and 8111 dozens of sparkling wines. The
_vins ordinaire_ imported represented a total of 100,748,680 pints.

As we have already seen, the area of the vineyards in existence at the
end of 1907 was of 139,132,630 acres, their value being £18,400,000. As
for their yield, it amounted to 1,121,523,300 lbs. of grapes, or more
than 518,000 tons, with an estimated value of £3,680,000.

There are, in the Argentine Republic, 3097 establishments devoted to
the exploitation of the vineyards and the making of wine, disposing of
a total capital of some £4,320,000. Their products amount to 66,762,000
gallons of wine, representing a value of £4,720,000.

If we compare the production of the Argentine with that of the principal
nations of the two Americas, we obtain, for the year 1907, the following

  Argentine Republic             556,096,000 pints
  Chili                          475,200,000  ”
  United States                  281,160,000  ”
  Brazil                          56,320,000  ”
  Peru                            17,248,000  ”
  Uruguay                         16,192,000  ”
  Bolivia                          5,576,000  ”
  Mexico                           3,168,000  ”

The Argentine wine industry, in which millions have been engaged, is, as
we see, on the road of progress. It has to-day accomplished a rapid and
a very considerable development, which might well, in the near future,
eliminate the imported product from the market, at least in the case of
wines for ordinary consumption.

Like the sugar industry, the wine-growing industry has gone through
its crisis. On the one hand the abuse made of credit in establishing
warehouses, cellars, and costly plant, and on the other defective methods
of manufacture which brought the product into discredit, produced a
deep-rooted depression, from which the industry has hardly yet emerged.
It cannot look to the future until it perfects its means of preparation,
working out its brands with the aid of time and patience.

This industry, says an eminent writer, gives work to more than 100,000
inhabitants, and represents, as a matter of national wealth, a value
in vineyards and factories of some £19,000,000; it produces annually
£4,840,000 worth of merchandise, contributes £6,950,000 to the general
trade, and surpasses in importance, both in the capital employed and
in its products, the sugar industry of the country, which in 1907
manufactured sugar only to the value of £2,772,000.[68]

[Footnote 68: See _l’Industrie viti-vinicole de la République Argentine_,
by Ricardo Palencia, an essay published in the _Recensement de
l’agriculture et de l’élevage de la Nation_. Vol. I. Buenos Ayres.]

_Tobacco._——For a long time the tobacco-plant has been cultivated in the
Argentine; for we find, in various zones, conditions very favourable
to its production; but its culture has by no means as yet acquired the
importance of which it is capable, and is very far from satisfying the
needs of national consumption.

The exports are insignificant: 37,983 lb. in 1906, and 16,612 lb. in
1907, of the respective values of £539 and £226. The lack of care brought
to the cultivation of the plant and to the preparation of the leaf,
together with incomplete experience from the industrial point of view,
have contributed to check the increase of plantations, which ought to
occupy a far larger area than they do.

Tobacco is grown chiefly in the northern region composed of the Provinces
of Corrientès, Salta, and Tucuman; it is also grown to a less extent in
the Provinces and Territories of Misionès, Formosa, Chaco, Catamarca,
La Rioja, and Jujuy. It may be grown equally well in the central region
composed of the Provinces of Buenos Ayres, Entre Rios, Santa Fé, and
Córdoba; and even further south. There were formerly, and are still,
tobacco plantations in the Province of Buenos Ayres, which appeared
to promise a fair future for tobacco-planting; but all is as yet in a
rudimentary condition, and the industry makes no appreciable progress.

The areas planted with tobacco in 1895 and 1907 were as follows:——

                                               1895.     1907.
                                              Acres.    Acres.
    Province of Corrientès                    16,287    27,910
    Province of Salta                          2,277     8,645
    Province of Tucuman                        6,880     7,410
    Territory of Misionès                      5,705     1,976
    Territory of Formosa and Chaco (South)     1,294     1,235
    Province of Córdoba                        3,348     1,729
  _Other Provinces——_
    Buenos Ayres, Santa Fé, Catamarca          3,631     2,470
                                              ——————    ——————
                                Totals        39,422    51,375
                                              ——————    ——————

The agricultural census of 1895 affirmed the existence of 3348 acres of
tobacco in Córdoba, while the _Bulletin_ of the Division of Statistics
at the Ministry of Agriculture announced only 1729 acres; in short,
everything leads to the conclusion that we have to deal either with gross
blunders or with erroneous information. As it has not been practicable
for us to verify these figures we must suppose that in 1895 there was not
so large an area planted as the figures would lead us to believe.[69]

[Footnote 69: See _La Culture des Plantes industrielles dans la
République Argentine_, by Carlos D. Girola.]

_The Mulberry._——The culture of the mulberry-tree should perhaps be
included in that of industrial crops, since its leaves are the food of
the silkworm.

From the time of the Spanish Conquest, says Carlos Girola, the engineer,
our competent guide in the matter of industrial crops, the silkworm
was raised in the Province of Cuyo, and silk was woven there on the
hand-loom; but, on account of the facilities of transport, imported silks
brought such a competition to bear upon the hand-made native article that
the silkworm industry gradually dwindled and finally became extinct.

Numerous experiments have of late years proved that the silkworm can be
raised over a great part of the country; and that it has the best chances
of development where the population is densest, labour most abundant,
and the houses of the workers largest and most comfortable, as in the
Provinces of Buenos Ayres (North) and Santa Fé, and in parts of Entre
Rios and Córdoba. So far, however, there is no demand for the native
cocoons, and it is so difficult to place them that at present one cannot
recommend the silkworm industry except as an experiment or a speculation.

The mulberry-tree grows and flourishes excellently on the greater portion
of the Argentine soil, and especially in the central and northern
districts, where it springs up quickly and vigorously. It is greatly
to be desired that it should be more widely cultivated, and that its
wider cultivation should go hand in hand with the development of the
sericultural industry, which in some countries constitutes one of the
principal sources of wealth.

The mulberry also furnishes an excellent wood, and its leaves may be used
to feed cattle as well as silkworms. Instead of planting trees which
are of no industrial use, the mulberry should be given the place of

_Yerba Maté._——The “yerba maté,” or maté shrub, is met with in the woods
of Misionès, where it grows in irregular clumps of varying extent. It has
been known since the time of the Jesuits, who were the first to plant and
cultivate it, as is proved by the plantations which to this day exist in
the territory of the Argentine Missions (Misionès). With the leaf of this
plant infusions are made, as with tea, coffee, cocoa, etc. The matheine
contained in the leaves is possessed of properties at once tonic and

The infusion of “yerba maté” is usually made in a receptacle shaped like
a pear with an orifice at the smaller end;[70] it is imbibed by means of
a silver tube having at one end a bulb pierced with holes, which performs
the office of a strainer, and is known as the _bombilla_. This method of
preparation and of use is now tending to disappear; and maté is now often
prepared in the same way as coffee, the result being a very refreshing
drink, very valuable in the country districts for the refreshment of
travellers. Statistics prove that the consumption of maté is continually
increasing; and as the national production is insufficient, recourse is
had to importation from Brazil and Paraguay. The amount of these imports
for 1907 was as follows:——

[Footnote 70: Usually a gourd is used, of either spherical, ovoid, or
pear-like shape, with one end sliced off; it is commonly polished and
carved, often by Gauchos or Indians. Each drinker has his own gourd and
_bombilla_, the latter being necessitated by the use of the leaf in the
form of a powder.——[TRANS.]]

                                           Pounds.      Value.
  Maté imported from Brazil             100,189,162   £1,000,364
  Maté imported from Paraguay             6,654,276       61,182
                                        -----------  -----------
       Total of imported maté           106,843,438   £1,061,546
                                        -----------   ——————————
       Importation in 1906                      £970,154.

We have no information respecting the national production of maté, but we
have every reason to suppose that it does not exceed 11,000,000 lb.; that
is, between a ninth and a tenth of the quantity consumed. There is thus a
vast field of development for this branch of agriculture, especially in
the Territory of Misionès, which offers all the conditions favourable to
the culture of the plant.[71]

[Footnote 71: See _La Culture des Plantes industrielles dans la
République Argentine_, by Carlos Girola.]

Encouraged by these figures, and by the desire to replace the forests of
ilex, destroyed by improvident exploitation, attempts have been made to
develop the culture of maté; and the first results appear to augur well
for the future of this undertaking.

M. Thays, Director of the Parks and Promenades of Buenos Ayres, to whom
we owe the floral and arboreal embellishment of the Argentine metropolis,
was the first to overcome the obstacles to the artificial culture of the
maté shrubs from the seed.

The development of the plant is fairly rapid; the plucking of the leaves
may be commenced at the end of six years, and sometimes earlier: the
treatment necessary for its cultivation is very much that demanded by
ordinary orchard trees. Its longevity is great, and so far it is not
known to be subject to any disease.

The cultivation of maté may spread beyond the Territory of Misionès, into
the favourable soil of Corrientès, Chaco, and Formosa; possibly into
other parts of the northern and central regions; and it may give way to a
more intensive culture. M. Thays has obtained specimens of maté from seed
in the Botanical Garden of Buenos Ayres, where he has grown it in the
open air.

_Cotton._——Of the various territories of the Argentine, none lend
themselves so well as Chaco, Formosa, and Misionès to the cultivation of
the cotton-plant; not only by reason of their climatic conditions, but
also on account of the composition of their soil.

The cotton-plant is indigenous to the islands and sea-coasts of the
Tropics, and its geographical limits of cultivation, on either side of
the Equator, run to 40° of latitude in the north, and in the south to
about 30°, but never as far south as 35° or 40°, in spite of the probable
suitability of those latitudes.

The plant hardly suffers from the greatest heats of a tropical summer,
while very cold weather interrupts its organic functions. It requires a
hot, moist atmosphere for its development, but the moisture must not be
excessive, or the plant will grow too rapidly.

It is doubtless thanks to these natural conditions that cotton-planting
attained to a certain degree of development in the Territories of Chaco,
Formosa, and Misionès as soon as the tillers of the soil became aware of
its profitable nature.

The cultivation of this valuable textile is not, however, new to
this country. It was grown long ago, chiefly in Misionès, during the
administration of the Jesuit Fathers, who made from it cloth for their
own use, and also for purposes of trade. But with the expulsion of
the members of the celebrated Company of Jesus, and the resulting
depopulation of the countryside, decadence overcame this branch of
agriculture, and finally an almost total extinction, until to the people
of the country it was no more than a memory.

Finally, in 1894, cotton was sown as an experiment in the Territory of
Formosa; a few grains of the “Louisiana” and “Sea-Island” types, brought
from the United States.

The results were excellent, and encouraged the sowing of larger areas.
There are now, in the various colonies founded in Chaco, which grow
practically nothing but cotton, some 13,600 acres under cotton. It may
to-day be asserted, says an official report, that Chaco is in the van
of the Republic in the production of cotton; by reason of the area
under cultivation, the quantity of cotton picked at each harvest, and
the importance of its trade with the Buenos Ayres market.[72] In the
short space of two years, from March 1902 to March 1904, the exports
from Barranqueras, the port of this region, amounted to 850,564 lb. of
cotton and 286,831 lb. of cotton-seed. From this we may well augur,
as the above-mentioned report asserts, that Chaco will become a great
cotton-producing country, on condition that various refractory factors
are eliminated.

[Footnote 72: See the notable monograph entitled: _Investigaciones
algodoneras en los territorios del Chaco, Formosa y Misionès, año 1904_,
by the agronomical engineer, Fidel Macial Perez, upon whose data we have
drawn for this book.]

That the reader may form some idea of the future in store, during
the economic development of the Argentine, for the cultivation and
exploitation of cotton, he need only refer to the following calculation
as to its results. The land in Chaco given over to cotton yields, in good
years, an average crop per acre of 1785 lb. of cotton “in the pod”——that
is, fibre and seed together. Selling the cotton at the very low price of
·96d. per lb.——and the present price of cotton runs to 1·16d., 1·44d.,
and 1·65d. per lb.——the minimum yield would be £7, 2s. per acre, even
with prices as low as we have indicated. As for working expenses, they do
not exceed £4, 5s. 6d. per acre, unless by some trifling sum, according
to locality; so that the average profit would be about £2, 16s. per acre.

This is the cost of production of an acre planted with cotton during the
first year. Later the expenses diminish by 25 per cent., so that the net
profit might reach £3, 11s. 3d. per acre.

One of the great obstacles in the way of the full development of this
industry is to be found in the lack of hands indispensable for the minute
and delicate operations connected with gathering the crop. It has even
happened, during the last few years, that in certain districts as much as
3s. 7d. per cwt. has been offered for selected cotton, and in others as
much as a third of the results of the harvest. But we may be sure that
when the native farmer and the foreign agriculturalist once awaken to the
extraordinary profits which cotton yields, its production will assume a
far larger scale.

As the growers have to deal with an industrial branch of agriculture in
process of establishment it has not yet been possible to draw from it all
the profit that is secured in other countries: cotton-seed, for example,
in the United States especially, is a considerable source of wealth,
but in the Argentine the growers have scarcely begun to utilise it by
the extraction of its oil. But there is a beginning: several mills have
lately been established for this purpose. The agronomic expert Macial has
justly remarked that we only require spinning-mills and looms for the
cycle of the cotton industry in Chaco to attain its completion.

_Rubber._——Another source of forestal wealth in the Argentine, and one
which is for the moment unexploited,——principally because of local
depopulation and a lack of means of transport——is the extraction of the
rubber contained in certain tropical plants.

Lately, for example, competent observers have discovered that the true
rubber-plant, the _Ficus elastica_, exists in abundance in the north-east
of the Republic, and in the Provinces of Salta and Jujuy, between 23°
and 26° of south latitude, and 62° and 66° of west longitude. It is this
tree which has given such value to the Brazilian territory of Acre and to
various other regions of Brazil.

Various plants yield rubber: one species, of a family known as
“lecherones,” grows in the darkest and dampest parts of the forest;
others, called “heveas” in Brazil, are much thinner in the stem; and
finally there is a third kind, the “liane” or rubber vine.

The first variety, that of the “lecherones,” gives a yield of 17-1/2 to
22 lbs. of gum per annum; there are forest lands containing as many as
50,000 plants to the square league——over 5000 to the square mile——while
the poorest districts produce 2000 to the league. Considering the present
high prices of rubber, we may obtain some idea of the great wealth of
this region. The method of exploitation is easy and simple; the country
is indubitably healthy, and with labourers paid at the rate of 3s. 7d. to
15s. 9d. a day a considerable profit would remain.

To-day men of initiative are busily seeking to exploit this new source
of forestal wealth, which ought in time to become another centre of
attraction to men and to capital.

_Arboriculture._——There is another kind of culture which is destined in
the future, although at present it has only the smallest importance,
to become an industry of considerable moment; the culture, namely,
of orchard trees, of which we must mention the rapid progress. Given
the immense area of Argentine territory, endowed with the most varied
climates, from the snows of Tierra del Fuego to the semi-tropical heat of
Corrientès and Jujuy; from the temperate warmth of the coast to the more
relaxing temperatures of the mountains of Córdoba or the Andean frontier,
and containing land at all altitudes above the level of the sea, it is
not to be wondered at that all the fruit-bearing trees of the world can
live and flourish in the Republic.

In the northern region, and especially in Corrientès, Tucuman, Salta,
La Rioja, Catamarca, Jujuy, Formosa, Chaco, and Misionès, there are
to-day groves of oranges, mandarins, lemons and limes of various kinds,
figs, and pomegranates. At Tucuman and Salta “chirimoyos” and “paltas”
are cultivated. Almonds, olives, Barbary figs, ananas or bread-fruit,
bananas and “guayabos” may also be grown in this region; but unhappily
the fruit-growing industry is at a standstill, on account of the lack
of labour which is so great a difficulty in all departments of the
industrial and economic life of the Argentine.

In the central region we also find the mandarin or tangerine (in the
north of Entre Rios and Santa Fé), lemons (in Entre Rios, Santa Fé,
and Buenos Ayres), the grape-vine, especially in Mendoza and San Juan,
and also in La Rioja, Salta, Catamarca, Córdoba, Santa Fé, Entre Rios,
and Buenos Ayres. Peaches, prunes, apricots, cherries, apples, pears,
quinces, medlars, and figs are grown in all these districts, and chiefly
in the Province of Buenos Ayres, and the islands of the delta of the
Parana. In the same region we also find almonds, walnuts, hazel-nuts, and
chestnuts, but grown on a small scale only. There is a fair production of
lemons; and the olive grows well under favourable conditions.

In the southern region there is no fruit grown, except on a few estates
in the Rio Negro and in the valley of Chubut. Yet peaches, apricots,
prunes, cherries, apples, and pears will flourish in certain localities;
while walnuts, filberts and chestnuts might be grown on an enormous
scale on the Andean slopes, where the rains are more frequent and the
atmosphere more humid.

Up to the present time, on account of the large profits made by those
engaged in agriculture and stock-raising, and above all on account of the
insufficiency of the population, which is the prime cause of which we
have already spoken, the industry of fruit-farming has been practically
ignored, and what little has been undertaken has followed no definite
plan, such as the careful selection of stocks and slips and saplings, the
preparation of the soil, and the efficient protection of the trees. But
in spite of all, very satisfactory results have been obtained, which have
revealed the fertility of the soil and the excellence of the climate.

But quite lately we have seen a remarkable development in this branch of
agriculture, which seems to promise a fruit-growing industry comparable
to that of other and more advanced countries than the Argentine. To-day,
according to Girola,[73] more care is expended upon the planting and
cultivation of the trees, as the growers have acquired the conviction
that it is better to produce quality rather than quantity, and that
fruit-growing demands, like other departments of agriculture, the careful
selection of varieties at the time of planting; as well as incessant
improvement by means of careful grafting, and the application of special
procedures to the elimination of noxious insects, and the prevention of
parasitic or other maladies.

[Footnote 73: See the chapter _Arbres Fruitiers_ in the _Investigation
agricole_, by C. P. Girola, reproduced in the _Annales de la Société
Rurale Argentine_ for January-February 1905.]

This being the case, it follows that the fruit-farmer is gradually
acquiring rational methods, which will soon attest to their beneficent
influence by transforming the old orchard-plantations, which were with
reason described as forests of fruit-trees, into gardens of carefully
cultivated plants, yielding crops very greatly improved in the matter of
quality and the beauty of the fruit. On the other hand, the sellers of
fruit-trees have at the same time been learning more as to the qualities
of different varieties, and how best to select them, in order to place on
the market those which will secure the largest profits to the grower, and
to propagate the most popular species.

The cultivation of fruit-trees is far from occupying its proper rank
among Argentine industries. It is distributed in an irregular fashion;
some kinds of fruit-trees abound in certain districts and are rare
or unknown in others; and it is impossible for growers in the latter
districts to obtain them at profitable rates, on account of the
difficulty and scanty means of transport.

As for the fruit trade, it has hitherto been very limited, and confined
almost exclusively to the sale of fresh fruit, as with the exception
of the factory of the “Tiger Packing Company” and a few others, which
prepare canned peaches, etc., in syrup, all growers of fruit for public
consumption offer it for sale only in the fresh state.

Yet amid the feverish activity which characterises the present situation
in the Argentine, the fruit trade receives a greater impulse each year;
not only in the matter of home consumption, which has been popularised
by the aid of such companies as the “Co-operative Fruticola,” which
endeavours to supply the consumer with articles of the first quality at
reasonable prices, but also in the matter of export to large foreign
cities. The export of fresh fruit should soon form an important branch of
commerce in the Argentine, as it does already in the United States and in
other countries.

In the matter of a fresh-fruit trade with foreign countries the
Argentine is particularly favoured by circumstances; for on account of
her geographical position she is able to profit by the inversion of the
seasons with regard to Europe; that is, by placing summer fruits on the
European markets in the middle of the northern winter. Another advantage
which the Argentine will enjoy on these markets is the fact that she has
to reckon with no formidable competitors; for those countries that might
dispute her place, such as South Africa, which is situated in much the
same latitude, or Chili, which grows a variety of good fruit, have not
the abundant fertility of the Republic; or if they run her close in this
respect, as is the case with Chili, they are separated from Europe by a
greater distance, which considerably increases the price of transport.[74]

[Footnote 74: And also of refrigeration; the fruit being “chilled,” that
is, kept slightly above freezing point.——[TRANS.]]

Profiting by the admirable physical advantages of the country, once this
trade has obtained the indispensable assistance of rapid and convenient
steamers, with special holds or refrigerating chambers for the storage
of large quantities of fresh fruit, we are certain that it will not have
long to wait for profitable results.

Several years ago one of the authors of this book sent to Messrs
Garcia, Jacobs & Company, of London, as a commercial sample, a batch
of peaches preserved by chilling, and according to the testimony of
these merchants the peaches of Buenos Ayres may well be the subject of
a successful business, provided that fruit of the superior varieties be
produced. Entering into detail, Messrs Garcia & Jacobs added that the
best qualities sent had sold satisfactorily; they ended by stating that
consignments reaching London in the months of March, April, and May
should yield considerable profits.

After this experiment many others were made by various persons, until
finally, thinking the moment had come for establishing the fruit trade
on a solid and lasting basis, the Royal Mail Steam Navigation Company
determined to fit their steamers with special “chilled” chambers or holds
for the transport of fresh fruit.

The first consignments have not been completely satisfactory, as in this
trade, which is now being undertaken on a very large scale, every one
has a great deal to learn; from the producer, who plants the varieties
of fruits which he thinks most suitable for export, the farm labourer,
who gathers the fruit, and the man who packs it in special cases, down to
the steamship company, which has to confide the care of the refrigerating
plant and the holds to a competent technician, whose duty it is to
maintain a constant temperature, appropriate to each species of fruit.
But even under these still imperfect conditions the progress achieved has
been very remarkable, and justifies our assertion that a large export
trade in fresh fruit is perfectly practicable.

The exhibitions of fruit which the Government of the Republic organises
annually, with much practical good sense, have greatly helped to
attract attention to the fruit-growing industry, and at the same time
to stimulate competition and improvement. These exhibitions have been
a veritable revelation to everybody, for very few people suspected
that the Argentine produced so great a variety of the best species of
fruit-bearing trees; or that she could rival other countries in the
matter of production.

The fresh-fruit trade is not, in the Argentine, as it is in the United
States, favoured by the existence of refrigerator cars, placed at the
disposal of the producers by the railway companies, and capable of
transporting enormous quantities of fruit from one end of the country to
the other. But this innovation, like so many others demanded by industry
and commerce, will come in time, when the population has increased, and
new markets will be permanently opened to the producer. At the present
time such fruits as are intended for home consumption, like those
selected for exportation, have not far to travel before reaching their
destination, as they are usually grown near Buenos Ayres; particularly
the peach, which is the fruit most in demand on account of its superior

Although the entire Argentine territory lends itself admirably to the
production of fruit, there are particular districts which by nature are
especially fitted for the plantation of fruit-trees. Among such districts
we may cite the islands which form the delta of the Parana, which are
covered with an extremely rich soil and magnificent growths, and are
irrigated during certain seasons of the year by the waters of the river,
which deposit on them a richly nutritious silt, like that which the
famous waters of the Nile leave upon its Egyptian banks. There flourish a
great variety of fruit-trees, from peach and apricot, pear and apple, fig
and quince, down to the “diospiro kaki,” and many other species.

Another region which has commenced to attract attention by reason of its
magnificent fruits is that of the Rio Colorado; it will one day be as
famous for its peaches and apricots as California is to-day. At a short
distance from Buenos Ayres is another favoured district, producing in
especial magnificent peaches; it is that of the village of Dolores, in
the Province of Buenos Ayres, whose exquisite fruits figure on the best
tables of London and other European capitals.

As we see from these data, fruit-farming is making rapid progress in the
Argentine: it may succeed in time in capturing not only the home markets,
but also the most important foreign markets.

As for the preparation of fresh fruit in syrup, as well as the
manufacture of dried fruits, both of them industries well developed
in the United States, they still exist in the Argentine only in a
rudimentary condition; but in view of the rapid progress achieved each
year in the Argentine, in this as in other industries, we may hope that
they will soon develop and establish themselves securely.

                                PART III

                      AND INDUSTRIAL POINT OF VIEW

                               CHAPTER I

                             FOREIGN TRADE

The important part played by the foreign trade of the Argentine——
    Table of imports and exports during recent years——Explanation
    of their respective movements——Favourable condition of the
    commercial balance.

Method of ascertaining the statistics of exports and imports——
    Errors in evaluation——Notes on the import duties on various
    articles——Variations of the customs duties——Export duties;
    their transitory character——The trade in bullion.

IMPORTS——Their classification according to their countries of
    origin——Value of imports from each country, with indications of
    the principal articles imported——The Argentine dependent upon
    other countries for a large number of manufactured articles——
    Concentration of imports at Buenos Ayres.

EXPORTS——Their classification according to origin——Value of exports
    from each district, with indications of the chief articles
    exported——Decadence of the French trade with the Argentine and
    its causes.

Tabulation, according to importance of the principal products
    exported by the Argentine——Remarkable increase in agricultural
    and pastoral exports——Search for new outlets.

Eventual denunciation of commercial treaties——Projected new treaty
    with France——Causes of the superiority of English, German, and
    North American trade in the Argentine over French trade.

“Dumping” in the Argentine——A new client for the Argentine——Japan——
    Elements which make for the development of commercial activity
    in the Argentine.

The commercial balance——Results of the commercial balance——Its
    prime importance in respect of the prosperity of the country——
    It is this balance which compensates the issue of capital for
    the benefit of the foreign debt.

The whole activity of the Argentine Republic is reflected in the
statistics of its external commerce, which gives the true measure of its
prosperity. All the vital forces of the country, its river traffic-ways,
its railways, its ports, its business centres, all aid in the development
of the commercial movement, which lives only by means of international
exchange. We have thus reached one of the most important points of our
study: that from which we can best judge the place held by the Argentine
among the great markets of the world.

Considered under its general aspect Argentine commerce may be summed
up as follows: the exportation of raw materials and the importation of
manufactured articles. We mention exportation first by design; for it is
the exports, as we have already pointed out, that regulate the purchasing
power of the country. There are no reserves in the Argentine which permit
the country to preserve its power of purchase much in excess of the
movement of capital produced by the sale of the harvest.

This situation cannot be clearly expressed in figures; for we can prove
that as late as 1891 the sum of imports was greatly in excess of that of
exports. In normal periods one must, in fact, take into account a new
factor; namely, external credit, which allows the Argentine to increase
her power of purchase above her actual resources. When, on the contrary,
a crisis arises, the imports rapidly follow the movement of the exports,
the country no longer being able to depend upon credit nor to cover by
loans its unfavourable commercial balance.

We give below, taken from the publications of M. Latzina the statistics
of foreign trade since 1861, which is the first year included in the
official statistics.

The foreign trade of the Argentine has passed through two distinct
phases; from 1861 to 1890 the imports were usually larger than the
exports; while since 1891 the exports, except in 1893, have been
considerably the larger.

It is curious to note that this reversal took place after the year
1890; that is, after the financial crisis which so violently shook the
country, and deprived it of that external credit which had hitherto
balanced the insufficiency of exportations. In 1891 the imports fell to
£13,441,400, from £28,448,000, or a fall of more than 50 per cent. from
one year to the next. Thenceforward the imports progressively increased
to £37,400,000 in 1904, varying by a few millions each year, while the
exports reached their present high state of development through the
progress achieved by agriculture.

  YEAR.    Population.       Imports.        Exports.            Balance.

  1861      1,375,481       £4,488,224      £2,864,518       -  £1,623,706
  1862      1,424,740        4,627,742       3,830,268       -     797,474
  1863      1,477,042        5,473,939       4,317,689       -   1,156,250
  1864      1,530,954        4,628,648       4,473,462       -     155,186
  1865      1,387,101        6,056,861       5,225,288       -     831,573
  1866      1,645,436        7,480,097       5,348,154       -   2,131,943
  1867      1,706,159        7,758,439       6,639,223       -   1,119,216
  1868      1,769,379        8,480,508       5,941,942       -   2,538,566
  1869      1,836,490        8,239,140       6,489,637       -   1,749,303
  1870      1,882,615        9,824,922       6,044,617       -   3,780,305
  1871      1,936,569        9,135,821       5,399,360       -   3,736,461
  1872      1,989,880       12,317,156       9,453,593       -   2,863,563
  1873      2,045,028       14,686,807       9,479,658       -   5,207,149
  1874      2,102,284       11,565,309       8,908,307       -   2,657,002
  1875      2,161,639       11,524,896      10,401,822       -   1,123,073
  1876      2,223,189        7,214,004       9,618,142       +   2,404,138
  1877      2,287,005        8,088,684       8,953,988       +     865,304
  1878      2,353,194        8,751,825       7,504,754       -   1,247,071
  1879      2,421,827        9,272,718       9,871,511       +     598,793
  1880      2,492,866        9,107,176      11,676,157       +   2,564,981
  1881      2,565,040       11,141,185      11,587,654       +     446,469
  1882      2,639,573       12,249,209      12,077,788       -     171,421
  1883      2,716,836       16,047,165      12,641,595       -   4,045,570
  1884      2,797,042       18,811,229      13,605,967       -   5,205,261
  1885      2,880,111       18,444,394      16,775,820       -   1,668,574
  1886      2,966,260       19,081,749      13,966,968       -   5,114,781
  1887      3,056,835       23,470,425      16,884,164       -   6,586,061
  1888      3,158,914       25,682,422      20,022,380       -   5,660,041
  1889      3,265,577       32,913,976      18,029,071       -  14,884,960
  1890      3,377,780       28,448,162      20,163,798       -   8,284,364
  1891      3,490,417       13,441,556      20,643,800       +   7,202,244
  1892      3,607,103       18,296,232      22,674,067       +   4,377,836
  1893      3,729,105       19,244,725      18,818,032       -     426,694
  1894      3,856,728       18,557,725      20,337,597       +   1,779,872
  1895      3,984,911       19,019,287      24,013,560       +   4,994,270
  1896      4,084,183       22,432,718      23,376,403       +     927,685
  1897      4,186,267       19,657,789      20,233,859       +     576,070
  1898      4,291,575       21,485,780      26,765,891       +   5,280,111
  1899      4,400,226       23,370,134      36,983,506       +  13,611,152
  1900      4,512,342       22,697,014      30,920,082       +   8,223,068
  1901      4,625,150       22,791,949      33,543,220       +  10,751,271
  1902      4,741,780       20,607,851      35,897,345       +  15,289,494
  1903      4,860,324       26,241,320      44,196,905       +  17,955,585
  1904      4,981,832       37,461,194      52,831,505       +  15,370,311
  1905      5,214,974       41,030,884      64,568,768       +  23,537,884
  1906      5,377,639       53,994,104      58,450,766       +   4,456,662
  1907      5,546,106       57,172,136      59,240,874       +   2,068,738
  1908      5,712,489       54,594,547      73,201,068       +  18,706,521
                         --------------  --------------     ----------------
  TOTALS                   £887,142,003    £964,278,951       + £77,136,940
                         ==============  ==============     ================

For the explanation of these data, we must remember that during the last
twelve years the population has increased only by about one million
inhabitants, and that in consequence the power of consumption of the
Argentine could only become modified to a certain extent. If we except
certain periods of exceptional importations, referring, for instance, to
the entry in bulk of large amounts of raw material for the construction
of new railways, we see that the imports, as compared to the bulk of the
population, represent from £5, 5s. to £7, 18s. 7d. per head, while the
same figure for exports is £7, 10s. 7d. to £10, 12s. 0d., according to
the condition of agriculture.

If we now examine the recent results of foreign trade, we find the
situation summed up by the following figures for 1908, as compared with
1907, 1906, and 1905:——

                         1908          1907          1906           1905

  Exports            £73,201,068   £59,240,874   £58,450,766    £64,568,768
  Imports             54,594,547    57,172,136    53,994,104     41,030,884
                    ------------   -----------   -----------   -------------
  Excess of Exports  £18,606,521    £2,068,738    £4,456,662    £23,537,884
                    ============   ===========   ===========   =============

The commercial balance in 1908 was thus £18,606,521 in favour of the
exports, as against £2,068,738 in 1907, £4,456,662 in 1906, which latter
sum was £19,081,222 less than in 1905.

There is every reason to believe that the exports for 1909 will prove
to have been fully as large as the year before, for the recovery of
the wool market and the enormous maize harvest will have compensated
certain deficits in the matter of corn and cattle, which suffered in the
preceding year from frost or drought.

As for the harvest of the current year, it is wiser not to say too much
at present, as the lack of rain has deranged the sowing season.

Before commenting in any way upon the figures relating to foreign trade,
we must make one remark in respect of the method followed in making out
our balance-sheets, etc. In the case of imports, the valuation of the
customs is taken, and in the case of exports their current market price
in gold. But this procedure has the demerit of yielding results which are
not in strict correspondence with reality; the most we can say is that
they enable us to make a strict comparison of one year with another.

The valuations according to the customs are from 20 to 30 per cent.
above the true values in the case of the majority of articles, and are
sometimes merely fantastic.

To gain some idea of the disturbing factor which arises from the
calculation of imports upon the basis of customs estimates, which
estimates are the basis of the figures of the National Statistics, we
need only take the figures relating to coffee as an example. In 1899 it
was valued at 30 centavos in gold; in 1900, at 20; and in 1902, at 12
centavos (7·2d., 4·8d., and 2d.). This decrease of over 5d. in three
years only enables one to judge of the instability of this rate of

Here are some examples of the tariff paid by certain imports into the

The 50 per cent. tariff strikes principally at the importation of
woven stuffs, carriages, harness, furniture, perfumery, ready-made
under-clothing, boots and shoes, hats, and similar articles not burdened
by specific tariffs, for there is a host of articles which pays the
entrance duty in this way. In practice this _ad valorem_ tariff of 50 per
cent. frequently becomes a tariff of 100 per cent. or more, on account of
the arbitrary nature of the customs valuations.

The 45 per cent. tariff affects stockings, socks, etc., exclusively.

The 40 per cent. tariff affects bales of unbleached linen, all kinds of
cotton cloth and calicoes, dressed leather, articles of lace made of pure
silk or silk mixtures, or of thread; woollen blankets, and blankets of
wool with cotton warp, or bound or bordered; also laces and silk thread
or thread of mixed silk and woven stuffs and any other articles of silk
or silk mixtures, including floss silk, etc.

The 35 per cent. tariff applies to woollen stuffs in general, whether of
pure wool or mixtures.

The 25 per cent. tariff affects all merchandise not burdened by a special
tax. That of 20 per cent. affects bar, strip and ribbon steel, and
unbleached cotton cloths.

The 15 per cent. tariff affects oak, cedar, pine, spruce, and tissues of
silk intended for bolting flour. The 10 per cent. tariff affects certain
chemical products, and also cocoa, tin, machinery in general, agave
fibres, jute, and hemp fibre for making mats, etc. That of 5 per cent.
which is the lowest, is imposed on turpentines, steel wire for fencing,
ploughs, jewellery, sulphur, cotton, whether raw or in the thread for
industrial purposes, sewing-thread, sacks, and other various articles.

Besides the above there are some ninety-five articles or products on
which specific duties are imposed.

Since 1900 a legislative factor, at first sight unimportant, but in
practice of the greatest advantage, has to a certain extent modified
the vexatious character of the Argentine tariff. This factor consists
in the relative stability imposed by Congress on the customs law, by
the suppression of the annual revision to which the rate of valuation
was subjected, which change has allowed commerce to establish its
transactions on a definite basis; whereas they were formerly contingent
upon the continual modifications of the said tariff. This step, like so
many others, was initiated by the ex-Minister, Señor José Maria Rosa.

Exaggerated values were always at the base of these tariffs, and the
abuse became so notorious that the present Minister of Finance, Dr Terry,
was himself obliged to recognise “that reform was essential in the matter
of the rectification of all these valuations, in order that the Customs
Administration should not strike indirectly at imported products by taxes
far in advance of those intended by the legislative power.” A new tariff
has been in force since the 1st of January 1905, and although it also has
given rise to a certain degree of recrimination, it is none the less an
improvement upon the former state of affairs. As for the export duties,
here again we find notable discrepancies between the valuations and the
market prices which ought, on principle, to serve as their basis. They
were established after the crisis of 1890, and as they were now no longer
justified by insufficient resources, they were suppressed by Congress
reckoning from 1906.

These customs duties on exported goods were established by the Argentine
Constitution, but not in a permanent manner. The Charter enacted that
they should be in force up to 1866; but at that time, the country being
at war with Paraguay, a Convention was convoked, which postponed the
settlement of the matter for some years.

In 1887 the export duties were suppressed; but in 1900, after the
terrible financial crash, they were once more established, in order to
relieve the heavy burdens and engagements of the Treasury.

These duties were from 4 to 100 per cent. _ad valorem_, and were
principally directed against leathers and hides, wool washed or unwashed,
ostrich plumes, tallow, fat, animal oil, horns, etc.

As may be seen by this simple enumeration, these duties weighed upon the
by-products of stock-raising as they left the country for the markets
of foreign consumers, and this after they had already been subjected to
other heavy charges, in the shape of land taxes, customs duties on wire
for fencing, and many local taxes, while agricultural products escaped
scot-free. For this reason it has always been considered that the export
tariff had no equitable basis, and all the Argentine Administrations have
for this reason endeavoured to suppress it, as the Congress finally did
in 1905. Whether we are dealing with exports or with imports we always
find, as we have seen, an inflation of prices on both sides, so that
the figures of the official statistics have not so much an actual as a
comparative value.

There is still one important item to be remarked in respect of imports:
it is that the import duties in recent years have been first raised then
lowered. Additional duties amounting to 10 per cent. were established
when the dispute with Chili seemed about to end in war——that is, on
the 29th of January 1902——at which time a supertax of 5 per cent. was
added to the tariff which had already been in force since 1899. Since
then these duties have been finally suppressed (in January 1904). It is
obvious that with these variations we have not always the same basis of
valuation, as the imports are variously affected by these variations
themselves, so that all exact comparisons are impossible.

We must also take into account the value of the imports which are not
controlled by the customs. Competent persons have estimated that these
amount to about 20 per cent. of the goods passing through the customs,
which represents a sum of about £2,000,000.

Again, the figures we have quoted do not include the movements of
currency or bullion, which during the last six years have been as

  Year.          Metallic Imports.    Metallic Exports.     Balance.
  1902              £1,781,817           £614,868         +£1,166,949
  1903               5,217,237            239,230         + 4,978,007
  1904               4,983,590            320,858         + 4,662,732
  1905               6,511,908            163,875         + 6,348,033
  1906               3,642,464            301,124         + 3,341,340
  1907               4,710,545            626,777         + 4,083,768
  1908               5,730,243              8,963         + 5,721,280
  1909 (six months)  7,888,781              2,991         + 7,885,789

The increase observed from one year to the other in the importation
of bullion is in direct relation to the increase of exportations: it
corresponds to the consignments of gold, coming especially from the
London market, in order to expunge the commercial balance in favour of
the Argentine.

In the light of these observations we will now examine the commercial
movement in itself, while noting its distribution according to the
various countries which exchange their products with the Argentine.

We will then give a list of the principal articles entering into the
composition of this foreign trade.


Here is a table of imports for the years 1906-1908, and for the first
six months of 1909, classed according to their origin and in order of

  Country of Origin.     1906.         1907.         1908.        1909.
                                                              (Six months.)
  Great Britain      £18,965,987   £19,587,148   £18,674,279    £9,416,405
  Germany              7,683,252     9,162,234     7,569,417     4,305,742
  United States        7,894,979     7,768,455     7,119,401     3,704,917
  France               5,348,975     5,093,605     5,295,385     2,998,346
  Italy                4,824,727     4,800,648     4,982,649     2,706,014
  Belgium              2,425,608     3,179,370     2,550,674     1,309,920
  Brazil               1,328,205     1,569,871     1,457,189       751,923
  Spain                1,473,654     1,458,894     1,723,622       859,013
  Uruguay                366,648       494,551       441,407       269,740
  Holland                302,349       352,401       407,606       212,714
  Paraguay               261,794       282,867       301,991       185,114
  Cuba                   135,916       115,396       136,137        59,607
  Chili                  105,643       110,965       145,398        39,756
  Bolivia                 26,822        25,375        31,212        13,443
  Other Countries      2,829,544     3,170,354     3,758,181     1,414,952
                     -----------   -----------   -----------   -----------
  Totals             £53,994,104   £57,172,136   £54,594,547   £28,276,906
                     ===========   ===========   ===========   ===========

_Great Britain_ is always at the head of the list of imports, the total
of her products imported by the Argentine in 1908 being £18,674,279.
Among these products one of the greatest importance is coal, of which
2,338,949 tons were imported in 1907, representing a value of £3,274,528.
Woven fabrics of all kinds attained a value of £3,038,694; railroad
material £2,703,945, and sacking for making up into sacks, £296,585.

_Germany_ now occupies the second place. The imports from Germany, worth
£7,569,417 in 1908, are of all kinds, and include almost every kind of
product consumed by the Argentine. On account of her various industries,
metallurgical products holds the first place; then come woven fabrics and

_The United States_ send principally agricultural material, petroleum,
and pine timber; the imports for 1908 were £7,119,400 in value; or
nearly twice the value of the Argentine exports to the States. This
situation is explained by the fact that both countries export the same
products——cereals and cattle, etc.

_France_ comes fourth, with £5,295,385 worth of produce in 1908. Her
products, like those of Germany, are very numerous in kind. The largest
imports are of woven fabrics, wines and spirits, metallurgical products,
pharmaceutical specialities, and perfumery. Taking the item of wines
and spirits alone, the Argentine imports £228,000 worth of bitters and
vermouth and £202,560 worth of wines in the wood.

_Italy_ sent £4,982,649 worth of imports in 1908. From Italy the
Argentine imports the largest quantity of wines and of bitters, valued
at £922,938; olive oil accounts for £394,133, rice for £295,667, cheese
for £181,949 (the weight of this import in 1907 being 2,274 tons); in
short, all the articles most in demand among the Italian emigrants. Woven
fabrics attained a value of £927,857.

Far below the countries already named, with an amount of produce less
than half that imported by France, comes _Belgium_ (£2,550,674 in 1908);
then _Brazil_ (£1,457,189), and _Spain_ (£1,723,622). Belgium sends
principally metallurgical products; Spain her wines and oils and salt.
Brazil sends only a dozen or so of products; the most important being
coffee, tobacco, and especially the yerba maté; a herb analogous to tea,
and used as a beverage in the country districts. Brazil and Paraguay,
which supply it to the Argentine, sent £1,046,183 worth of the herb in

The table given below shows what are the principal products imported by
the Argentine Republic, and show the considerable increase which has
taken place in all branches of importation:——

                                   1906.        1907.        1908.        1909.
                                                                     (1st six months)

  Alimentary products            £3,532,509   £4,183,187   £4,709,819   £2,226,053
  Beverages                       2,358,808    2,526,748    2,655,956    1,155,965
  Textile materials and fabrics  10,826,008    9,466,638    9,982,267    5,787,076
  Mineral oils, and chemical   }
    and pharmaceutical         }  3,092,766    3,254,653    4,048,175    2,174,871
    products                   }
  Woods, furniture, etc.          1,122,444    1,272,008    1,262,573      728,178
  Iron, machines, materials,   }
    implements, utensils, etc. }  6,988,461    6,632,228    6,015,097    3,401,912
  Coal and other mineral produce  4,182,160    4,126,910    4,979,839    2,229,224
  Various products[75]            21,890,946   25,709,763   20,960,820   10,544,272
                                 ——————————   ——————————   ——————————   ——————————
  Totals                         53,994,102   57,172,135   54,594,546   28,507,351
                                 ==========   ==========   ==========   ==========

[Footnote 75: Under this heading of various products are included railway
material——rails, chairs, locomotives, etc.——to the value of £4,672,486
in 1905, £7,011,072 in 1906, £10,464,150 in 1907, £6,015,097 in 1908,
and £3,401,912 during the first six months of 1909. Building materials
amounted in value to £4,400,339 in 1906, £4,604,078 in 1907, £4,236,485
in 1908, and £2,492,276 in the first half of 1909.]

We see from this table that the Argentine relies on foreign imports for
the greater number of metallic, chemical, and textile products, and even
for a great many food-stuffs. An essentially agricultural nation, she has
not as yet developed her industrial equipment, nor has she been able to
undertake the transformation of the raw materials at her disposal into
manufactured products. The development of her agriculture is the object
which has hitherto absorbed all the initiative and all the capital of the

It is this dependence upon foreign countries for so many articles of
prime necessity that makes the cost of living in the Argentine so high.
All these articles have to pay customs dues varying from 5 to 50 per
cent. _ad valorem_; dues which still further increase the exaggerated
valuations of the Customs Administration.

On the other hand, these imports are by no means so decentralised as
the exports; they are brought as near as possible to the centres of
consumption, so that they shall not be forced to pay fresh freight dues
in the interior. The Customs House of Buenos Ayres handles 84·9 per cent.
of the imports; Rosario 9·2 per cent.; La Plata 1·9 per cent., and Bahia
Blanca ·8 per cent. As we see by these figures, the Federal Capital
almost monopolises the imports, whence arises its disproportionate
development as compared with the rest of the country.


Here is the table of the exports of the last three years, arranged
according to their destination, in order of importance:——

  DESTINATION.          1906         1907         1908         1909
                                                           (1st six months)
  Great Britain[76]    £8,644,807   10,743,230   15,644,944   10,207,653
  France               7,152,671    7,552,409    5,782,750    4,761,514
  Germany              7,883,439    7,284,611    6,950,399    4,280,523
  Belgium              5,124,279    5,918,426    7,155,637    5,531,015
  Brazil               2,378,263    2,803,686    3,019,115    1,729,824
  United States        2,666,422    2,188,087    2,604,647    2,411,460
  Italy                1,381,225    1,043,893    1,581,571    1,508,815
  Holland                595,047      834,818    1,059,934      623,634
  Spain                  514,515      387,121      519,920      248,823
  Chili                  277,107      370,133      307,501      297,018
  South Africa           791,606      303,118      172,088       24,662
  Uruguay              1,006,880      275,328      154,891      112,329
  Cuba                    49,478      144,896       57,891       42,046
  Bolivia                 65,719      121,610      118,745       75,616
  Paraguay                41,003       36,530       42,733       17,166
  Other destinations     755,324      598,740      921,081      792,241
  Shipments to order  19,122,949   19,252,891   27,085,119   17,710,457
                      ——————————   ——————————   ——————————   ——————————
                      58,450,766   59,240,874   73,201,068   50,354,688
                      ==========   ==========   ==========   ==========

[Footnote 76: It should perhaps be explained that the totals are
correctly converted from the Argentine values, but are not the exact
sums of the columns of figures, as these latter are for economy of space
printed without the following decimals that result from conversion. The
error in any one case is infinitesimal——from 1/100th to 1/1000th of 1 per

In the matter of exports the first place is again held by England, with
an exportation of £15,664,944 in 1908 as against £10,743,230 in 1907, an
increase of £4,421,714.

England is the Argentine’s largest client in the matter of agricultural
produce, taking 16 per cent. of the whole amount exported. In 1907 she
spent £3,739,509 on chilled meats; £1,843,954 on cereals——wheat, maize,
and linseed; £1,212,471 on wools; £193,834 on butter, and £379,810 on
sheepskins and cowhides, dried and salted. Australia also imports wheat
and maize from the Argentine.[77]

[Footnote 77: These figures are for 1907 except where otherwise

The export trade to England is still capable of a far greater expansion,
if England will only determine to allow cattle on the hoof to be imported
once more; an import she denied herself some years ago, on account of
anthrax, and one which the Argentine is eagerly begging her to resume,
under proper sanitary regulations.

It is England which has hitherto preserved the closest balance between
her exports to and imports from the Argentine, and no other country
has so far been able to oust her from her dominant position in the
Argentine foreign trade. From this we see that the ties which unite the
two countries have nothing factitious about them; a fact which is still
further emphasised by the statistics of English capital employed in the

Germany holds the second place, with her £6,950,399 of imports from
the Argentine (in 1908: £7,284,611 in 1907). After England, she is the
greatest consumer of Argentine wool; the exports of this product in 1907
amounted in value to £2,846,213. Other articles absorbed by Germany are
hides (to the value of £1,045,417), and cereal products——wheat, maize,
linseed,and bran——(to the value of £1,013,426). The German imports from
the Argentine do not, however, include cattle or chilled meats.

_France_, up to 1876, occupied the first place on the scale of Argentine
exports. To-day her imports from the Argentine amount to £5,782,750
only (1908), or nearly £10,000,000 less than the English imports (in
1907 they amounted to £7,552,409). Her purchases in the Argentine are
confined to a very few products, of which the chiefest is wool, the value
of the export in 1907 being £4,908,510, or a little less than half the
entire Argentine production. Then come hides, to the value of £1,508,764;
then linseed, maize, and wheat to the value of £309,956, £322,473, and
£271,488 respectively, the whole imports from the Argentine in 1907 being

The French system of Protection has so far stood in the way of the
trade in Argentine cereals, and has absolutely prohibited the entry of
animals or chilled meat. The interests of the French agriculturalists and
cattle-breeders have hitherto come before the interest of the consumer,
which is to obtain the products necessary to life in the cheapest market.
But overtures are being made, by the common agreement of both countries,
which may eventually open the French market to Argentine meats, in return
for certain concessions granted to France, relative to the exportation of
her own products——her wine, silks, woven fabrics, etc.

The marked and progressive decadence of the Franco-Argentine trade ought
to rivet the attention of French capitalists and statesmen. Hitherto
numerous ties have connected France and the Argentine. The fundamental
code and the legislative system of the South American Republic have been
impregnated by the spirit of liberty, equality and fraternity proclaimed
by the French Revolution. The Argentine mind is fed upon French
thought, science, and literature. It is now, however, to be seen that
the intellectual influence of France is losing ground, as well as her
commercial influence, as to-day the sense of national fraternity is based
upon solidarity of interest.

Now the decadence of French trade with the Argentine is truly alarming.
If we consult the publications of the National Department of Statistics,
we find, for instance, that in the thirty-one years from 1876 to 1907
the German exports to the Argentine have increased by 2450 per cent.;
the Belgian, by 1002 per cent.; those from the United States by 1898 per
cent.; Italian exports by 907 per cent.; English by 992 per cent.; but
French exports have increased only by 204 per cent.

Compared with other nations, France has least been able to hold her own
in the matter of trade with the Argentine. In 1876 the importations from
France formed 23·2 per cent. of the total imports; while in 1908 they
formed only 9·9 per cent. of the totals, making a proportional diminution
of 13·3 per cent. in thirty-two years. Our imports from England,
however, which in 1876 were 24·9 per cent. of the total, had increased to
34 per cent. by 1908; representing a proportional increase of 9 per cent.

We are thus justified in concluding that all our efforts to develop
the current of Franco-Argentine exchange will contribute powerfully to
fortify the influence of France, and the sense of confraternity between
the two Latin nations.

The causes of the decay of the French trade have been recapitulated in an
official document despatched in 1904 by the French Chamber of Commerce in
Buenos Ayres to the Minister of Commerce.

       *       *       *       *       *

These causes may be summarised as follows:

    1. The exaggerated duties to which many of our products are
    subjected on entering the Argentine.

    2. The competition of local industry with the imports of
    certain products.

    3. The dearness of labour in France, and the consequent cost
    of manufacture, which in many cases no longer permits us to
    struggle against our competitors.[78]

    4. The imperfection of our equipment for making certain

    5. The persistence of our manufacturers in disregarding the
    tastes of their _clientèle_.

    6. The insufficiency of the credit granted by French
    manufacturers and merchants as compared with those of other
    competing countries.

    7. The frequent lack of technical knowledge on the part of
    foreign commercial travellers; a lack which almost always
    prevents them from benefiting as they should from direct
    contact with their customers.

    8. Finally, in the matter of navigation, the expensive
    character of our vessels, and the resulting dearness of

[Footnote 78: The case of France is especially interesting, because
her tendency is towards self-sufficiency——the reverse of the policy of
nearly all other countries.]

[Footnote 79: See _Rapport à M. le Ministre du Commerce sur les causes
de la diminution du commerce française dans la République Argentine_,

_Belgium_ imports some £5,918,426 worth of produce from the Argentine
(£7,155,637 in 1908). She receives much the same articles as Germany:
£1,456,196 worth of wool, and £2,285,174 worth of cereals, of which
£1,551,228 goes for wheat. We find a new item figuring in the Belgian
imports——extract of beef——to the value of £173,885; this extract is made
by Kemmerichs, the rivals of Liebigs, who manufacture their extract on
the Uruguay.

Of late years the Argentine has gained a new client——_South Africa_.
During the Boer war an extensive export trade sprang up, in live animals,
chilled meats, and cereals, and this trade has been maintained. The value
of the exports to South Africa in 1908 was £172,088 (£303,418 in 1907.)

_Brazil_ also imports alimentary products from the Argentine: cereals,
and especially wheat and flour. The value of the exports to Brazil
in 1908 was £3,019,115. Between the two principal countries of South
America——Brazil and the Argentine——economic relations are promoted by
convenience; Brazil furnishing the produce of its prosperous and varied
forms of agriculture——coffee, yerba maté, tobacco, etc.——in exchange for
Argentine cereals and cattle.

In North America, on the contrary, the Argentine finds few outlets for
its products, as the two countries have almost the same products. The
exports to the United States were £2,188,087 in value in 1907; £2,604,647
in 1908; consisting almost entirely of hides, wool, and extract of
quebracho for tanning; while, as we have seen, the exports of the United
States to the Argentine reach the value of £7,100,000.

The Argentine Government has given much thought to the disadvantages of
this commercial situation; it has sought means to remedy it, but so far
has adopted no practical measures. It has also endeavoured to conclude a
commercial agreement with Brazil, but without success, because in South
American states questions of race-antagonism often give rise to the
gravest problems. This fact also explains why the attempts to establish a
commercial treaty have so far failed.

In his last message, however, the President of the Republic admitted
that negotiations were in progress with a view to opening up new markets
and to increase the mutual trade of the Argentine and other countries. He
even announced that a commercial treaty with Chili was almost completed.
On the other hand, as arbitration treaties have just been concluded with
Brazil and the United States, we may infer that these countries are not
systematically opposed to any understanding with the Argentine.

       *       *       *       *       *

Holding positions far inferior to the foregoing countries are: _Italy_,
which in 1908 received £1,581,571 worth of Argentine products,
principally maize and hides; _Holland_ receiving £1,059,394 worth of
imports, comprising linseed and cereals (maize and wheat); _Uruguay_,
importing live-stock, meat, sugar, hides, etc., to the value of £154,891
in 1907 (£275,328 in 1908); _Spain_, importing maize, hides, and fats to
the value of £387,121 in 1907 (£519,920 in 1908); and _Chili_, importing
Argentine produce to the value of £370,133 in 1907 (£307,501 in 1908),
consisting entirely of cattle and mules.

Finally we must mention _Austro-Hungary_, although that country has very
little commercial contact with the Argentine. The imports from Austria
and Hungary amount to some £500,000 or £600,000 (£578,932 in 1907,
£658,700 in 1908), and the Argentine exports, principally wheat, amounted
to a value of £150,395 in 1907, and £214,227 in 1908.

One department of the foreign trade of the Argentine cannot be
precisely classified; namely, that of the products which are loaded on
vessels which make seawards, and those which, coming from the river
custom-houses, are transported to Buenos Ayres, there to be transhipped
for foreign countries. The value of such exports was £19,252,891, in
1907, and £27,085,119 in 1908. This sum includes the value (£18,654,153
in 1907) of agricultural products, wheat and maize, despatched to order
but without exact destination, whether to Saint Vincent in the Cape Verde
Islands, Las Palmas in the Canaries, or Falmouth in England.

The following table shows, in the order of their importance, the products
exported by the Argentine during the three years 1906-1908 and the first
six months of 1909, so that we may see at a glance what branches of
production have most rapidly increased:

                                 1906.         1907.         1908.         1909.
                                                                      (1st six months)
  Products of Stock-raising   £24,827,397   £24,764,041   £23,023,691   £16,213,533
  Products of Agriculture[80]   31,530,938    32,818,324    48,335,432    32,986,430
  Forestal products             1,184,372     1,068,471     1,269,447       794,772
  Various                         908,168       590,037       272,497       359,952
                              -----------   -----------   -----------   -----------
               Totals         £58,450,875   £59,240,873   £72,921,067   £50,354,687
                              -----------   -----------   -----------   -----------

[Footnote 80: The agricultural exports for 1906 wore sensibly lower than
those of 1905, on account of a decrease of £3,864,392 in the exports of

We see that agricultural products were responsible for the enormous
increase in the trade statistics of 1908. They represented 66 per cent.
of the total exports, and had increased nearly 50 per cent. in one year.
The products of stock-raising have not increased; on the contrary, there
is a falling off of more than £5,000,000 between 1905 and 1908, the value
in 1905 being £28,208,597.

We see from the preceding data how greatly agriculture has developed
in the Argentine during the last few years. To realise precisely how
great this development has been, we need only recall the fact that the
exportation of corn is now 10,000 times greater than it was thirty years
ago: maize has increased by 800 per cent.; fodder, by 80 per cent.:
linseed, by 70,000 per cent.; flour more than 600 per cent.[81] These
figures show how rapid the growth of the Argentine has been, and what
progress has been realised in spite of temporary crises.

[Footnote 81: Latzina, work already cited, p. 510.]

If we now consider the progress of external trade, not from year to
year and in detail but as a whole, and over a large period, we can no
longer doubt that this trade is destined to accomplish still greater
development. Importation too, the field for which is somewhat restricted,
may also realise a greater progress as the population increases. Again,
once the Argentine develops her industries with greater energy, it is
only natural that larger quantities of raw material will be imported, to
be transformed into manufactured articles.

As for the increase of exports, we have only to turn to the data already
given concerning the annual increase in the area of sown land, and the
importance of those lands which have yet to reach their true value,
but will do so as soon as the stream of immigration supplies them with
settlers and colonists.

Moreover, the creation of a network of economical light railways, and the
opening of new ports on the great rivers, will give the export trade new
facilities, which will naturally result in an increased trade.

In the first edition of this book we remarked that there was still an
unknown factor in the future of the foreign trade of the Argentine.
Now there is, in the Presidential Message, an allusion to the eventual
termination of the commercial treaties with the principal nations, with
the intention of suppressing the “most favoured nation” clause, and of
opening up direct negotiations.

Very fortunately this measure has had no practical consequences, for the
revision of treaties is a delicate piece of work for a nation essentially
tributary to the foreigner, if one wishes to avoid the risk of provoking
reactions which might compromise the results already obtained.

This “most favoured nation” clause, which the Republic inserts in all its
treaties, has, for the rest, by no means impeded the enormous expansion
of the Argentine export trade which we have already noted. We must
conclude that the termination of commercial treaties, with the object
of effacing this clause, has become, even in the case of distinguished
statesmen, a continual obsession, although it is justified by no decisive
argument, and might well expose the country to dangerous vicissitudes.[82]

[Footnote 82: One may with profit consult a notable report on _La
clause de la nation la plus favorisées_, presented to the Minister of
Agriculture by the Divisional Chief, Richard Pillado.]

On certain points, however, the customs laws of the Republic might well
be revised in such a way as to stimulate foreign trade.

Thus with regard to France official negotiations have already been
opened, with the object of affording the Argentine certain facilities
in the introduction of her chilled meats; while in return French wines
and woven fabrics, etc., were to be given a preferential treatment. Just
as the basis of this arrangement appears, we have as yet no reason to
suppose that it will be ratified by the two nations concerned, or that it
will soon be put into execution.

Taking a more general point of view, we are obliged to admit that if
French commerce, and especially French industry, have not won the place
which should be theirs in the Argentine Republic, when we consider the
magnitude of Argentine exportation to France, it is because French men
of business and manufacturers have started from a false principle, from
whose consequences they and the Argentine are still suffering. Instead
of following up the rapid evolution of the Argentine, the French have
persisted in regarding it, from afar off, as a nation scarcely yet open
to civilisation and progress. They used to seek to get rid of remainders,
old-fashioned articles, and out-of-date equipments in the Argentine,
as they do to-day in China and Africa. Such railways as are built with
French material are an example of this practice; their installation
left much to be desired, and it is only lately that they have made some
efforts to support comparison with other lines.

The English, Germans, and Americans of the States were better advised.
Having studied with greater care the country and its tendencies, they
were able to initiate it into the paths of material progress. Those
railways which were built by English contractors or companies are models
of perfect adaptation to the needs of the country. The equipment of the
tramways, furnished by the United States, may be compared with that of
the principal capitals of Europe. In the matter of electric lighting the
great German companies have installed the best German plant.

The same observations may be made of a large number of other products
imported from abroad. There is nothing better in the United States in the
matter of agricultural equipment than that possessed by the Argentine; as
for stock-raising, we have only to remember that it is to South America
that England sends her best bulls, rams, and stallions.

But from these remarks it must not be concluded that the Argentine
has bought too dearly the glory of an equipment which is modern as
compared with that of the old European nations. Of late years it is
rather the reverse that has been true. The leading industrial countries,
being anxious to sell off their stock on account of an almost general
over-production, have been propelled towards the markets of exportation
in order to get rid of their surplus. From this has resulted a
competition from which the Argentine has in many cases profited, by
obtaining industrial products under particularly advantageous conditions.
Such has been the case in the matter, for example, of rails; the German
trade offered them at £4, 16s. per ton, at a time when the European
prices were considerably higher; Germany, however, was supplanted by the
factories of the United States, which supplied them at £2, 8s. per ton.
This is an application of the new economic process known as _dumping_,
which consists in developing production as far as possible, in order
to lower the net cost of production, and then to sell at this net cost
price, in foreign markets, all that the producing country fails to absorb.

All the nations we have cited are the actual consumers of Argentine
products; but it is to be hoped that yet other markets will be opened,
attracted by the abundance and the quality of these products.

Among these countries disposed to trade with the Argentine we must
mention the Japanese Empire, which is endeavouring to develop its trade
upon a reciprocal basis, and has sent a commission of delegates to Buenos
Ayres, who were instructed to obtain complete and practical data as to
the possibility of establishing a mutual trade with the young South
American nation.

The Japanese commissioners have accomplished their trade with the earnest
application characteristic of their countrymen, and after studying the
question for more than a year they have arrived at the conclusion that
many Argentine products, and among them wools, hides, and flour, might
find an extensive outlet in Japan; but only if imported free from the
expenses imposed by the European middleman.

Pursuing their investigations, the Japanese Commissioners discovered
that the great difficulty in the way of a direct trade between the
Argentine and Japan consists in the fact that there is no direct line
of steamers; but this obstacle might be overcome by an arrangement with
the Toyo-Yusen-Kaisha Company, which would establish a direct service to
Buenos Ayres _via_ Cape Town in forty-five days; at present the voyage
takes seventy days. This arrangement would lead to a reduction of 75 per
cent. on the freights.

Flattering, however, as the prospects of this new market may seem,
there is one item in the plan of the Japanese Government which gives
rise to considerable reflection on the part of our Argentine statesmen:
namely, the proposal to introduce Japanese agricultural immigrants into
the Argentine; that is, immigrants whose presence would in many ways
be inconvenient; against whose presence the United States and other
countries have reacted, and whose very presence in the Argentine would be
contrary to the sense of the Argentine Constitution, which imposes upon
Congress the duty of encouraging _European_ immigration.

In concluding this study of the foreign trade of the Argentine Republic
and its remarkable development, we cannot do better than quote the
enthusiastic words by which an Argentine statesman terminated a study of
the same question, thus summarising all the various elements which concur
in the development of the commercial activity of the nation:

“Despite the scanty population, and the small proportion of our
agricultural resources which has as yet been exploited, the production
of the Argentine is considerable. The herds grazing in our pastures show
the state of progress which stock-raising has attained; the harvests
which cover the plains of Santa Fé and Buenos Ayres have made the name
of the Argentine Republic known on the markets of Europe as that of a
flourishing agricultural country; sugar, the product of the cane-fields
of Tucuman, has enriched that Province and the national industry, and
very shortly the vines grown in the valleys of the old Province of Cuyo
will achieve a yet wider development, and will give still more abundant

“The smoke-stacks of manufacturers overlook many of the cities of the
Republic, and certain native products are now being transformed, as raw
material, into finished articles by the nation’s labour. Industries based
upon the vitality of our production, and supported by the public powers
solely in a rational and equitable degree, are developing themselves
without being forced to resort to the exaggerated and always mistaken
assistance of an excessive protectionism. In short, our foreign trade,
upon whose promising results we have already commented, will in its turn
fortify the economic organism, which is the basis of the welfare and the
power of nations.”[83]

[Footnote 83: See _Memoria del Departamento de Hacienda_, by T. M. Rosa,
1899, vol. i., p. 170.]

                       THE COMMERCIAL BALANCE

In a country like the Argentine, which has no accumulated reserves, and
has not become the creditor of foreign countries by investing its capital
abroad, a favourable commercial balance (that is to say, the realisation
of an excess of exports over imports) is a matter of considerable
importance. Now this excess was £18,600,000 in 1908; a record, if we omit
1905, which proves clearly that the Argentine has entered upon a period
of exceptional prosperity from the economic point of view.

To understand the full significance of this commercial balance, we must
bear in mind the financial situation of the Argentine, which has a
foreign debt of £74,200,000, demanding a yearly interest of £3,907,200,
payable, of course, in gold. In order, then, that the country may be able
to keep its engagements, the total value of its exports must cover the
amount due on the year’s imports and must also cover the interest to be
paid on the foreign debt, the dividends earned by the railway companies,
etc., and the expenses of maritime transport.

All that we have considered up to the present shows that the productive
capacity of the Argentine is limited to the results of agriculture and
stock-raising. With the exception of these two elements we may say
that the country produces nothing, transforms nothing. Industry is as
yet in its infancy; internal trade is undeveloped; the mercantile
marine is of no importance. For this reason the Argentine must perforce
employ the results of its agricultural exportation in procuring what
it lacks——objects of prime necessity, or raw materials of all kinds.
We can thus understand what an influence a change for the worse in the
commercial balance may exercise on the destinies of the country. If there
is a bad harvest the deficit must somehow be made up; and as Argentina
has not as yet saved enough capital to allow her to live on her own
reserve funds, it is at such times that a loan becomes necessary.

Thus each bad harvest helps to increase the foreign debt, to say nothing
of the financial disturbances which it may create.

It may be asked why, after a certain number of years of abundant
harvests, the Argentine has not as yet established this financial
reserve, which would serve to lessen the blow of a bad agricultural year,
and compensate the deficient exportation of a year of lean cattle. The
answer will be found in the figures which we print further on, relating
to the amount of foreign capital invested in the Argentine; in Government
bonds, shares in railway companies, or other undertakings, public or
private. According to our estimate, this sum amounts approximately to
£317,200,000, representing an annual drain of £18,400,000 in the shape of
interest, dividends, or redemption money. This is assuredly the outlet
by which much of the country’s savings escape, for we may truly say that
the Argentine, which is in a sense so much international territory, works
more for other countries than for itself.

Again, as we shall see, this exodus of capital takes place also by other
means; notably by the emigration of those natives or foreigners who
leave the Argentine to settle in Europe. It is not rare, among Argentine
families, to see certain members, having made their fortunes, emigrate to
enjoy their incomes under other skies. This applies yet more frequently
to foreigners. The Italian, for example (and more Italians come to the
Argentine than natives of any other country), the Italian is given to
transforming his savings into money of his own country; either with a
view to returning, or because he cannot on the spot find security or
facility for the accumulation of personal property.

So at the present time there are two distinct movements of capital; two
movements of contrary direction and absolutely distinct. Firstly, money
flows into the country in payment of exports; secondly, money flows
out of the country in payment of imports; and also in consideration of
foreign capital invested in the Argentine. From these two movements,
in times of prosperity, a third movement arises; a movement which
brings foreign capital into the Argentine, where it finds employment in
important undertakings, due to Governmental or to private initiative. But
although this influx of capital may mean further national progress, it
does not permanently affect the commercial balance of the country, as the
revenue deriving from it benefits the foreigner.

Whatever point of view we assume, we must always arrive at the same
conclusion; that the whole economic life of the Republic depends upon its
agricultural exports; its commercial balance has no other counter-weight
to help it to overcome the burden of debts contracted abroad by the
importation of merchandise or of capital. For ten years now the sense of
this commercial balance has been constantly in favour of the exports,
and there has even been a remarkable progress, scarcely interrupted at
critical moments. But ten years is only a brief period in the life of a
people; and however favourable the future outlook may appear, we must
always be prepared for a possible deficit, for a minus balance, as the
result of a bad harvest or some grave political crisis. These, in a
country without reserves of capital, are contingencies of which we must
never lose sight, and which force us to express our appreciation of the
financial or economic system of the Argentine with a certain reserve.

                               CHAPTER II


The principal industries of the country are related to agriculture
    and cattle-breeding.

SUGAR-PLANTING, BOILING, etc.——Capital engaged——Tucuman the chief
    centre——Production and exportation——The sugar crisis——The
    Rosario Refinery.

FLOUR EXPORT TRADE——Capital invested——Equipment, steam flour-mills,
    grain-elevators——Production and exportation.

REFRIGERATION——At present the chief industry of the country——Number
    of establishments——Table of exports of frozen and chilled
    meats——Capital invested——Development of the industry.

DAIRY INDUSTRIES——The large establishments devoting themselves
    to these industries——Butter; cheese——Exports of butter; the
    development of which the dairy industries are capable.

BREWERIES——Chief establishments——Production and consumption of beer
    during the years 1902-1907——Suppression of imports of foreign

SPIRITS——Decreased production of spirits.

LOOMS, TANNERIES——Weaving and tanning are industries which
    at present exist in the Argentine only in a rudimentary
    condition, despite the conditions which are favourable to their

QUEBRACHO WOOD——The centre of production——Applications——Companies
    engaged in the industry——Their results——Value of the products
    and the large profits to be expected.

TIMBER TRADE——Varieties of timber and hard woods.

FISHERIES——First results of this industry.

The industry of the Argentine Republic is more or less independent upon
its agriculture and stock-raising, which contribute the raw materials for
the manufacture of various alimentary products. Among those industries
which are thus dependent on the produce of the soil we must mention,
as the more important, sugar-boiling, flour-milling, the chilled-meat
industry, the making of butter, cheese, and oil, brewing, and distilling.

Besides these industries, the majority of which are flourishing and
suffice for the needs of the country, we must mention others which
are still in a rudimentary state, but which seem to have an assured
future, on account of the abundance of raw material; namely, the weaving
of woollen and cotton fabrics, and the preparation of leathers. We
shall therefore have occasion to remark upon the conditions of their

_Sugar Factories._——The sugar industry has fairly remote antecedents in
the Argentine. Dr Latzina traces it back to the Jesuits; the inventory of
their goods, drawn up at the time of their expulsion in 1767, proving the
existence of a field of cane and a sugar-mill.

Despite its respectable antiquity, the sugar industry only began to be
of significance towards the middle of the nineteenth century, at which
time it was established in Tucuman, whose soil appeared to be favourable
to the cultivation of the cane. Since then it has developed gradually,
but it is only during the last ten years that it has spread to any
considerable extent.

We have given the details of this development, together with figures, in
the chapter dealing with the industrial branches of agriculture, in which
we spoke of the laws affecting this industry.

To-day the number of sugar-mills or factories is thirty-one; they belong
to limited companies or to private persons, and represent a total capital
of £4,224,000, to which sum we must add another of £2,640,000 as the
value of some 160,200 acres planted with cane, at the rate of £16 to
£17 per acre, and £369,600 as the value of the Rosario Refinery; which
gives us a total of £7,233,600 invested in this industry. The largest
undertakings used to be in the hands of Señor Tornquist and M. Hilairet,
now both deceased, to whom the country is indebted for the great progress
effected in this industry.

To sum up the position of this industry, we must recall the fact that the
area of Argentine soil planted with sugar-cane at the end of 1907 was
172,900 acres, which yielded an average crop of 12·4 tons of cane per
acre, and produced about 130,000 tons of sugar.

The sugar industry has been developed in this country, as in so many
others, by the system of export bounties or premiums, which has since
been suppressed. Twenty years ago the Argentine had to import nearly all
her sugar from Europe——more than 100,000 tons per annum——while to-day she
produces far more than she can consume, and has to export the surplus of
her production.

Although the progress accomplished was so rapid, it was not effected
without certain misunderstandings, caused by excessive production. At
the end of the sugar crisis of 1896-7, which occasioned the closing of
a number of factories, attempts were made to regulate the industry, at
the instance of the leading makers. To-day there is a syndicate which
regulates production within the limits of exportation and production, and
serves as a sales agency for all the factories.

The sugar industry of Tucuman has the advantage as part of its equipment
the Rosario refinery, which receives the raw sugar of Tucuman and
subjects it to the various processes of crystallisation and bleaching.
Its output during the agricultural year 1906-7 was 107,621,800 lb. of
refined sugar; during the year 1907-1908 it was 120,552,220 lb.

_Flour-milling._——Flour-milling has had much the same history as the
sugar industry. Although the industry was established in the Argentine
as early as the sixteenth century, it has only been properly developed
during the last twenty years. Before this period the Argentine was
supplied partly from Chili, as its power of production had not kept
pace with its population. To-day the situation has been completely
transformed, since the enormous development of agriculture; not only does
the flour produced suffice for the country, but since 1878 an export
trade has sprung up, amounting to 39,000 tons in 1902, 72,000 in 1903,
107,000 in 1904, 144,700 in 1905, 129,000 in 1906, and 127,000 in 1907.
Brazil is the Argentine’s best customer for flour, having imported 84,000
tons in 1904, 103,000 in 1905, 114,000 in 1906, and 118,300 in 1907.

Great Britain was the second-best customer for flour, having imported
14,800 tons in 1904, 24,400 in 1905, 5400 in 1906, and 1200 in 1907;
to-day the exportation is negligible.

It is estimated that there are 600 or 700 flour-mills in the Argentine,
representing a capital of from £2,200,000 to £2,640,000. Buenos Ayres
has two, which have been lately installed on American models. They are
situated on land belonging to Madero Harbour, and comprise a fine and
powerful equipment, with grain-elevators, silos, and granaries. One
is the property of the Belgian Steam Flour-mills Company, and has a
capacity of from 12,000 to 14,000 tons. The other, with a capacity of
80,000 tons, was built by the efforts of two great railway companies, the
Buenos-Ayres Rosario and the Central Argentine. We have seen that no less
important installations are shortly to be built at Rosario, by the French
company which holds the harbour concession.

_The Refrigerating Industry._——Among all the Argentine industries the
most important is that of chilling or freezing meat and other foodstuffs.
It is gradually replacing, in the export markets, the salt meat or
_saladeros_ industry, which formerly was the only industry in the
country dependent upon stock-raising. The latter industry is carried on
principally in Buenos Ayres, Santa Fé, Entre Rios, and Corrientès.

The principal refrigerating establishments are the following:——

_The Sansinena Frozen Meat Co._, with a capital of £600,000, and the
warehouses known as La Negra, at Buenos Ayres and Bahia Blanca, in the
quarter known as _Cuatreros_.

_The River Plate Fresh Meat Co._, with a capital of £453,600, whose
warehouses are in the Province of Buenos Ayres.

_The Palmas Produce Co._, which is a component part of James Nelson &
Co., and has a capital of £500,000, exploits the district of Campana.

_La Blanca_, with a capital of £300,000, established at Buenos Ayres.

_The Plata Cold Storage Co._, with a capital of £403,805, situated at La

Recently another refrigerating establishment has been inaugurated at
Zarate, the property of the _Smithfield and Argentine Meat Co._, with a
mechanical equipment allowing 150 bullocks and 600 sheep to be killed per
diem. Its capital is £200,000.

To this list we may add the _Kemmerich Products Co._, which manufactures
extracts of beef. Its capital is £480,000, and it is established at Santa
Elena, in the Province of Entre Rios. This company owns 2700 square miles
of land, 340,000 cattle, 20,000 horses, and 50,000 sheep.

The exports of the refrigerating establishments for the last seven years
are given in the following table, which shows the enormous increase in
the export of quarters of beef during the last few years.

                 _Exports of Frozen Meat_ (1901-1908).

                                        |         1901         |         1902         |         1903         |         1904          |               1905              |
                                        |   Whole   | Quarters |   Whole   | Quarters |   Whole   | Quarters |   Whole   | Quarters  |   Whole   |   Quarters of Beef  |
                                        |   Sheep   |  of Beef |   Sheep   | of Beef  |   Sheep   |  of Beef |   Sheep   |  of Beef  |   Sheep   |-----------+---------+
                                        |           |          |           |          |           |          |           |           |           |   Frozen  | Chilled |
  Sansinena Frozen Meats Co.            |   985,294 |  157,740 | 1,289,628 |  304,108 | 1,072,248 |  291,621 | 1,207,801 |   242,940 | 1,002,146 |   332,302 |  59,535 |
  River Plate Fresh Meat Co.            |   927,648 |  170,123 | 1,120,263 |  301,881 | 1,000,562 |  370,663 |   855,039 |   335,136 |   680,836 |   204,436 | 174,242 |
  Las Palmas Produce Co.                |   809,785 |  170,512 | 1,019,331 |  224,224 | 1,095,678 |  291,266 | 1,056,996 |   312,870 |   867,832 |   337,640 |  29,099 |
  La Blanca                             |           |          |           |          |   213,112 |   42,513 |   424,486 |   178,709 |   244,299 |   177,470 |  38,408 |
  The La Plata Cold Storage Co.         |           |          |           |          |           |          |   129,456 |   140,343 |   369,299 |   350,096 | 100,423 |
  The Smithfield and Argentine Meat Co. |           |          |           |          |           |          |           |           |    33,830 |    30,300 |  24,304 |
  Rio Seco                              |           |          |           |          |           |          |           |           |    67,248 |           |         |
  The Frigorifique Uruguayenne          |           |          |           |          |           |          |           |           |    96,846 |    14,876 |         |
  The Frigorifique Argentine            |           |          |           |          |           |          |           |           |   126,882 |    64,601 |         |
                                        | 2,722,727 |  493,375 | 3,429,222 |  830,213 | 3,381,600 |  996,023 | 3,673,778 | 1,209,998 | 3,489,218 | 1,511,631 | 436,002 |

                                        |              1906                |              1907                |              1908                |
                                        |   Whole   | Quarters  | Quarters |   Whole   | Quarters  | Quarters |   Whole   | Quarters  | Quarters |
                                        |   Sheep   |  of Beef  |  of Beef |   Sheep   |  of Beef  |  of Beef |   Sheep   |  of Beef  |  of Beef |
                                        |           |  Frozen   |  Chilled |           |  Frozen   |  Chilled |           |  Frozen   |  Chilled |
  Sansinena Frozen Meats Co.            |   773,243 |   300,605 |   67,996 |   812,624 |   237,821 |   35,882 | 1,058,862 |   263,832 |   65,497 |
  River Plate Fresh Meat Co.            |   553,589 |   249,071 |  163,624 |   419,186 |   221,009 |  128,359 |   476,569 |   263,673 |  185,294 |
  Las Palmas Produce Co.                |   664,860 |   320,064 |   32,570 |   669,325 |   255,797 |   28,627 |   648,974 |   256,918 |   58,468 |
  La Blanca                             |   119,370 |   191,294 |   68,113 |    51,139 |   185,352 |  106,941 |   126,482 |   200,254 |  158,936 |
  The La Plata Cold Storage Co.         |   454,879 |   245,045 |   84,476 |   537,451 |   207,548 |   99,129 |   317,252 |   259,073 |  218,083 |
  The Smithfield and Argentine Meat Co. |    14,172 |   110,579 |   38,705 |    34,679 |   118,041 |   40,675 |    32,385 |   136,009 |   81,302 |
  Rio Seco                              |   104,047 |           |          |   261,335 |   101,792 |          |   134,595 |           |          |
  The Frigorifique Uruguayenne          |    63,311 |    17,521 |          |   142,070 |    76,475 |          |   137,853 |    76,062 |          |
  The Frigorifique Argentine            |   252,918 |   146,410 |          |   124,890 |           |          |   405,353 |   123,142 |   21,768 |
  San Gregorio                          |           |           |          |           |           |          |   133,835 |           |          |
                                        | 3,000,389 | 1,580,589 |  455,459 | 3,052,699 | 4,403,835 |  439,613 | 3,672,182 | 1,579,163 |  789,348 |

The capital invested in the refrigerating industry, including both share
capital and loans, is estimated at £4,449,825. The profits obtainable
may be judged by the dividends paid by the most important of the
refrigerating companies: the Sansinena Frozen Meats Co., in 1902, paid 50
per cent. out of the exceptional profits realised by the sale of cattle
in South Africa during the Boer war. Since then the dividends of this
company have fallen to 10 per cent.

Another cause of the development of this industry is the closing of
English ports against cargoes of live cattle, for fear of anthrax. It is
by the help of this prohibition that the refrigerating companies have
conquered the English market, which to-day takes up the greater part of
our frozen meat, as before it took our cattle. Steps have of late been
taken with a view to re-opening the ports under a pledge of sanitary
measures; but nothing decisive has been done, on account of the protests
of English cattle-breeders, and also of the refrigerating companies, most
of which have been created by English capital.

_The Dairy Industry._——Among the industries connected with
cattle-breeding there is one which, without having the same importance
as the industry dealt with above, has yet a certain margin of
development. This is the dairy industry, with its derivatives, butter and

The Argentine breeders having imported excellent Durham or Dutch
milch-cows, the dairy produce is of the finest quality.

Large establishments, of which one, La Martona, belongs to a private
company, have been installed for the purpose of supplying the city of
Buenos Ayres with milk. It is estimated that the daily sale at the
counters of _La Martona_ amounts to 10,000 glasses; the sales of _La
Marina_ amount to 6000, and of _La Granja Blanca_ to 10,000 glasses.
All these approximate figures refer to the summer only, and the sales
across the counter by the litre, for family consumption, and the house
to house distribution, are not included in these figures. Besides the
above establishments there are many cow-keepers in the city, as well as
dairymen who receive their milk by rail.

As for butter and cheese, it was estimated at the time of the census of
1895 that there were 357 establishments devoted to this industry. In the
matter of butter the Argentine does more than suffice to itself——though
ten years ago this was not the case——but to-day it exports considerable
quantities to England, Brazil, and South Africa.

To give the reader some idea of the dimensions which the butter-making
industry may attain in the future, we need only cite the following data:——

According to the national census of 1895 there were 22,000,000 cattle in
the Argentine Republic, of which only 1,200,000 figured as milch cows;
the value of the latter being not less than £14,000,000. Butter-making
and cheese-making were very restricted industries, especially the former,
and the statistics of 1895 mention an export of only 500 tons. But the
impulse was already given; and the combined efforts of agriculturalists
and cattle-breeders, directed towards the improvement of the bovine
species, were about to give an extraordinary impetus to the butter-making
industry. Let us see how the situation has improved between 1895, the
time of the last national census, and 1908, the year in which the
agricultural and pastoral census was taken.

This latter inventory has shown that in 1908 the Argentine Republic
contained 29,119,625 head of cattle, of which 2,163,900 were milch
cows and 12,825,904 were cows employed for breeding purposes. That is,
considering the milch cows only, we do not find a very extraordinary
increase since 1895, although all agricultural and pastoral industries
have undergone such a remarkable development. It is extremely probable,
however, that a certain number of milch cows are counted among the cows
employed for breeding purposes, as the latter do produce milk, whether
for consumption on the farm or for commercial purposes. Here are the
figures of the exportation of butter from 1895 to 1908:——

  Year.    Number of Tons Exported.    Value.
  1895               494              £24,720
  1896               903               45,160
  1897               600               29,980
  1898               927               46,320
  1899             1,179               58,980
  1900             1,056               52,740
  1901             1,510               75,500

  Year.    Number of Tons Exported.    Value.
  1902             4,125              £253,580
  1903             5,350               426,580
  1904             7,459               423,560
  1905             5,393               431,460
  1906             4,405               352,400
  1907             3,035               242,800
  1908             3,550               284,000

These figures are sufficiently satisfactory, but they are far from
representing the possibilities of the future, when the improvement of
breeds and the establishments of new creameries will permit of the
manufacture of butter on a far larger scale.

Among the present stock of 30,000,000 cattle there ought to be a
proportion of at least 45 per cent. of milch cows, or 12 millions; at
the very least 8 millions. Counting upon a daily yield of 17·6 pints of
milk per cow, valued, in its original state or in the form of butter or
cheese, at 2d. per litre, or 1·136d. per pint, we obtain a sum of £64,000
per diem, or £23,000,000 per annum.

But these calculations are purely theoretical. One thing, however, we can
say to the credit of the country, and that is that its dairy industry
is admirably adapted to the requirements of a great city such as Buenos
Ayres, which must perforce obtain that essential aliment, milk, under the
most favourable conditions of price and quality. An extremely perfect
equipment enables the industry to utilise its by-products. The problem is
not whether the Argentine can produce such a quantity of butter, but to
whom it can sell it, for in America Brazil is its only customer, while in
Europe it has to struggle against the competition of such countries as
France or Switzerland, which countries it would be difficult to displace.

As for cheese, we quote only from memory; its production is practically
limited by local requirements. The most important establishment in this
line is that belonging to Señores A. & R. Luro, on their estate, San
Pascual del Moro. Here the “moro” cheese is made, an imitation of the
Roman cheese, which is consumed in large quantities by the Italian colony.

_Breweries._——Although not directly dependent upon the produce of the
soil, since the country produces no hops, and, very little barley,
we will nevertheless mention the industry of brewing, as one which is
at present in a prosperous condition. It is undertaken by a number of
limited liability companies, of which the most important, due to the
initiative of M. Bemburg, is the _Brasserie Argentine de Quilmes_, a
French company with a capital of £360,000, which brews about 3,960,000
gallons of the 8,360,000 gallons consumed by the nation.

Next, with a much smaller output, comes the Bieckert Company, with a
capital of £362,880, and an output (in 1904) of 1,349,390 gallons; the
_Cerveceria Palermo_, with a capital of £132,000, and an output of
1,264,690 gallons; the _Rio Segundo_, in the Province of Córdoba, with a
capital of £80,000, and an output of 423,810 gallons; and the _Fabrica
Nacional de Cerveza_, with a capital of £120,000, and an output of
540,540 gallons.

Here are the statistics of production and consumption for the last six
years of the thirty-two Argentine breweries:——

  Year.     Production    Consumption
             (pints).       (pints).
  1902      49,096,235     46,933,520
  1903      57,043,272     56,360,350
  1904      65,663,824     65,077,538
  1905      94,264,637     86,833,214
  1906     113,967,478    113,898,794
  1907     123,404,693    115,746,857
           -----------    -----------
           503,440,139    484,850,273
           -----------    -----------

The national product has won a complete victory over the foreign article,
the importation of which is now negligible; and it has also popularised
the liquid dear to Cambrinus, which ten years ago was still a luxury.
One can only regret that agriculture, whose development has of late been
so enormous, has not as yet liberated the brewery from the necessity
of going to the foreigner for his malt, a product of barley which is
the principal raw material of beer. Hitherto, according to Girola, the
native barleys have been very little used, as they are not appreciated as
they deserve to be; and the growers, on the other hand, have not taken
sufficient pains to produce a good brewer’s barley. We must hope that
this situation will soon be changed, and that more pains will be taken in
the numberless fertile valleys of the Argentine in the growing of barley
and its improvement.

_Spirits._——The production of alcohol, unlike that of other industrial
products, is rapidly decreasing. In 1907 only 3,823,336 gallons were
produced, while in 1897 the production was nearly 6,600,000 gallons. But
we must not forget that the duty, which was originally 7 centavos per
litre (6·72d. per gallon), was in 1898 increased to 1 piastre per litre,
or 8s. per gallon; nearly five times the prime cost of the spirits.

_Weaving._——In concluding this sketch of the chief industries of the
country which are connected either with agriculture or stock-raising, it
is not out of place to speak of those which, although so far scarcely
developed, may do better in time under favouring circumstances.

With the development of cotton-planting and a plentiful supply of wool,
it seems that a large number of looms might be profitably established
and operated in the Argentine. But hitherto this industry, of prime
importance though it be, has been held in check by the expense of the
necessary machinery and of coal, which has to be imported from abroad,
and the scarcity of labour.

_Tanning._——This industry too, ought in time to occupy a place of far
greater importance than it does now; for the raw materials——hides and
quebracho, the best of tanning media, are present in abundance. To
understand the stationary condition of this industry we must remember
that it would require a considerable spare capital, as the hides have to
remain in the vats for several months, during which time the tanner has
need of capital at low terms of interest, which up to the present time
has not been available in the Argentine.

_Quebracho Wood._——Considering its future prospects, we must give a
special place to the industry which exploits quebracho timber; converting
the balks into railway sleepers, or extracting their tannin.

Red quebracho is found scattered profusely through the hundreds of square
leagues of the country known as the Chaco, which is situated between 24°
and 28° of south latitude, and 59° and 64° of west longitude, and also
in the Provinces of Santa Fé, Santiago de l’Estero and Corrientès. The
Chaco quebracho is superior to that of Santiago, which has the misfortune
to grow in nitrous alkaline soil, where the trees do not reach any
considerable dimensions. The Tucuman product is good, as it grows in a
damp soil, when it grows well and is full of sap. Best of all is the red
quebracho of Chaco; it is the richest in tannic products; according to an
analysis made in the United States, it contains 30 per cent. of tannin,
while the Santa Fé product contains less than 26 per cent.

Although quebracho wood is absolutely impervious to rot, and may thus
be used in building, for piles, quays, sleepers, etc., it is exploited
more especially for the production of tannin, as more profit is made by
so treating it. A sleeper requires a good-sized log, considerable time,
and much labour, to say nothing of the loss of wood; while the quebracho
extract may be obtained from logs of any size. To-day the value of a
sleeper, loaded on the track, is worth 6s. 2d., while three times as
much may be made by extracting the tannin. For this reason the principal
companies engaged in the quebracho trade have abandoned the manufacture
of sleepers, so that certain railway companies——the Buenos Ayres Western,
for example——have had to content themselves with iron sleepers.

Until quite lately quebracho wood was sawn into large round or squared
balks, which were then sent abroad, chiefly to Germany, where the tannin
was extracted. During the five years, 1899-1903, 1,044,000 tons of logs
were exported; in 1903, 200,201 tons; in 1904, 252,723 tons; in 1905,
285,897 tons; in 1906, 230,000 tons; in 1907, 246,514 tons; and during
the first six months of 1908, 127,609 tons. Various foreign and native
companies were formed, with large capitals, to convert the wood into
extract of tannin, and to export it in this form.

These companies are: the _Compañia Industrial del Chaco_, with a capital
of £348,000 and two factories; one at Las Toscas, in Santa Fé, with a
monthly output of 1000 tons of extract, and one at Calchagin, in the same
Province, which produces 600 tons per month. These factories are equipped
with German plant.

This company enjoyed a season of great prosperity in 1904; although its
factories produced only 12,000 tons of extract instead of 36,000, as they
could have done, a dividend of 42 per cent. was declared. Since then the
lack of outlet and the low prices have paralysed the development of this

Another tannin factory, able to produce 250 tons of extract, has been
established by Herwig Brothers at Pehuajó, Province of Corrientès.

The Compañia Industrial del Chaco is also about to erect, at Resistencia,
a factory with a capacity of 300 tons of extract per month.

_El Quebracho_ is the last of the companies established for the
extraction of quebracho tannin, and this also began to work under the
most auspicious financial conditions. Its factories are installed at
Fives-Lille, Province of Santa Fé, on land belonging to the “Kemmerich
Products Co.”; these have been equipped with the most perfect machines
of German make. The capital of this enterprise amounts to £32,000, which
it is hoped will be repaid by the profits of the first few years. The
monthly output is 450 tons.

The _Mocovi Tannin Co._, floated with a capital of £60,000, has a factory
some 60 miles east of Los Amores (Santa Fé), and has a capacity of 300
tons per month.

The firm of _Hardy & Co._, of Las Palmas, near Resistencia, own a factory
which cost £50,000, and produces 200 tons of extract monthly.

The _Formosa_ company, which deals in timber and quebracho tannin, has a
capital of £200,000. This company owns 96 square leagues of forest——some
880 square miles——which are estimated to contain 2 million tons of
quebracho. This company intends to establish a factory capable of
producing 15,000 tons of tannin yearly.

_The Compañia Azucarera de Resistencia_, with a capital of £22,700,
produces 80 tons of extract monthly, and the factory of _M. Benito
Pinasco_, at Guaycurú, on the Santa Fé railway line, produces 30 tons.

Besides these factories, Señors Charles and Joseph Casado, the Argentine
owners of 2800 square leagues of land (over 25,000 square miles), in the
Paraguayan Chaco, have established two factories, one at Puerto Casado
and the other at Puerto Sastre, which produce, respectively, 500 and 1000
tons of extract per month.

The average yield of quebracho wood is 25 per cent. of extract; but as
the extract contains a number of resinous and colouring matters, which
must be eliminated during the process of manufacture, the net yield is 22
to 23 per cent. of solid extract containing 20 per cent. of water, which
contains 70 to 73·5 per cent. of tannic oxide——that is, pure tannin.

The system employed in extracting the tannin is based upon diffusion.
Firstly, the wood is reduced to powder by means of machines which cut or
saw the wood, into which the logs are fed entire. Then, when the wood is
converted into sawdust or fine chips or shavings, it is passed through
extractors or diffusers, which separate the cellulose from the tannin,
which is finally concentrated to the degree demanded by the market by
means of vacuum pans.

During five years, from 1904 to 1908, the exports were: 20,111 tons in
1904; 29,408 tons in 1905; 30,839 tons in 1906; 28,190 tons in 1907;
48,160 tons in 1908.

Germany and the United States are the chief buyers of this valuable
product, which forms the principal wealth of the northern part of the

In the first edition of this book we prophesied a rapid and prosperous
development for this industry, which had already received a considerable
impetus; unhappily this prediction has not been realised in practice,
and the quebracho industry has suffered, not precisely a crisis, but a
diminution of its outlets which has seriously prejudiced its interests.

This trouble is due to various causes. Firstly, the ruinous competition
between the various firms producing quebracho tannin; a competition
which has now happily disappeared, thanks to an arrangement concluded
between the principal companies, on the initiative of M. Hermann
Schlieper; secondly, to the almost prohibitive duties which the German
Government has imposed upon the importation of the product; thirdly, the
indifference shown by the railway companies in using on their permanent
way sleepers of steel rather than of quebracho, although the latter is
more durable. It is to be hoped, however, that in course of time these
causes will disappear, and that this industry will in future recover all
the elements of progress.

_The Timber Industry._——Another industry which is equally dependent
upon the forestal wealth of the Argentine is that whose object is the
exploitation of the various and valuable kinds of wood to be found in
various parts of the country, especially in the forests of the Chaco and
of Formosa.

The variety of costly woods to be found in these forests is astonishing.
Recently more than thirty-three species have been classified, all of
industrial value; the best known, besides the quebracho, being the
acacia, algarrobo, button-tree, lapacho, bay, the smaller cedar, and many
other varieties, black, white and red.

To exploit this forestal wealth a limited company has lately been formed
with a capital of £352,000, which proposes to erect two important
saw-mills in the Chaco. This company already owns about 2300 square miles
of forest, and is thinking of increasing its domain by further purchases.

_Fisheries._——Finally, quitting the forests for the seas, we must mention
one other industry, at present unimportant, but apparently capable of
considerable development: namely, the sea fisheries.

Owner of an immense coast-line bathed by the southern seas, the Argentine
has an appreciable store of wealth at her disposal; which so far has been
drawn upon only in a modest and almost secret manner, but which is now
beginning to attract attention, to the great benefit of the country and
of those who have entered upon this industry.

Since Prof. Nordenskjold wintered in Antarctic waters, Captain Larsen
has been able to report a source of great wealth, which can be easily
and profitably exploited, in the fishing of these waters; and upon his
arrival in Buenos Ayres he put himself in communication with a group of
Argentine capitalists, who decided to form a limited company by the name
of _La Pesca_, with a capital of £32,000.

The results of the first season’s fishing was so productive, and the
number of whales harpooned and “cut in” so large, that, according to a
report which has been sent us, this company was able, at the end of the
first year, to return the capital sunk in the firm of dividends.

Naturally such results cannot fail to draw new adventurers into this
industry, which in turn will increase and develop the wealth of the
country, at the same time procuring for the country a class of men formed
by the strenuous labour of Antarctic life; a class of which the young
Argentine navy has the greatest need.

                              CHAPTER III


The Argentine has not entered the industrial age——She has no
    coal-mines in operation, no natural motive forces of any

MINES——Symptoms of the awakening of the mining industry——Numerous
    lodes in the Andes——The mines of La Rioja and Catamarca——Mines
    in other provinces and territories——Mining legislation.

ELECTRIC INDUSTRIES——Tramways; their development, their perfected
    equipment, and their profits——Progress of electric lighting——

VARIOUS INDUSTRIES——List of various industries established in
    Buenos Ayres, according to the last census, with the value of
    their products.

Comparison between the statistics of 1895 and those of 1904——
    Progress realised in 1908——Workshops and factories.

The Argentine Republic, as we have already on various occasions
explained, has not yet entered upon the industrial phase. All its capital
and all its energies tend toward the exploitation of the soil, and as the
results are greater than the boldest speculator could have predicted,
the country has no need at present, with its small population, to launch
itself into the unknown by entering the province of industry.

Moreover, the Argentine does not so far possess coal or iron measures
easily workable, and has very little labour at its disposal, and
therefore should not disperse its activities among too many objects. It
is its best policy to limit itself to producing articles that it can
make more cheaply than the foreigner; not artificially to develop its
industries in the shelter of an ultra-protectionist tariff. It would fall
to the consumer to pay for such products of the national industry, and
the state would lose a serious portion of its revenues.

In other words, we may well ask whether the Argentine, in addition to its
agricultural wealth, should pretend to a great industrial future, like
that of the United States.

So far we cannot reply in the affirmative; not, at least, under present
conditions. However rich the subsoil of the country may be, a matter at
present uncertain, especially in respect of coal and iron measures, which
are the basis of all industries, we must remember that the majority of
these measures are situated in the region of the Cordillera, 4000 to 5000
feet above sea-level, over 900 miles from the coast, far from roads or
waterways, and are consequently very badly situated for the establishment
of industrial centres.

What coal and iron the Argentine may possess is distributed over a region
of some thousands of miles in extent, which does not appear to contain
continuous lodes or measures, and in which there are no real valleys or
river-basins. Putting all questions of tariff aside, but considering the
constant lowering of freights, we think the Argentine will always find it
cheaper to obtain its supplies from abroad, except such as it can produce
economically, rather than attempt to embrace all industries in its dreams
of greatness.

Neither can we expect from the utilisation of natural motive forces a
development which might in some degree compensate for the absence of
fuel. There are a few waterfalls in Córdoba and in Tucuman, but such
energy as they might furnish would hardly allow one to hope much from
their adaptation to industrial uses. One of the most important of these
falls is that below the Barrage San Roque, in the Sierra de Córdoba; it
belongs to the North American Company, “Luz y Fuerza” (Light and Force).
The company’s plant gives a yield of about 3000 horse-power, which is
employed, for the greater part, in providing light and motive power to
the town of Córdoba, and also for the production of carbide of calcium.
Another installation, belonging to the Molet Company, has a capacity of
some 700 or 800 horse-power, which is employed in the same manufacture.

The falls of the Yguassu, on the upper Parana, some 230 miles above
Corrientès, on the confines of Brazil, Paraguay and the Argentine, have
been described as a marvel of nature. It would seem that these falls
represent a force three times greater than Niagara; their width is 12,000
feet, or more than two miles, with a fall of 212 feet. Unfortunately
this cataract is on the border of the Argentine territory, in a region
of forests accessible only with difficulty, and will probably flow for
many years yet before any one profits by this enormous natural source of

_Mines._——Although the industrial future of the Argentine is as yet by no
means clear, we must admit that during the last four years there has been
a livelier movement in favour of gold, silver, and copper mining, which
has resulted in the flotation of several important limited companies.
It was to support these first steps that the Government built an aerial
railway——one of the boldest works ever attempted in the whole world——to
exploit the rich mines of Famatina.

“Over the whole stretch of the eastern slopes of the Andes,” says an
important official publication[84] which we take for guide, “from Bolivia
to Tierra del Fuego, the existence of numerous mineral-bearing regions
is proved; notably in the Provinces of Mendoza, San Juan, La Rioja,
Catamarca, Salta, Jujuy, Tucuman, Córdoba, and San Luis, where traces of
ancient mineral workings have been discovered.”[85]

[Footnote 84: _Description sommaire de la République Argentine comme pays
d’immigration, 1904._]

[Footnote 85: The Argentine lost much of its mineral wealth when Potozi
and La Paz were lost to Bolivia.——[TRANS.]]

There are many villages which ever since the Spanish Conquest have
drawn their sustenance from the gold and silver which their inhabitants
obtain, by rudimentary processes, from the beds of stream or river, and
by plain mining. Also, despite the difficulties of transport, various
well-organised companies have obtained very fair results from their
workings, since they obtained their concessions a few years ago. Now that
the feelers of the railway systems have reached these districts, and the
mining companies have established aerial cable-ways to connect them with
the mines, we can already perceive a greater vitality in this industry.

In addition to the wealth of the Cordillera, prospectors are discovering
new lodes in the interior of the country; but, as always happens, miners
prefer to gather in already familiar districts, rather than undertake
long journeys, and the labour of prospecting at their own expense.

The best-known mines of the Argentine are distributed as follows:——

In the Province of _Mendoza_ there are mines of copper, silver-bearing
galena, gold-bearing quartz, coal, alabaster, slate, and marble, and
wells of petroleum; in the Province of _San Juan_, of gold-bearing
quartz, silver, copper, antimony, coal, sulphur, and amianthus.[86]
In view of the development which this region may undergo through the
exploitation of the coal-measures, the Great Western Railway has decided
to construct a branch line as far as the coal mines of Salagasta

[Footnote 86: Amianthus——the best quality of asbestos.——[TRANS.]]

The Province of _La Rioja_ has been known for a long time for its rich
mines of metallic silver, and also for its copper mines, whose ores
contain a high percentage of gold and silver; and for its gold “placer”
mines. It is to facilitate the working of these mines that the aerial
cable-way is being constructed, which will unite Cerro de Famatina and
the mining centre of Chilecito with the railways. Here, as everywhere,
skilled miners are somewhat scarce.

The Province of _Catamarca_, the centre of the Capillitas mining country,
possesses copper mines with a high percentage of silver and gold, which
have been worked for more than thirty years. These mines, which are, it
appears, very rich in minerals, have been acquired by a foreign company,
and will be the object of an important enterprise; here, too, an aerial
cable-way will be built to transport the ore from the mines to a lower

There are also in this region two important smelting works; “Le Pilcian”
and “La Constancia,” which are buried in the depths of the forests of
carob-trees, which furnish abundant fuel. In other parts are found
surface veins of copper, silver-bearing galena, bismuth, antimony, mica,
gold-bearing quartz, as well as “placer” mines and coal-measures.

The Provinces of _Salta_ and _Jujuy_, which possess rich veins of
auriferous quartz, argentiferous galena, copper, borate of lime, lignite
and petroleum, are famous for the gold obtained from the streams that
descend from their mountains. Undertakings have been formed with foreign
and native capital, and profitable results are expected. The extension
of the Argentine railways to Bolivia will still further develop the
exploitation of mining districts all through this region.

In former times silver mines were worked in the Province of _Tucuman_. In
Aconquija also we find mines of copper which must be a continuation of
those of Catamarca.

The Provinces of _Córdoba_ and _San Luis_, besides ascertained veins of
gold-bearing quartz, galena and copper, contain mines of manganese and
wolfram, and well-known quarries of marble, and of onyx, both green and
of other shades.

In the Territories of _Tierra del Fuego_ and _Santa Cruz_ the sands along
the Atlantic coast contain, especially after storms, an abundance of gold
in powder and small nuggets, whose extraction gives employment to numbers
of workers.[87] There also are seams of lignite and of peat. Finally, in
Santa Cruz there are several salt workings, the produce being sent to
Buenos Ayres.

[Footnote 87: few years ago a company was formed with North American and
Argentine capital to work the sands in this manner in Tierra del Fuego.]

The River _Chubut_, in the Territory of Chubut, brings down fine gold
along its bed, as do its numerous small tributaries, which rise in
the Andean slopes. The presence of gold more than 100 miles from the
Cordillera tempted some colonists to organise an expedition; at the foot
of the mountain they found gold in nuggets.

Another company exploits the salt pits of the Valdez Peninsula, and
another the quarry of flat granite slabs, known as the Atlas Quarry.

For many years now large quantities of gold have been found in the
rich “placers” of the Territory of Neuquen, where copper also has been
discovered, silver-bearing galena, coal, and petroleum. The gold taken
out of the washers of Villa Michicó and the neighbourhood is estimated at
330 lb. avoirdupois annually.

In the Territory of _Rio Negro_ there are abundant quarries of gypsum,
limestone, and other building materials; in that of the _Pampa Central_
copper has been recently discovered and is being worked; in that of
_Misionès_ there is native copper, iron, and manganese; in that of the
_Andes_ (Puña de Atacama), there are immense deposits of borate of lime,
as well as veins of quartz and “placers.”

Considering the vast extent of these territories, which have never been
seriously explored except at a few points, we have every reason to
believe that it will be many years before we have even an approximate
knowledge of the mineral wealth they contain; but the data gathered up to
the present time augur well for the future of the mining industry in the

We will add finally, as a further reason for success, the fact that the
law regarding mines is remarkably liberal; the State may not exploit them
on its own account, but concedes them to any adult applicant capable of
administering his own property.

The same mining laws are in force throughout the country. To acquire
a claim it suffices to present a written demand, containing an exact
indication of the position and nature of the claim demanded, the details
of its discovery, and all other useful information, accompanied by a
sample of the mineral. Immediately upon the presentation of this demand
the administration enters it with the date of deposition, in order
to prove the right of priority; and directly the concession has been
surveyed and delimited, the claimant has full rights in his mine and may
dispose of it as he wills. The mine is untaxed, and so are the mineral
products, whether sold at home or abroad. The only obligation imposed
upon the miner is that he shall work his mine with at least four miners
during 230 days of the year; if this condition be not fulfilled, any
other person may demand the concession of the abandoned mine.[88]

[Footnote 88: Senator Domingo Perez has just laid before Parliament, a
projected law substituting a fine or tax for this obligation.]

_The Electrical Industry._——It is greatly to the credit of the Argentine
that everything that makes for progress, for an increased welfare or
greater convenience, is immediately applied by the Republic. The latter
quickly absorbs all improvements and, profiting by the experience of
older nations, immediately puts new procedures into practice, instead of
lingering in the rut of outworn systems. Thus it was, for example, in
the case of the electrical industry. The Argentine has no need, in this
respect, to envy the most advanced nations. In Buenos Ayres——for only
the large centres can be progressive to this extent——all the tramway and
electric lighting concerns are most excellently equipped, and are in this
matter equal to the best installations of England or the States.

The electric tramway companies, whose tracks cross Buenos Ayres in every
direction, are seven in number, forming a network of lines which are
distributed as follows:——

The “Anglo-Argentine” Company, 18·8 miles; the “Capital” Company, 34·7
miles; the “Metropolitan” Company, 19·8 miles; the “Grand National,” 76·9
miles; the “Compagnie Lacroze de Buenos Ayres,” 44 miles; the “Southern
Electric Tramways,” 49 miles; and the “Harbour and City of Buenos Ayres,”
6·8 miles.

The great event of 1908 was the amalgamation of these companies by the
“Anglo-Argentine,” which proposes to unite these lines under a single
management, in order to form a vast network, comprising all the principal
lines, with the exception of the “Compagnie Lacroze” and the “Harbour
and City of Buenos Ayres.” The total capital invested in this important
undertaking amounts to not less than £14,000,000.

It is to be hoped that this great financial operation, which will place
the Anglo-Argentine Company at the head of the most important tramway
companies of the world, will not fail to benefit the public, and that the
Company will also turn its attention to improving its equipment and to
lowering its fares to a uniform rate.

On the other hand the number of passengers carried by the Buenos Ayres
tramways is constantly increasing, as may be seen in the following

           Passengers Carried.         Gross Profits.

  Year.    Horse      Electric.      Horse    Electric.   Total Profits.
         Traction.                 Traction.
  1901   95,436,421   30,088,803    £848,318   £294,822     £1,143,140
  1902   92,638,025   33,593,734     827,979    334,060      1,162,039
  1903   71,048,519   62,670,779     636,801    596,719      1,233,520
  1904   65,532,745   82,746,352     587,022    805,071      1,370,093
  1905   34,486,547  174,455,022     489,741  1,049,949      1,539,690
  1906   24,927,089  175,773,158     232,903  1,565,472      1,798,375
  1907    7,338,563  217,702,183      67,659  1,926,054      1,993,793
  1908      293,269  254,780,627       1,980  2,229,547      2,231,527

These figures go to confirm all we have said as to the enormous
development of capital in the Argentine, and of its commercial activity.

_Electric Lighting._——In the matter of illumination, Buenos Ayres was
early discontented with the old methods; electricity is now preferred
both for public and private purposes. Today there are 721 miles of gas
pipes and 233 miles of electric cables.

The capital of the electric lighting companies is estimated at nearly
£2,000,000, and their output at 30,905 horse-power. The electrical supply
is chiefly in the hands of the German Electricity Company, with a capital
of £1,850,000, which has already absorbed the two companies previously
in existence. Its equipment was furnished by the famous firm of Siemens
Halske, which stands in the front rank of German electrical manufacturing

_Telegraphs._——Another mark of progress is the continual extension of the
telegraphic system. The national, provincial, and private lines together
represent to-day a length of 31,215 miles, of which 15,125 belong to the
State; twenty years ago the mileage was barely half this figure.

As for telegraphic communication with the exterior, there are two foreign
cable companies, one possessing the cable running to the United States
_via_ Galveston, and the other that communicating with Europe _via_
Madeira. Communication between London and Buenos Ayres is now established
in about forty-five minutes, while a few years ago the average was five

_Telephones._——The telephone is used in the capital and the principal
towns——Rosario, Córdoba, Santa Fé, Tucuman, Mendoza, etc. Buenos Ayres
is connected by telephone with Montevideo (124 miles), Rosario (190
miles), and will shortly be connected with Bahia Blanca (437 miles). The
two companies established in Buenos Ayres, the “Telephonic Union of the
Rio de la Plata” and the “Co-operative Telephonic Company,” represent a
capital, respectively, of £243,963 and £582,032.

All these data, which we merely mention in passing, go to prove that the
Argentine has assimilated all the details of industrial progress, even
in their most improved forms. Experiments in wireless telegraphy are
now being made with a view to communicating at long distance with the
steamers leaving or approaching Buenos Ayres.

_Various Industries._——At the end of 1908, according to the statistics
of the official industrial census of that year, which was undertaken by
the Department of Commerce in the Ministry of Agriculture, there were,
in the city of Buenos Ayres, 10,349 factories or workshops, representing
a capital of £23,443,144. The sales of these factories, etc., for 1908,
amounted to £47,048,773. The raw material consumed was worth £25,223,681.
The motive power employed in these factories was equivalent to 105,575
horse-power, and the number of workers employed was 118,315. Of the
owners, 14·8 per cent. were of Argentine nationality.

If we compare these figures with those of the municipal census of 1904,
we obtain the following results:——

                                     Census of 1904.   Census of 1908.

  Number of factories and workshops       8,897             10,349
  Capital employed                      £8,733,127        £23,443,144
  Sales                                £16,143,832        £47,048,773
  Motive power consumed (H.P.)          19,458            103,575
  Workmen employed                        68,512            118,315
  Raw material consumed                     ——            £25,223,681
  Masters or owners of Argentine }         12·35             14·81
    nationality (per cent.)      }

We see that even in four years there has been a remarkable development
of the industries of Buenos Ayres. This development is especially
demonstrated by the increase of the capital represented by the sales of
merchandise or manufactured articles and by the horse-power employed. At
the end of four years the capital has increased by nearly 300 per cent.,
the sales by the same amount, and over five times the motive power is

This progress is certainly remarkable, but it does not perhaps truly
represent the actual progress achieved. The Director of the Census,
Señor Ricardo Pillado, declares that “the general opinion prevalent in
the offices of the census department is that certain important items of
information, relating to matters of great interest, have been concealed
by interested persons. Among such we may cite the value of output, the
amounts of sales, the capital employed, the number of employés, etc.;
as the manufacturers are anxious, above all, to shelter themselves
from a possible increase of taxation or licences.” So that in spite of
the satisfactory results of the last census, in spite of the notable
increase of wealth and industry recorded, the figures given are far from
representing the true significance of the industries of the capital city.

The results already given may be classified as follows, under the
headings of the kind of industry, capital employed, value of produce,
motive power, and employés engaged:——

                                                      Value     Number of   Motive
  Industries.                          Capital.        of         Hands     Power
                                                   Production.  Employed.   (H.P.).
  Gas lighting, electric lighting, }
    lighting installations,        }  £6,712,470   £2,227,376      4,754     66,392
    and plant                      }
  Alimentary products                  3,873,386   10,520,532     14,227     11,756
  Clothing and toilette                3,256,512    9,156,774     37,259      2,586
  Woven fabrics, leather and furs      1,967,672    5,084,053     10,861      5,451
  Metal work, etc.                     1,598,722    2,916,793     10,090      4,311
  Graphic arts, paper                  1,489,525    2,178,294      8,296      2,758
  Woodwork, cabinet-making, etc.       1,461,103    4,336,954     11,736      5,570
  Tobacco factories                      605,487    2,249,836      2,829        539
  Chemical products                      432,160      754,207      1,774      1,231
  Building                               408,056    1,097,219      4,415        719
  Art products, ornaments, etc.          301,244      729,903      2,199        367
  Various industries                   1,364,881    5,779,208      9,875      3,895
                                     -----------  -----------    ———————    ———————
              Totals                 £28,421,318  £47,032,146    118,315    105,575
                                     -----------  -----------    ———————    ———————

The establishment of large electric works which furnish current at very
moderate rates, as well as the advantages of electro-motors as compared
with steam-engines, have led a number of industries to adopt new systems
of motive-power. Of a total of 105,575 horse-power, 12,505 are furnished
by electricity, 90,655 by steam, 1939 by gas, and 476 by naphtha.

Among those industries which are still in a state of infancy we must
mention the chemical industry; this is limited to a few candle and
soap factories, sulphuric and nitric-acid works, scent distilleries,
dye factories, etc., whose produce is insufficient to the needs of the

The match factories, on the other hand, furnish a good article and are
sufficient to the country. The consumption at present exceeds 200 million
boxes per annum.

We must also mention the existence of a few paper-mills, glass furnaces,
and various works where certain agricultural necessities are produced:
such as iron wire, fencing, etc., and also certain wheel factories; but
here again importation furnishes a great proportion of the articles

                               CHAPTER IV

                           LIMITED COMPANIES

BANKS——International character of Argentine banking——Evolution of
    banking machinery——List of the principal banks, with amount of
    capital and business done——Conditions peculiar to Argentine
    banking; the lack of moveable reserves——Rates of interest on
    account, on deposit, and on advances——Statistics of the deposit
    accounts of the principal banks——Exchange operations: their
    decrease since the determination of a fixed monetary ratio——The
    Clearing House; the importance of its operations.

_The Bank of the Nation_——Its history——The formation of its
    capital——Political interference in the nomination of its
    Directors——Statistics of its accounts——Rapid increase of
    deposits——Difficulty of realising capital——The resumption of

_The Bank of the Province of Buenos Ayres_——Its reorganisation——Its
    present prosperity.

_Mortgage and Loan Banks_——History of the _Banque Hypothécaire_ of
    the Province of Buenos Ayres——Bankruptcy——Arrangement between
    the bank and its creditors——Proposal of reorganisation——Laws
    relating to mortgage in the Argentine——The National Mortgage
    Bank; statistics of business done——Joint-stock loan companies;
    their capital and amount of business done.

THE STOCK EXCHANGE (BOURSE)——History of this institution——Its
    importance; its functions; amount of business done——The
    decrease in its transactions since the cessation of speculation
    in currency or the monetary ratio.

The Bourse is a private establishment——Its membership and its
    regulations——Statistics of business done during the last
    ten years——Securities quoted on the Buenos Ayres Bourse——
    Decrease in the total amount of business done during the last
    five years——The monetary reform of 1901 as a factor of this
    decrease——The place occupied by the Stock Exchange in the life
    of the nation.

_Joint-stock Companies_——The development of joint-stock companies——
    Legislation affecting such companies——Abuses committed in the
    formation of such companies, due to speculation——Statistics of
    capital invested in joint-stock companies before and after the
    speculative crises of 1890——Revival of such companies, in a
    sense more consistent with the development of the country.

In any sketch of the commercial life of the Argentine, we must include
the Bourse and the banks, which play an important part in the business
life of the community, owing to the facilities which they afford to all
kinds of commercial transactions.

To-day such transactions represent a considerable figure, and involve a
movement of capital amounting to scores of millions. There is obviously
need of an organised body designed to simplify this movement, and to
place at the disposal of trade the means of effecting its exchanges with
the least possible displacement of capital.

_Banks._——It was inevitable that in the Argentine the evolution of
banking should be towards an international character, since the trade
of the Republic is almost entirely with foreign countries. Moreover,
this trade is very largely in the hands of foreigners: French, English,
Germans, Italians, Spaniards, Belgians, or Americans from the States;
which fact has resulted in the formation, in the city of Buenos Ayres,
of various groups of banks, corresponding, in respect of their founders
or their capital, to these various nationalities. Each of these
establishments is in constant communication with the country of its
origin, and seeks to gather round it clients of its own nationality.

Both in the matter of importance and that of organisation the banks
doing business in the Argentine leave nothing to be desired. As we shall
presently see, the sum of the capitals of all these banks amounts to a
total of nearly £26,000,000; a sum which appears to be amply sufficient
for all the present requirements of trade.

Working under a system of free competition, and handling a considerable
capital, they have been induced to offer greater and greater facilities
to trade, in order to increase the number of their clients and the volume
of their operations. Moreover, the suppression of the gold premium has
removed one of their chief sources of profit; so that they have been
forced to obtain, through the extension and perfection of their ordinary
banking operations, the compensatory increase of business which allows
them to maintain the volume of their profits and their dividends.

One cannot subject these banks to a rigid comparison; each of them
conducts its business for the benefit of clients of its own nationality,
and in consequence must accede to their usages. The English banks, for
example, have as their clients railway companies, a large number of
export houses, and steamship lines, on account of the ties which connect
them with the London market and its principal financial groups. The
German Bank principally serves German industrial houses, and also German
exporters. The French Bank of the Rio de la Plata, owing to its relations
with the Paris market, and its strong position in Buenos Ayres, is of
inestimable service to French commerce in the Argentine. The Italian
banks share the custom of the Italian colony, which, on account of its
numerical importance, gives rise to a great deal of small business.

_The Banco Español del Rio de la Plata_, which has branch establishments
in Paris, London, Genoa, and Madrid, is in direct relation with the
financial circles of those cities, and facilitates all banking operations
between the various Spanish-speaking countries. Founded by the financiers
of Buenos Ayres, and afterwards enlarged by French capital, the Spanish
bank, which has admirable premises, has succeeded in surrounding itself
with a _clientèle_ of great landed proprietors, by offering them all
kinds of facilities for the conduct of business operations connected with
the sale of national produce. Their branch establishment in Paris is the
favourite bank of the numerous Argentines who go yearly to Europe on
business or for pleasure.

In this congeries of banks the Argentine is represented by two great
establishments: one of these, the _Banco de la Nacion Argentina_, is a
State institution which, in addition to the business transacted with
the Government, runs cash and deposit departments like other banks;
the other is the _Banco de la Provincia de Buenos Ayres_, whose origin
was in the reconstruction of the historic bank of the same name, the
collapse of which was provoked by the terrible financial crisis of 1890.
The excellent results of the last three years which we shall presently
consider in detail, allow us to predict a brilliant future for this

We shall give, in the following table, a list of these banks, in the
order of their establishment, with details as to their capital, reserves,
transactions, and dividends.

As lately as the year 1907, it was extremely difficult to obtain exact
information as to the operations of financial establishments, as there
was no law obliging them to publish periodical statements of their
position. From this state of affairs resulted this curious fact: that
if one wished to ascertain the situation or study the operations of
the English banks, for example——establishments which effected their
business transactions by the aid of funds deposited by inhabitants of the
Argentine——one was forced to resort to the records of the London Stock
Exchange, in order to examine the reports and balance-sheets presented
each year by the administrative Boards to the shareholders residing in
England. But, very fortunately, thanks to a decision of the ex-Minister
of Finance, Dr Eleodoro Lobos, this omission has been remedied, and it
has been decreed that all financial establishments must in future supply
the Ministry of Finance, during the first days of each month, with an
explanatory balance-sheet giving details of their transactions. This
information is made public, so that not only the Government, but anyone
devoting himself to the study of commercial or financial affairs, may
obtain an exact knowledge of the situation of the leading banks, and
thence of the market, or indeed of the country in general.

All these banks work with a relatively large capital, which is mostly
deposited. To understand the situation we must remember that banks are
obliged, in the Argentine, to keep going by their own means, and are
not allowed the resource of mobilising their turnover by rediscounting
at the Bank of the Nation. The latter, indeed, is rather a competitor
than a prop; since it also seeks the custom of private clients. Thus the
funds at the disposal of the banks consists of their own capital and
their deposit accounts——these latter varying greatly from one period to
another——and they cannot benefit by the supplementary force arising from
a credit at the National Bank.

                                        |         |         Capital         |            |
                   BANK                 | Founded +------------+------------+   Reserve  |   Last
                                        |   in    | Subscribed |  Deposited |    Funds   | Dividend
  London and River Plate Bank           |  1862   | £2,000,000 | £1,200,000 | £1,200,000 |    20%
  London and Brazilian Bank             |  1862   |  2,000,000 |  1,000,000 |  1,000,000 |    15%
  British Bank of South America         |  1863   |  1,300,000 |    650,000 |    600,000 |    13%
  Italia y Rio de la Plata              |  1872   |  1,200,000 |  1,200,000 |    242,600 |    10%
  Español del Rio de la Plata           |  1886   |  4,400,000 |  3,346,671 |    738,848 |    12%
  Francès del Rio de la Plata           |  1886   |  2,400,000 |  2,350,340 |    140,562 |     9%
  Nuevo Banco Italiano                  |  1887   |    264,000 |    264,000 |    103,400 |    15%
  Popular Argentino                     |  1887   |    429,836 |    427,251 |    197,296 |    11%
  Anglo-South-American Bank             |  1888   |  2,500,000 |  1,250,000 |    750,000 |     9%
  Banco de la Nacion Argentina          |  1891   |  9,697,600 |  9,697,600 |  5,332,319 |    ——
  Banco Aleman Transatlantico           |  1893   |  1,000,000 |    880,000 |    159,232 |     9%
  Banco Popular Italiano                |  1899   |    110,170 |     79,752 |      3,696 |    ——
  Banco del Rio de la Plata             |  1902   |     88,000 |     87,340 |      6,864 |    10%
  Banco de Credito Argentino            |  1904   |    247,280 |    148,783 |       ——   |    ——
  Banco de la Provincia de Buenos-Ayres |  1906   |  1,760,000 |  1,760,000 |     89,320 |    10%
  Banco de Galicia Buenos-Ayres         |  1905   |    264,000 |    264,000 |      2,438 |     4%
  Ernesto Tornquist & Co. Ltd.          |  1874   |  1,500,000 |  1,500,000 |    230,263 |    10%

This lack of fluidity as affecting their capital is doubly inconvenient;
it forces the banks always to keep their cash reserves at a high level,
and also prevents their finding employment for their deposited funds——at
any rate in the case of accounts at sight. Without this faculty of rapid
mobilisation they cannot enlarge, by operations of short duration, the
sums which they receive in deposit, and consequently cannot allow any
appreciable interest on that portion of their capital. Some banks are at
present paying 1 per cent. on current accounts; others, and notably the
National Bank, allow their depositors no interest. For deposit accounts
at three months the interest is usually 3-1/2 per cent.

As for the rates of discount, these have fallen considerably in the
last few years; partly on account of the increasing competition between
the various financial groups, and partly on account of the abundance of
capital after several years of good harvests. After standing for a long
time at 7 and 8 per cent., the average rate for first signatures tends
nowadays to settle at 6 per cent.

This is a fact which may surprise those who believe that the monetary
situation of a country is always affected by the premium on gold, but we
shall see, in the chapter on finance, that there is, as a matter of fact,
an influx of gold into the country, and that its movable resources have
never been more abundant. The circulation of notes is now guaranteed by a
cash reserve of more than 65 per cent.

The banks receive deposits at sight, at thirty, sixty, ninety, and one
hundred and eighty days. They also receive deposits on the “savings-bank”
system: that is they pay 3-1/2 or 4 per cent. upon deposits not exceeding
5000 to 10,000 piastres in paper money, or 3000 to 5000 in gold
(according to the particular bank)——that is, £440 to £880 in notes, £600
to £1000 in gold——on condition that if the money is withdrawn under sixty
days no interest will be allowed. After the lapse of sixty days the money
may be withdrawn at the will of the depositor, and the interest is added
since the day of deposit. Small savings deposited on this system attain
to considerable proportions, and the public is becoming more and more
familiarised with business of this kind.

One item that differs very sensibly from European usage is the rate of
interest charged on current debit accounts. As the Argentine has no law
regulating this rate, there have been times, happily now past by, when
this rate has been as high as 10 and 12 per cent. Of late years the
Government has paid, as a maximum, 6 to 7 per cent. and that in moments
of disequilibrium, when international complications were feared, and the
bank rates had risen in England and elsewhere.

For private individuals conditions are also easier, on account of
competition, and 7 per cent. has become practically the average rate. In
certain banks the rate on debit accounts has even fallen as low as 6 per

The following table indicates the movements of the principal accounts,
during the years 1906-1908, in the case of the various banks which
publish their balance-sheets, in the Argentine.

On an international market like that of Buenos Ayres exchange operations
are naturally most attractive. Since the suppression of the gold premium,
which has reduced the risks to a barely sensible amount, these operations
no longer retain their old speculative character; but, on the other
hand, the profits to be drawn from operations of this kind have greatly
diminished, so that business has gained only in safety and extent. We
may here recall the fact that speculations in gold, which amounted to
1,234,000,000 piastres paper (£108,592,000) in the year 1899, had fallen
to 211,000 piastres in 1904, and have now entirely ceased.

Moreover, in order still further to avoid all risks, such business is
now done by means of cable transfers, instead of by cheques at one month
from date as formerly; thus avoiding as far as possible any variation in
the rate of exchange. It is chiefly during the period of exportation that
these drawing transactions become of great importance.

Exchange business is transacted on a gold basis; that is, on the basis
of the gold piastre, which is equivalent to a dollar, or to 5 francs
of French money, or 4s. of English; as for settlements, they are made
indifferently in gold or paper, on the basis of 44 centavos, or ·44 of a
piastre in gold, for one piastre in paper.

Formerly the rate of exchange used to vary very perceptibly with the
seasons. The banks used to buy during the export season, which for
grain and wool lasts from December to March, and consequently profited
by the abundance of the market to discuss the price. They then sold to
import houses during the slack season, sometimes making a profit of 6 to
10 centimes. Now competition has greatly reduced these margins, which
scarcely vary at all, in a normal season, except to the extent of an
insignificant fraction.

                                                                       MILLIONS STERLING
  BANKS                                    Deposited                      Discounted                     Cash Reserves
                                         Gold    Paper[89]              Gold     Paper[89]             Gold       Paper[89]

  {National Argentine                    ·54     14·773                 ·26      15·004                1·86       4·611
  {Spanish of the Rio de la Plata        ·52     10·076                 ·58       8·289                 ·26       2·84
  {French  of the Rio de la Plata        ·88      4·206                1·16       4·160                 ·62       1·117
  {Italian of the Rio de la Plata        ·38      6·204                 ·8        4·259                 ·42       1·645
  {New Italian                           ·08      1·804                 ·16        ·950                 ·02        ·361
  {Popular Argentine                     ·004      ·801                 ·01        ·809                 ·02        ·255
  {Province of Buenos Ayres              ·18      4·593                 ·042      3·991                 ·04       1·188
  {German Transatlantic                  ·26      2·367                 ·94       2·552                 ·34        ·533
  {Anglo-South-American                   ..        ..                   ..         ..                   ..          ..
  {British                               ·28      2·886                 ·76       2·561                 ·30        ·774
  {German                                ·02       ·109                 ·06        ·325                 ·06        ·299
  {London and Brazilian                  ·16      6·688                 ·58        ·545                 ·12        ·185
  {London and the Rio de la Plata        1·46    11·906                1·64       7·629                 ·96       3·602

  {National Argentine                    ·98     16·940                 ·4       18·832                3·612      4·840
  {Spanish of the Rio de la Plata        ·32      9·880                 ·38       8·553                 ·32       3·476
  {French                               1·04      3·819                1·28       3·845                 ·78       1·179
  {Italian                               ·36      6·186                 ·74       4·681                 ·52       1·320
  {New Italian                           ·1       1·988                2·4        1·601                 ·036       ·493
  {Popular Argentine                     ·04       ·695                 ·0004     1·188                 ·03        ·325
  {Province of Buenos Ayres              ·38      4·919                 ·18       4·514                 ·22       1·232
  {German Transatlantic                  ·28      2·464                 ·96       2·424                 ·32        ·693
  {Anglo-South-American                  ·16       ·730                 ·42       2·173                 ·04        ·308
  {British-South-American                ·3       2·939                 ·76       2·508                 ·6         ·748
  {German-South-American                 ·22       ·264                 ·24        ·563                 ·24        ·660
  {London and Brazilian                  ·12       ·739                 ·54        ·651                 ·08        ·211
  {London and Rio de la Plata           1·4      10·665                1·2        6·713                1·00       3·634

  {National Argentine                   1·06     20·601                 ·4       21·483                4·54       5·944
  {Spanish of the Rio de la Plata        ·44     11·077                 ·38      11·044                 ·38       3·687
  {French of the Rio de la Plata        1·18      4·013                1·02       4·919                 ·68        ·880
  {Italian of the Rio de la Plata        ·36      6·6                   ·8        4·699                 ·58       1·302
  {New Italian                           ·08      2·094                 ·16       1·874                 ·01        ·413
  {Popular Argentine                     ·016      ·809                 ·0002     1·443                 ·02        ·273
  {Province of Buenos Ayres              ·4      57·112                 ·12       5·788                 ·014      1·381
  {German Transatlantic                  ·236     3·053                 ·88        ·234                 ·366       ·906
  {Anglo-South-American                  ·14       ·607                 ·16       1·461                 ·08        ·255
  {British-South-American                ·18      3·247                 ·46       2·606                 ·52        ·739
  {German-South-American                 ·16       ·264                 ·28        ·756                 ·06        ·141
  {London and Brazilian                  ·12       ·713                 ·44        ·774                 ·14        ·255
  {London and Rio de la Plata           1·22     10·877                 ·98       7·119                1·9        3·669

[Footnote 89: The amounts here given are, of course, the actual, not the face values, of the notes.]

Again, the sales of money are now extended over a far longer period than
before, as the export season itself has been extended by new products,
such as maize, chilled and frozen meats, etc., which do not necessarily
find their outlet at the same time as the rest of the harvest. Thus the
banks have no longer any incentive to hoard reserves of money, as they
are no longer certain of selling them a few months later.

All these conditions here enumerated are of course subject to certain
small variations, according to the kind of trade or industry. The large
landowner, the grazier, the farmer, the cattle-breeder, who has no money
at his disposal but that coming from the sale of his products, can only
procure credit, no matter what his wealth may be in land, at a rate far
higher than that which is demanded of the large commercial houses of
Buenos Ayres. But as we have especially attempted to demonstrate, the
Argentine banks are to-day splendidly equipped with capital, so organised
as to assist commerce by services of many kinds, and, finally, their
charges have been abated, by the action of competition, to rates which
one would hardly expect to find in practice in a new country.[90]

[Footnote 90: The deposits in the Argentine banks at present amount to
nearly £80,000,000.]

As the latest sign of progress we may mention the establishment of the
Clearing-House, which commenced operations in 1893, upon the model of the
London Clearing-House, under the able management of the under-manager of
the Bank of London and the Rio de la Plata, Mr Hogg. This institution, as
its name indicates, serves to strike the balances of the sums which the
various banks may owe one another, the balances only being actually paid
over. The total sum represented by the operations of the Clearing-House
in 1908 was over £352,000,000. This figure includes the transactions of
the principal banks of Buenos Ayres, with the exception of the National
Bank, which does not make use of the Clearing-House.

Between 1893 and 1899 the business done at the Clearing-House underwent
a notable and continual increase, and in 1899 amounted to more than
£350,000,000. Since that time its operations temporarily decreased in
value, owing to the suppression of the gold premium, which put an end
to exchange speculations, which formerly kept the Clearing-House busy;
so that in 1903 and 1904 the total amount of the operations was barely
£264,000. Since 1904, however, these figures have gradually increased,
and in 1907 and 1908 they once more exceeded £350,000,000. To-day the
business is purely commercial, rendering any exact comparison with the
times when speculation played the principal part extremely difficult.
But if we could subtract this latter element we should certainly find
that the compensations based on commercial operations have greatly
increased, since the figures of 1899, although less by those representing
speculative transactions, have not appreciably diminished.

_The Bank of the Nation._——To complete this account of the banks of
Buenos Ayres and their operations, we must give an account of the working
of the most important of them all: the _Banco del Nacion_. This bank is
of especial interest, on account of its relations with the Argentine
Government, which guarantees all its liabilities.

The Bank of the Nation came to birth at an extremely critical moment in
the history of Argentine credit and finance. In 1890, after the double
political and financial crisis which was then affecting the country, as
a consequence of the errors and abuses committed by the Governments,
at a time when all the official credit establishments in the country
lay moribund, disorganised, and discredited, the Government of Signor
Pellegrini, called in to inherit the confusion of that which had just
fallen, found itself faced with terrific problems. It attempted to
solve the banking problem by founding a new institution, to which it
assigned a capital of 50,000,000 of piastres——£4,400,000——the shares
to be offered for public subscription. To the subscribers it promised
a certain intervention in the administration of the bank, at the same
time reserving to the State the right of appointing the president, just
as the French Government appoints the president of the Bank of France.
In order as far as possible to guarantee the shareholders and the public
against the errors and abuses which had formerly been so disastrous,
it established certain restrictive rules in the charter of the new

At another time there was much discussion as to whether the Government of
Signor Pellegrini, whose patriotic intentions no one doubted, would not
have done better to rescue the old _National Bank_, which was tottering
amid the ruins of the crisis, and whose assets, administered by the
new institution, might have given better results than did liquidation,
thus saving the State much expense; but this question is no longer of
immediate interest.

As was only to be feared, the public, after the spectacle of such
striking examples of the lamentable end to which official banks are
liable in countries formed by the chances of immigration, and devoid
of established traditions: wherein there exists no sanction for the
suppression of undoubted abuses: the public, we shall see, regarded the
new institution with mistrust, and abstained from buying shares. The
Government, disappointed in its attempt, was compelled to replace the
system of public subscription by an issue of notes, which explains why
a purely official bank was created, instead of the mixed bank which had
been proposed.

Realising that the success of a bank depends far more upon the confidence
with which it inspires the public than upon its organic charter, Signor
Pellegrini’s Government, together with those that followed it, took care
to place at the head of the _Banco del Nacion_ only men who were capable,
by their good judgment, their technical competence in banking business,
their social position, and their knowledge of the business world, of
giving prestige to the establishment, and surrounding it with the
atmosphere of respect and confidence which was necessary to its success.
Thus in spite of its official origin the bank was able to find support in
public opinion, and to render important services to industry and commerce.

A study of the accounts of this establishment, during the years
1904-1908, reveals a steady and prosperous progress, which has
incontestably placed the Bank of the Nation at the head of all similar

A glance at the following table will prove this. It contains the balances
of the three principal accounts, upon the 31st of December of the five
years from 1904 to 1908 inclusive.

  Year.      Bills in Hand.        Overdrafts in       Deposits.
                                 Current Accounts.
  1904         £8,486,326              £14,384        £12,561,969
  1905         11,842,611            2,589,167         15,501,340
  1906         13,364,585            1,907,818         15,163,974
  1907         16,502,621            2,731,314         18,008,501
  1908         19,049,798            2,897,008         20,713,375

We see from these figures that in five years the business done has
increased by more than 10-1/2 millions of pounds; the overdrafts in
current accounts by nearly £300,000 (in four years, 1905-1908), and the
deposits by more than £8,000,000.

The Bank of the Nation has one hundred and ten branch establishments
scattered all over the Argentine, and their number is continually
increasing. Here are the figures relating to the three principal accounts
in these branch establishments during the same period:——

  Year.      Bills in Hand.        Overdrafts on       Deposits.
                                 Current Accounts.
  1904         £5,111,481             £3,744          £5,187,982
  1905          6,987,847            349,427           6,842,559
  1906          8,557,900            570,350           7,707,001
  1907          9,848,713            860,899           8,433,003
  1908         11,196,690            744,119          10,210,650

We find here, among the branch establishments, an increase of over
£6,000,000 in the bills in hand; nearly £740,000 in the overdrafts on
current accounts; and over £5,000,000 on the deposits.

These exceedingly satisfactory results have been obtained by the National
Bank by means of a nominal capital of £9,680,000. We use the phrase
“nominal capital” with intention, for although this sum figures on
the balance-sheets of the bank, we must remember that in this capital
are included State bonds, which would have furnished, had they been
negotiated, an available sum of £3,212,000 in paper-money, and that the
net profits of the year 1908 are also included, amounting to £644,036 in
paper, which by law must go to increase the “Capital and Reserve Funds.”
The two accounts, after the deduction of the sums accruing to them as
profit, amount respectively to £9,697,946 in paper-money and £1,303,248
in gold. It follows from this that if the _Banco del Nacion_, instead of
being an official institution, were an ordinary bank, it would have been
able to pay its shareholders a dividend of 10 per cent. upon its paid-up

The data we have just given prove abundantly that the Bank of the Nation
has been directed by a hand as firm as it is prudent, and there is every
reason to suppose that it will continue in the future to serve public and
private interests as well as it does to-day. The forecast we predicted
in the first edition of this book will have proved mistaken; a forecast
based upon the authoritative opinion of an eminent Argentine statesman,
who affirmed that the official banks “bore within them the germs of the
moral and financial ruin of the country.” He even added that one should
never “incorporate a bank with the political administration of a State,
because sooner or later it will be used as a political weapon.”

We must here pay our respects to the memory of Dr Ramon Santamarina, a
former president of the Administrative Council of this establishment,
whose premature death was a great loss to the bank and to the country. It
is, indeed, to his intelligent and circumspect management of affairs that
we owe a great measure of the happy results obtained.

_The Bank of the Province of Buenos Ayres._——There is in the Argentine
another important financial house: the _Banco de la Provincia de
Buenos-Aires_, which has lately re-arisen from its ashes, by the aid of
the _Banco del Comercio Hispano-Americano_. This also was a victim of all
kinds of abuses, committed to its detriment, by the administrations which
successively directed it.

The bank was reorganised in June 1906, with a capital of £1,760,000,
of which sum half was furnished by the Government of the Province and
half by the shareholders, with the proviso that this capital might be
increased to £4,400,000, which was done at the end of 1908. According
to the business done by this bank from 1906 up to the present time, we
may predict for it a great future, provided that its presidents, learning
from the past, guard it resolutely from the influence of political
struggles and the demoralising factions from which it has suffered in
the past. The new establishment enjoys all the prerogatives, exemptions
and privileges which were accorded to the old bank; it is the obligatory
receptacle in which are deposited, gratuitously, the funds of the
provincial administrations and the courts.

The most delicate point in this conjunction, namely, the manner in
which the administration of the bank should be conducted, has been so
determined as to assure the preponderance of the private interests of the
shareholders of the bank over the official interests of the Government.
The administration of the bank is confided to a council, composed of a
president appointed by the Government of the Province of Buenos Ayres,
and twelve directors, four of whom are nominated by the Government and
eight by the private shareholders; an arrangement which constitutes an
excellent guarantee of proper management.

From the balance-sheets of the last three years, and the figures
contained in the reports of the directing board, or Council of
Administration, we may judge the activity displayed by this bank, and the
progress realised since its re-establishment.

Here, for example, are the amounts of the deposit accounts as taken upon
the 31st of December of each year, from 1906 to 1908 inclusive, as well
as the bills in hand and the overdrafts on current accounts.

                   Deposits.            Bills        Overdrafts on
  Year.       Paper.[91]     Gold.      in Hand.     Current Accounts.
  1906      £4,610,309    £179,431    £3,419,809        £467,342
  1907       4,920,561     396,108     3,953,903         565,670
  1908       5,716,441     409,690     4,785,044         477,310

[Footnote 91: Actual value in gold.]

The extensive business done by this bank, which is evident from the
preceding figures, has produced considerable profits, which amounted to
£109,298 in 1906; £220,551 in 1907; and £246,884 in 1908.

In the latter year the net profits reached an average of 14·02 per cent.
of the total capital. This flourishing state of affairs allowed of the
payment to the shareholders of a dividend of 9·5 per cent. in 1907 and 10
per cent. in 1908, without prejudice to the reserve funds, which amount
to £73,920.

_Money-lending or Mortgage Banks (Banques Hypothécaires)._ There are two
great official institutions of this kind in the Argentine: the _Mortgage
Bank National_ is progressing in a normal manner; the other, the
_Mortgage Bank of the Province of Buenos Ayres_, is painfully achieving
the process of liquidation.

We must explain that this institution, which worked for a number of years
with average regularity, collapsed violently in 1890, on account of the
scandalous abuses committed by the management in the matter of loans, and
the pernicious introduction of electoral politics into the conduct of
business. This is one of the most lamentable pages of the administrative
and financial history of the Argentine during the last few years.

After numerous efforts had been made at various times with a view to
making an arrangement between the bank and its creditors by means
of an exchange of its bonds of mortgage for new bonds of the _Rente
Provinciale_, a satisfactory agreement was at length arranged, which
put an end to the irregular situation of the bank, in a manner as
advantageous for the creditors as for the Province.

According to the report drawn up by the representative of the Government,
the liabilities of the bank amounted, on 30th June 1906, to £19,725,636;
and to set against this colossal debt the bank possessed the assets,
largely precarious, represented by 503 loans on mortgage, of which the
principal amounted to £1,967,704, while unpaid or overdue interest
accounted for £6,568,440; or a nominal total of £8,536,140.

The assets also comprised certain other items, amounting to a total of

Some of these assets had a real value and could be considered as capable
of realisation. Among these were: the money in the bank, the bank
premises, the mortgages, and the special accounts with the Provincial
Government; these items constituted the best class of assets. The
remaining assets were more precarious, and their investigation gave rise
to serious criticisms.

Two classes of assets, for example, which were apparently of considerable
importance——those relating to hypothecary credit and to personal
shares——were far from representing the value which was shown on the

Taking into account the probabilities of the realisation of certain
classes of assets, in case of need, a liability of £19,725,636 was
opposed by assets equivalent to £6,242,039, leaving a deficit of
£13,583,595. In other words, the assets represented only 31 per cent. of
the liabilities.

The Government’s representative, having analysed the effective revenue
at the disposal of the Province, and allowing for the probable progress
by which it might benefit in the immediate future, declared that the
Public Treasury could not put aside more than £308,000 for the purpose
of guaranteeing the dividends on the shares of the Bank; but that this
sum would probably be increased by £44,000 during the next five years,
and by £48,400 at the end of ten years; thus assuring the creditors of
an interest of 3-1/2 per cent., and a proportional amortisation of 1/2
per cent. An arrangement on this basis was proposed to the creditors of
the Bank at a general meeting, held at la Plata in November 1906, and was

We must add that at the present time the Provincial Government is
considering a scheme designed to infuse new life into the _Mortgage
Bank_. This system consists of founding a limited company in which both
public and private interests would be represented; a state of affairs
very like that already in existence, and yielding excellent results, in
the case of the Bank of the Province of Buenos Ayres.

The great official establishment for loans on mortgage in the Argentine
is the _Banco Hipotecario Nacional_. This bank grants loans upon real
estate in the capital, provinces, and national territories. It issues
cedulas which bear an interest of 5 to 6 per cent., with an amortisation
rate of 1 to 4 per cent., which are quoted at about par on the market, so
that the holder, after the deduction of expenses and commissions, obtains
a satisfactory interest. The value of cedulas in circulation at the end
of 1908 amounted to £11,871,108 in paper (actual value) and £1,876,530 in
gold, respectively.

In addition to these official establishments, there are various private
companies, founded by means of foreign capital, which issue loans on
real estate in the capital of the Republic and on land in some of the

According to our information, these companies employ a capital of nearly
£15,000,000, divided as follows:

  Argentine Railway Loan Co., Ltd.                    £827,600
  River Plate Trust Loan and Agency Co.              2,705,422
  Société de Crédit Foncier de Santa Fé                511,120
  Mortgage Co. of the River Plate                    1,997,717
  River Plate and Gal. Investment Trust Co.            504,000
  Dutch Mortgage Trust of the Rio de la. Plata         286,194
  Argentine Mortgage and Agricultural Co.               80,000
  The Standard                                         541,488
  Crédit Foncier Argentine                           3,016,340
  Compagnie Pastorale Belge Sud.-Americaine          1,350,102
  Société Hypothécaire Belge-Argentine               1,583,130
  Banque Hypothécaire Franco-Argentine               1,487,160
  Société Rurale de Bahia Blanca                         3,960

High as these figures are, however, they represent only a portion of the
foreign capital employed in this class of transactions, for considerable
sums are advanced by private persons who wish to obtain the high interest

These companies lend only gold, that they may escape the fluctuations of
the paper-money market, and usually limit their operations to dealing
with properties in the capital or in the Province of Buenos Ayres, doing
business with the rest of the country only in a very limited degree.
Although Argentine legislation is extremely advanced in the matter of
loans and mortgages, the lender fears, in the case of certain provinces,
to encounter difficulties in practice, or delays of legal procedure in
the case of foreclosing. The interest on mortgages, which during the year
1908 was maintained at about 9 per cent., is to-day showing a tendency to
fall, on account of the abundance of money in the Buenos Ayres market;
the rate is now as low as 8 per cent.

It is in the capital of the Argentine that mortgage operations are most
active. During the decade 1889-1908 the amount of loans upon property
reached the sum of £37,241,000. This amount was lent upon 40,996
properties; and of this total £7,603,000 was lent in 1908 alone. The
mortgages effected upon rural properties, throughout the entire Republic,
for the years 1903 to 1907 inclusive, amounted to £37,920,000, and the
mortgaged property amounted to nearly 80,000,000 acres. In this total the
Province of Buenos Ayres was represented by £16,880,000; that of Santa Fé
by £3,240,000; that of Córdoba by £6,240,000.

The Argentine Republic possesses one of the most perfect systems of
mortgage in existence among modern nations. To prove this statement
we need only explain that the Argentine laws do not recognise secret
mortgages; nor do they admit any privileges in favour of married women or
minors in respect of special mortgages. Neither does such a thing exist
as a general mortgage, nor are there any privileges taking precedence
over the right of the mortgagee.

The mortgage, like every action which affects or modifies the right of
the proprietor over immovable property, must be signed before a notary
and registered by the Conservator of Mortgages. Before drawing up the
deed, the notary must, as in the case of sales, demand a certificate
stating whether the property is or is not free from charges. Although the
right of the proprietor is perfect as to possession, the law tends to
give property a certain degree of mobility; thus for this reason the term
of a sale with power of redemption is three years, the term of a lease
ten years, and that of the registration of a mortgage ten years; but all
these terms may be renewed upon expiration. The term of ten years in the
case of mortgages does not affect the _Banco Hypotecario National_, nor
the _Banque Hypothécaire de Buenos Ayres_, nor the _Banque Hypothécaire
de la Capitale_, in virtue of the special laws which created these

_The Bourse or Exchange._——The first Commercial Exchange or Bourse, or
let us rather say the first institution to fulfil the functions of an
exchange or Bourse, for we cannot give that name to the market which
formerly existed in Buenos Ayres, was inaugurated in 1810 under the
name of the Chamber of Commerce——_Sala de Comercio_. It was composed
exclusively of members of the English colony, and offered them, besides
the usual advantages of such establishments, the attraction of a
well-furnished library.

The documents available do not tell us how long this institution lasted,
nor whether at a later period it opened its doors to the Argentine
element nor whether, being finally transformed, it served as a basis for
the organisation of the exchange as it is to-day. The only thing certain
is that in July 1834 the first members of the association met in the Via
San Martin, there to establish the Bourse, of which the inauguration took
place on the 1st of December following.

Before this date there was a financial group known as the “Sociedad
Particular de Corredores,” which was known as the _Camuati_, and which
busied itself with mercantile transactions.

The Bourse retained its original premises until the year 1862, when it
was installed in another building in the same street, at present occupied
by the Caisse de Conversion, or Bank of Exchange.

Some years later, the premises being too small, it was proposed to build
other and far larger premises, sufficient to meet the ever-increasing
demands of the institution. In 1881 an extraordinary general meeting was
held, with a view to forming a company to undertake the construction of
premises to house the “Sociedad Bolsa de Comercio.” But the company was
not formed until 1883, when it acquired the site on which the Bourse now
stands; and its official inauguration took place two years later.

Since then the Commercial Exchange has enjoyed a period of continued
prosperity; it is to-day the first commercial centre of Latin America.
It exercises a great influence over the commercial and economic life of
the Republic. It is the sole establishment of its kind, having judicial
powers, open to all mercantile transactions, and establishing, under
the stress of supply and demand, the prices of the products of labour
or commerce. Having the power of fixing the value of merchandise by
quotations of paper-money, it is, more than any other institution,
liable to exceed its functions; but it bears within itself, in its
admirable organisation, the means of repairing its own errors and of
remaining the faithful regulator of prices and values.

The most eloquent commentary upon the importance of the operations
effected by the _Bourse de Commerce_ is the simple enumeration of their
value at various periods, for we then realise the enormous development
which they have achieved in a period relatively short. In 1886 the
total of the business done was $173,000,000 paper, £34,600,000 face
value; in 1887 it was $254,000,000 (£50,800,000); in 1888 $432,000,000
(£86,400,000); in 1889 $469,000,000 (£93,800,000). The total value of
all business effected, liquidated or not, cash or credit, during the
years 1890 and 1891, amounted to $18,000,000,000 (£1,584,000,000) and
$7,000,000,000 (£616,000,000), respectively.[92]

[Footnote 92: The values before 1900 are face values, as the actual value
of the piastre note fluctuated. They must not be taken as actual values
any more than in the case of Indian rupees.——[TRANS.]]

These figures, in their simplicity, cover the history of an interesting
period of the financial life of the country. The wave of speculation
which turned all men’s heads began to rise as early as 1887, and in
1891 was at its greatest height; it then crumbled into foam, having
shattered the most deeply-rooted of banking houses, compromised the
national credit, changed brilliant illusions into melancholy realities,
and sown desolation and ruin in many a home. After the catastrophe
the total value of business done rapidly fell, and we see it falling
violently from one year to another——from the $18,000,000,000 of 1890
through the $3,376,000,000 of 1895, to the $835,000,000 of 1900; a year
which experienced a condition of affairs which was destined to produce a
beneficent influence upon the economic life of the country.

In this total of $835,000,000 of paper-money we find that transactions in
gold amounted to $774,000,000 paper money, corresponding to $66,800,000
of gold negotiated; while in 1899, the whole business done in the Bourse
still amounted to the respectable sum of $1,295,000,000 paper, of which
$1,234,000,000 represented operations in gold. From one year to another
the total sum of the business transacted in the Bourse had diminished by
$460,000,000 (paper).

The principal cause of this notable decrease was the “law of monetary

This law, which has been in force since 1890, fixed the value of 44
centavos, or $44 gold, for the future conversion of paper-money, and
enacted that the Caisse de Conversion should receive the gold and deliver
paper, and _vice versa_, at this same rate: a rate equivalent to 227·27
per cent. The effect of this reform was thus, if not to destroy, at least
very largely to limit unbridled speculation, which made itself especially
felt in the value of the paper piastre.

Speculation in gold being suppressed, the volume of business transacted
on the Bourse de Commerce of Buenos Ayres grew gradually less and less,
falling finally, in 1904, to $37,312,000 paper, of which $19,968 stood
for gold.

After 1904 the total sum of these operations was still further reduced,
the figures for 1908 being incredibly low. Thus the total, which in
1905 had attained £45,400,000, rose to £57,800,000 in 1906, fell in
1907 to £16,880,000, and in 1908 to £12,560,000. To-day the activity of
speculators is concentrated upon operations in mortgage bonds and the
shares of various companies; each class of operations amounting to some
£5,000,000. These figures show that the Bourse de Commerce loses from day
to day some part of its importance as the regulating centre of mercantile
transactions; but it would be an error to measure the economic vitality
of the Republic by the amount of business effected on the Bourse, since
an examination of the situation shows us that the Argentine has never
known a period of more obvious prosperity.

       *       *       *       *       *

Having explained the new phase upon which the Buenos Ayres Bourse has
entered, we must now consider its organisation and its usages, and the
regulations under which it operates.

In the first place we must remark that the Bourse is not an official
institution, but a private establishment, founded and supported by a
limited liability company, the “Bolso de Comercio,” which is recognised
as a judicial body.

In contrast to other Exchanges, and that of New York in particular,
the number of shareholders is unlimited, and varies from time to time.
In 1886 there were 2959; in 1891, 4901; in May 1905, 3709. To become a
member of the Bourse one must be presented by two shareholders, admitted
by the Council Chamber or Committee (_Chambre Syndicate_), and must pay a
moderate entrance fee, as well as an annual subscription.

According to its rules, the object of the Bourse de Commerce is to
“offer a place of meeting to these members, where they may discuss and
effect all manner of lawful business; and to facilitate and negotiate
all commercial operations by giving them security and legality.” It also
undertakes to represent commerce and production in general before the
authorities of the country, or before private undertakings; it supports
petitions relative to their interests, in order that laws about to be
proposed, or those which are being adopted, shall be equitable and shall
favour the development of commercial transactions. Its object is both to
ensure the unity of commercial usages, and in case of need to take the
initiative in all questions of economics which may affect commerce in

The management of the Bourse is effected by the Council Chamber——the
_Chambre Syndical de la Bourse_, which is entrusted with the general and
official representation of the institution. It is this authority which
permits or refuses the official quotation of all stocks, shares, loans,
etc., issued according to the laws of the country of their origin and by
legally constituted bodies.

The functions of the stockbroker can only be fulfilled by persons
previously authorised by the Council Chamber, after they have
accomplished certain formalities, and have proved whether they have
attained their legal majority, have experience of business, and have
enjoyed a good reputation, all of which must be guaranteed by three men
of business of known responsibility. The number of such brokers is not
limited, and may be increased or decreased according to circumstances. In
1905, for instance, their number was 385. They are not obliged to give
security nor to make any deposit as guarantee before practising; they
have merely to pay a small monthly subscription.

The regulations of the Bourse contain severe provisions against brokers
who infringe any of the numerous prohibitions affecting them; such as
accepting orders from clients whose identity has not been proved; from
persons known to be insolvent, or from incapable persons; or acting as
intermediary in negotiations where there is reason to suspect that the
parties involved are not proceeding seriously. Brokers who infringe these
rules or others——who do not, for example, meet their engagements——are
suspended by the Council Chamber of the Exchange.

All operations must be declared in an audible voice by the stockbroker
to the recorder (annotator), in order that the latter may inscribe
them upon the blackboard. The vendor and the buyer must then exchange
memoranda, in order that the transaction shall be definitely confirmed
and made valid. All transactions effected on exchange[93] during official
hours are copied, with the prices, from the blackboard into the Journal
of Sales; these latter being also published in the _Boletin de la Bolsa
de Comercio_; or, as we should say, the Stock Exchange Bulletin. The
settlement of all transactions concluded is effected through the Council
Chamber, with the aid of the _Bureau de Liquidation_, or Settlement
Office, under the supervision of an official liquidator, appointed
at a general meeting of the brokers, who charges a percentage on the
settlements which he effects.[94]

[Footnote 93: Literally, “at the basket.”——[TRANS.]]

[Footnote 94: The brokerage in 1/4 per cent. on the sale or purchase of
bonds, shares, debentures, etc., and is charged on the face (or nominal)
value of the amount changing hands. A charge of 1/2 per cent. is also
made on all operations on Exchange.]

Such are the principal rules of the organic charter which regulates the
operations of the Stock Exchange of Buenos Ayres, and such is its method
of operation. Let us now examine the total amount of its operations
during the period 1895-1908, and how they may be analysed:——

  Year.               Piastres (Paper).  Pounds (Sterling).
  1895                  1,244,602,058            ——
  1896                  1,383,472,329            ——
  1897                  1,306,531,655            ——
  1898                  1,219,304,846            ——
                        -------------     ---------------
        Carry forward,  5,153,910,888

  Year.                   Piastres (Paper).        Pounds (Sterling).
        Brought forward,    5,153,910,888
  1899                      1,295,304,846                 ——
  1900                        834,982,214               £73,478,434[95]
  1901                      1,003,709,984                88,326,476
  1902                        841,627,532                74,063,222
  1903                        383,905,622                33,783,694
  1904                        423,957,361                37,308,227
  1905                        515,607,316                45,373,454
  1906                        655,624,566                57,694,961
  1907                        192,130,565                16,907,489
  1908                        143,466,502                12,625,052
                             ------------               -----------
  Total for 14 years      $11,444,377,390   (9 Years), £439,561,009
                          ===============              ============

[Footnote 95: These values are given only from 1900, when the value of
the piastre was fixed.]

Of this total an amount of 8724 millions of piastres, or 76·2 per cent.,
applies to metallic operations, which kept speculation alive until the
monetary law of 1899 once and for all arrested the varying values of
paper money. If this law had had no other effect, this result alone would
have justified it as wholly beneficial to the interests of the nation.

In the quotations of the above period mortgage bonds hold the second
place; they represent about 5 per cent.

Being dominated by the spirit of speculation, which expended itself
principally, indeed almost exclusively, upon monetary transactions, the
Bourse had no time to devote itself to more legitimate business. Thus
the public funds represented only some 3 per cent. of this total; then
came shares and debentures of various companies; and last of all banking
shares, the amount of these being insignificant.

The nominal value of all the securities which were quoted on the Buenos
Ayres Bourse in 1907 amounted to $554,791,932 paper and $127,763,525
gold, or an actual total of £74,374,395, and an analysis gives the
following results:——

                                Dollars (Paper).  Dollars (Gold).

  Public funds and stocks         157,025,295       35,000,000
  National Mortgage Cedulas       129,383,100       11,443,600
  Provincial Mortgage Cedulas     129,745,642           ——
  Limited Companies: shares       136,657,520       78,416,320
  Debentures and certificates       1,980,375        2,903,605
                                 ------------     ------------
  Totals                         $554,791,932     $127,763,525
                                 ============     ============

These two totals together are equal to a sum of £74,374,395.

In the first edition of this book we gave a summary of the nominal value
of all the stocks quoted on the Buenos Ayres Stock Exchange in 1904; the
sum amounted to 462 millions paper and 38 millions gold, or a total of
£52,256,000; so that in three years these figures had increased by 93
millions paper and 70 millions gold, or over £22,000,000.

It is permissible to hope that in the course of time the Buenos Ayres
Exchange will attain a far greater development, and that it will even
exercise some steadying influence on the prices of the public funds.
To-day their real market is in London, Paris, or Berlin, so that the
credit of the country is affected by the disturbing events of European
markets, while the Buenos Ayres market is devoid of any compensating

However, it may be observed that when a country begins to grow rich and
to have more assets at its disposal, the public funds placed abroad show
a tendency towards repatriation. We have seen this in the case of Italy
and Austria, which had an important foreign debt in France, and have
considerably reduced it during these last ten years of economic progress.

It will certainly be the same in the case of the Argentine when, thanks
to a series of good harvests, its available or fluid assets have
increased beyond what is absolutely necessary for the development of
agriculture. Investments will be made not only in land or in live stock,
but money will be invested in stocks and shares as well, and notably in
the Government stock of the country.

As a symptom of this tendency, we may mention that interest on the
foreign debt, the coupons for which have hitherto been payable abroad
only, is now payable in the Argentine as well, in order to facilitate
the purchase of this stock in the Republic as a staple investment. The
internal debt is also the object of more extensive operations, now that
the seventeen loans which constituted the old debt have been unified,
and now that a special call is to be made upon the internal credit of
the county with a view to undertaking vast public works. To enlarge the
market for this Government stock the authorities have just decided that
its coupons shall be payable on the principal foreign markets.

Finally, in the course of time the market for industrial stock, bank
stock, and railway shares will gradually become less restricted, in
proportion as the public fortune becomes more extensively subdivided,
instead of being concentrated, as it is at present, in a comparatively
small number of hands. The only thing that may compromise this future is
the excessive speculation which we find, unhappily only too often, in
a country where gambling is a dominant instinct. This excess, with its
natural sequelæ in the form of financial crises, might end by driving all
serious clients from the Bourse, and in destroying the excellent elements
which Buenos Ayres possesses for the creation of an important financial

_Limited Companies._——In the vast progressive movement which increases
in force yearly throughout the Argentine Republic, the Bourse of Buenos
Ayres has yet another part to play: that is, to facilitate the formation
of collectivities of capital under the form of joint-stock companies,
since the spirit of enterprise exhibits itself by preference under this
form. Collective effort is to-day more and more replacing individual
effort; the Argentine must therefore learn how to employ this weapon
of associated capital in order to promote new undertakings, and, by
popularising movable values or securities by the help of the Bourse, to
raise up new resources to the country’s profit.

Our study of the chief manifestations of Argentine life and its
commercial machinery would thus be incomplete if we did not give some
account of the public companies of the Argentine, the legal formalities
demanded of them upon their formation, their mechanism, and the
vicissitudes through which they have passed at various interesting
periods of Argentine history.

The constitution of public companies is subjected by the Commercial Code
to rigid formalities, in accordance with the most advanced principles of
universal legislation upon such matters, in order to assure their proper
operation as well as the interests of the shareholders.

The indispensable conditions of the formation of such companies are
the following: the number of associates must not be more than ten; the
capital of the venture, or its first issue, must not be less than 20 per
cent. of the total, and must be entirely paid up; the shareholders must
contribute 10 per cent. of the capital actually subscribed, a sum which
must be deposited in an official or private bank; the company must be
constituted for a fixed term, and must be authorised by the Government,
which cannot refuse its authorisation if the functions, organisation,
and articles of the company are in conformity with the code, and if its
object is not contrary to the public interests.

To gain the right to publish the prospectus appealing to possible
shareholders, the company must also conform to the following rules: it
must indicate the date of the provisional formation of the company,
must mention the place where the charter of the company was drawn up
and registered, and what journals have published the articles and the
Governmental authorisation; it must give details of the object of the
company, its capital, the number of shares, and the conditions of
subscription and payment; it must explain the exceptional advantages
claimed by the founders of the company, and convoke the subscribers to a
general meeting, which must take place within three months, at which the
company shall be definitively constituted.

The law formally forbids the founders of limited companies to reserve
any sum or advantage whatever, in the form of shares, debentures, or
founders’ shares, in exchange for concessions gratuitously granted by the
Government. It concedes them a maximum of 10 per cent. of the capital, or
10 per cent. of the realised and liquid profits during a term which must
not exceed ten years.

The founders or administrators of any company are responsible, jointly
and severally and without any limit, for all that has been done in the
name of the company up to the time of its definitive constitution,
without appeal against the latter, if it take place.

If the company be finally constituted, the expenses and the consequences
of all proceedings undertaken to that end by the founders will be charged
against the exclusive account of these latter, nor will they have any
resort or recourse to appeal against the subscribers.

In the case of limited companies which are not legally constituted,
the founders, administrators and representatives are, conjointly and
severally and without limit, required to restore any sums they may have
received for shares issued, and also to pay the debts of administration
and the losses that may be incurred by third parties by the failure to
fulfil obligations contracted in the name of the company.

Once a limited company is constituted, its administrators contract no
common or personal responsibility for the engagements of the company, but
they are responsible, personally and conjointly, to the company and to
third parties, for the failure of execution or the improper employment
of their mandate, and also for the violation of laws, regulations, and

All companies are obliged to appoint at least once a year a censor chosen
by the general meeting, who directly represents the shareholders, and who
supervises the proper conduct of the company, and the accomplishment of
the legal formalities which concern it.

The Commercial Code contains many other enactments which tend to ensure
the correct and legal constitution, as well as the proper conduct, of
limited companies: but those we have cited will suffice to show that the
law-maker has striven to use the utmost foresight, with the object of
guaranteeing the interests and the capital confided to such companies.

Despite this prudence and foresight, we are forced to recognise that the
institution of such companies, which constitutes a powerful economic
lever when they are correctly administered and established with a view to
commercial and industrial utility, is at present discredited on account
of the abuses committed in its name at the time of the great crisis of

The institution of limited companies is so intimately connected with
the financial disasters of that period that its history is to a
certain extent the history of speculation, and it has suffered all the
vicissitudes of speculation.

In 1882, when Buenos Ayres was federalised and became the permanent
capital of the Republic; when public tranquillity was confirmed, with
the conviction that it would be long before it was disturbed; when the
public expenditure was increased, thanks to the employment of credit and
the issue of paper currency; when, in short, the prospect of universal
prosperity had awakened energy and initiative; there began to pass
through the country a light breeze of speculation, which was soon to
become a tempest; and the limited company, which until that time had
existed in a modest, inconspicuous degree, quickly assumed a greater
importance, with a more definite, more concrete form.

The companies floated in 1882 and in the three following years were not
very numerous, and their capital was insignificant as compared with
the capital of those that followed: yet a very marked impulse towards
progress was already perceptible, as much in numbers as in capital.
Thus the sum of 10 million piastres, the amount of the nominal capital
declared by the limited companies in 1882, rose to nearly 13 millions in

But as the fever of speculation and affairs grew higher and ever higher,
thanks to the aid of the credit too liberally granted by the banks,
whether mortgage or money-lending banks or otherwise, and as at the same
time all the paper thrown upon the market was immediately absorbed, to
the great profit of those who issued it, the limited company followed
the upward march, although this movement did not always correspond with
the idea of progress. Thus we see with surprise that from 13 millions
of piastres (paper) in 1885, the capital of the companies rises to 34
millions in 1886, to 95 millions in 1887, to 196 millions in 1888, and in
1889 to 378 millions; and in these two latter years the fever has reached
the period of greatest danger.

In 1890 the economic-financial crisis, long delayed by artificial means,
burst over the country with terrible force, and a revolution broke out
simultaneously. Under the weight of this double disaster the banking
houses tottered on their foundations, soon to fall in ruin; credit,
personal or secured, vanished absolutely; the paper currency, already
depreciated, fell to a still lower value; industry and commerce were
arrested in their progress, and the whirligig of speculation, which had
so far gone merrily but giddily round, came to an abrupt standstill. As
a natural reaction, the formation of companies, which speculation had
stimulated to excess, was stricken with an almost complete paralysis; so
that we see the capital of these companies, which in 1889 had risen to
378 millions of piastres, fall in 1890 to 190 millions, and finally, in
1891, to the modest sum of 13 millions.

These, rapidly denoted, are the salient lines of a sketch of the
vicissitudes of speculation and the affairs of the capital during the
last ten years; a picture which begins with the rosy tints of hope and
illusion, and ends in the sombre colours of bankruptcy and ruin.

The branches of trade and industry which are most largely represented by
the limited company form another question of interest. It is certainly
very difficult to discover the true social idea which these companies
pursue at flotation, for behind pompous titles which seem to express
a true national progress, such as the construction of harbours, the
foundation of colonies, the building or management of railways or
tramways, the opening up of new districts by means of canals, etc., there
lurks, only too often, a mere scheme of speculation in shares or land.
Judging, however, by the actual operations effected by these companies
during the course of their existence, we can class them according to the
object declared at the time of flotation, and at the same time give the
statistics of their capital.

The capital of all the companies floated since 1882 amounts to 950
millions of piastres (paper), or £83,600,000. Of this sum £14,320,000 was
frankly intended to promote speculation in land; £13,200,000 was applied
to railways (including the purchase of the railways of the Province of
Buenos Ayres); £12,144,000 to insurance (a form of employing capital much
in vogue at the time), and £12,056,000 to banking affairs, which in some
cases were only the mask of speculations in stock and in land.

To make our sketch complete we ought to give, instead of the nominal
capital declared by these companies, the capital actually paid up;
as we know that it is not every company that has at its disposal the
sum mentioned in its articles, but that many have to be content with
the payment of one or two instalments, while others cannot even find
subscribers. Knowing these data, and being cognisant of the present
condition of the companies, we should then be able to estimate the
amount of loss which they have inflicted upon the country.

Unfortunately this investigation is impossible, for lack of information,
and we can only state that millions of pounds of private fortunes were
lost or stolen in the limited companies of the period.

After the crisis of 1890 there was, as there was bound to be, a great
mental reaction; especially in matters relating to the institution of the
limited company; and the latter was so discredited that for several years
not a penny could be obtained for investment in undertakings of the kind.

But it was not possible that such an important element of economic
progress should be entirely suppressed on account of the abuses committed
in its name. Very slowly it came into favour once more; but thanks to the
lessons of experience the new companies were concerned in the foundation
of undertakings of genuine industrial and commercial value. Thus the
companies floated in 1902, 1903, and 1904 represented a nominal capital
of $803,979,000 paper (£70,950,352 actual value), and those founded from
1905 to 1908 (inclusive) had a nominal capital of £72,573,445, which may
be analysed as follows:——

  Land                                  £1,676,959
  Railways                               6,059,791·7
  Insurance                             13,593,981·5
  Banks                                  9,251,958·1
  Industry                               7,295,793·2
  Commerce                               6,856,762·3
  Agriculture and stock-raising          7,218,579·7
  Navigation                               440,000·0
  Colonisation and Immigration             203,996·3
  Tramways                               5,113,303·1
  Hygiene                                  564,759·5
  Telephones and telegraphs              1,349,983·8
  Mines                                  7,332,286
  Mortgage Companies and Real Estate
  Companies                              4,098,448·1
  Gas and electric lighting                759,249
  Savings Banks                            667,598·8
  Total                                £72,573,450

The mere list of the above investments is enough to convince us that
the day of merely speculative companies is over, when shares were mere
travesties, more or less justified, as in the years which preceded the
crisis of 1890. Now speculation in land is represented by a sum of less
than £1,700,000; while insurance is represented by over 13 millions,
banks by more than 9 millions, industry by 7 millions, agriculture by 7
millions, and mines by about the same amount. These latter investments
belong to the category of “eruptive” stock, for, like a volcanic
eruption, they rise suddenly to great heights, to fall, a little later,
leaving nothing but smoke and ashes.

In the matter of company formation, as in the matter of operations of
the Bourse, we see that the Argentine has re-entered the normal path of
progress. Under these two manifestations, which reflect the economic
activity of the country, the tide of affairs continues to increase, but
the spirit of speculation no longer turns it aside, no longer undermines
the organisation of the nation’s commerce.

                                PART IV

                           ARGENTINE FINANCE

                               CHAPTER I

                          THE ARGENTINE BUDGET

The financial situation——Continual increase of national
    expenditure——Great and rapid progress since 1891——Insufficiency
    of the means adopted to moderate this increase——The Budget
    Extraordinary and the Special Legislation Budget.

Causes of this increase of national expenditure——The increase of
    administrative requirements caused by an increasing population;
    this is the most natural cause, and that most easily justified——
    Increase of the public debt——The intervention of the State as
    the promoter or guarantor of important public undertakings——
    Exaggerated military expenses.

The total sum of national, provincial, and municipal expenses.
    The proportion per inhabitant——Comparison with other foreign
    countries in the matter of administrative expenses.

The national revenue——The revenue as organised by the Constitution,
    and its analysis——Indirect taxation——The customs the chief
    source of revenue——Direct taxation; its origin in the
    Argentine; its justification; its yield——Revenue of the
    industrial undertakings belonging to the State: railways,
    sewers, posts and telegraphs——The exploitation of the State

Elasticity of the receipts, which follow the development and
    progress of the country——The accelerated increase of
    expenditure, and the resulting chronic deficit——Necessity of
    serious reforms.

The phenomenon of an increase in the national expenditure: a phenomenon
which makes itself felt under monarchies as well as under republics, in
those countries which have long centuries of life behind them, as in
those whose independent existence has barely begun: this phenomenon is
felt in the Argentine Republic more keenly than in the older nations of
Europe. Our book would present a serious lacuna if we did not, before
speaking of the increase of the Argentine budgets, inquire first of all,
as closely as we can in a work of information, what are the causes which
have led to this continual increase in the national expenses. We must
know, in short, whether this increase is due to general causes, produced
by administrative necessities, and connected with the mere progress of
the country, or whether on the contrary it arises from special factors,
peculiar to the social and political conditions of the country, and to
the practical defects of its Government. If we examine the amounts of
the Argentine budgets for a number of years, we shall see that, with a
few rare exceptions, they have always increased, and at a more or less
extraordinary rate. Even in the years when the country was groaning under
some profound economic or financial crisis the same thing was to be

Not to go back too far in our retrospective study, let us take as a
point of departure the year 1891, which year is a veritable landmark in
the history of the Argentine people, since it was in that year that the
political and financial crisis which broke over the country attained its
greatest intensity. We find that in 1891 the expenditure authorised by
the national budget——not the expenditure actually effected, with which
we shall deal further on——amounted to $41,230,349 paper and $20,315,446
gold, or some 31 millions in gold, or £6,200,000.

Five years later——in 1895——this expenditure had increased to $76,000,000
paper and $15,000,000 gold, or $37,000,000 in gold, or £7,400,000. Since
then, with rare exceptions, the budgets have followed an ascending scale.
If, indeed, we concern ourselves with the sums actually realised, instead
of those proposed by the budgets, we find that the amounts of the later
budgets are these: in 1898, $75,000,000 gold and $119,000,000 paper,
or $121,000,000 in gold, or £24,200,000; in 1899, $31,000,000 gold and
$104,000,000 paper, or $77,000,000 in gold, or £15,400,000; in 1900,
$24,000,000 gold and $105,000,000 paper, or $69,000,000 in gold, or
£13,800,000. Reducing to gold the sums estimated in paper, we find that
since 1901, that is, since the time when the value of the currency was
established on a fixed basis, the following sums have been expended: in
1901, £14,200,000; in 1902, £17,600,000; in 1903, £15,600,000; in 1904,
£17,200,000; in 1907, £20,200,000; in 1908, £20,200,000; there has thus
been a rapid progress.

The budget for 1909 amounts to $270,000,000 paper, or £23,812,800. In
this total are comprised two items: one of 15 millions of piastres in
paper, value £1,320,000; the other of 3 millions, or £264,000, which are
set aside to meet the expenses of the _fêtes_ of the first Centenary
of the National Revolution. If we subtract these two items, which are
necessitated by extraordinary expenses, we find that the increase of the
administrative expenditure over that of 1908 amounts to £1,760,000.

We ought here to remark that these figures do not include the sums
realised by the Government by means of the issue of stock: a procedure
which constitutes an interesting chapter of Argentine finance.

We see, from these data, that the increase of the national expenditure is
a constant, almost an inevitable factor, which occurs year by year in the
Argentine administration. It now remains for us to inquire if unavoidable
causes exist which force the State to spend without reflection, and,
when funds are lacking, to contract loans which grievously burden the
future; or whether, on the contrary, we have here a fault rooted in the
soil of new countries which have no serious administrative traditions,
and in which the spirit of order and economy has not yet grown to the
stature of a national virtue. In the Argentine Republic the increase
of public expenditure responds to causes which differ from those which
are active in the countries of Europe; though we do not say that the
latter do not also exercise their influence. A new country, inhabited
by a sparsely-settled population, in possession of a rich but desert
territory, its economic organism as yet barely developed, the Argentine
has not yet produced a class of men practised in and prepared for
practical administration. It is, on the contrary, afflicted with
undisciplined political parties, full of impatience and of ideas of
progress which cannot be immediately realised. It is not surprising that
in the Argentine the increase of public expenditure responds to causes
unlike those to be observed in other States, which number the years of
their lives in centuries; which enjoy perfected administrations, possess
a large class of men prepared for the science of government and finance,
and whose needs, far from increasing, tend to restrain such expenditure.

So, considering the question under its most general aspect, we believe
we shall not depart very far from the truth if we suggest, as the
causes which produce the constant increase of the Argentine budgets,
the following facts: (1) the increase of administrative requirements,
caused by the increase of the population; (2) the increase of the public
debt; (3) the depreciation of the currency until a recent period, and the
increasing dearness of the necessities of life; (4) national and foreign
wars (which causes now belong to history, and have happily ceased to
exercise their influence in the Argentine); (5) the intervention of the
State as manager or promoter of expensive public works; (6) the cost of
an imperfect and expensive administrative machinery, and the wastefulness
of the Government and of Congress; (7) a lack of control in the handling
of revenue and expenditure; (8) increased military expenditure. Under
this last heading we may include the heavy expenses which the Government
has been forced to meet in order to maintain the integrity of its
frontier and to avoid a war with Chili. Between 1889 and 1903 it has
employed for this purpose a sum of £13,000,000.

A brief examination of each of these causes will suffice to show that
they have been truly presented, and will also demonstrate the degree in
which the phenomenon we are studying exhibits itself.

The influence of the first factor is assured and indisputable; it is
enough to enounce it; it will be admitted without further criticism.
The increase of the Argentine population, although it is not precisely
all that might be desired, because it is not equally distributed, being
larger on the coast than in the interior, is none the less considerable.
The first national census of 1869 gave a population of 1,877,000 for the
whole country; that of 1895 gave 4 millions; an increase of more than
2,100,000, or of 4·8 per cent. per annum.

Since 1895, although the Constitution orders a ten-yearly census, no
census has actually been taken. But according to the most reliable
calculations, the population of the Argentine amounts at present to more
than 6 millions of inhabitants.

It is obvious that an increased population must also mean an increased
administrative expenditure, as more telegraphs are needed, more bridges,
roads, and railways, a larger police service, more lawyers and judges,
and more schools and teachers. No sensible person would pretend that
the national expenditure could remain unchanged, while all else was
developing and prospering. If the national revenue increases at an
extraordinary rate, on account of the development of the population, it
is only logical that the expenditure should increase likewise; but in a
less proportion, it is true, as is proper under a good administration.

But this is not to say that it is permissible for administrators
entrusted with the annual duty of presenting an estimate of public
expenditure to do what is occasionally done, with such deplorable
results——to estimate also in an exaggerated fashion the increase of the
population, in order all the more to inflate the budget. The profound
financial crisis, which affected the country in 1890, had no other cause.
Everything is risked by the abuses of official expenditure. We have the
proof of this in the fact that the economic possibilities of the country
have never been so great as in these moments of financial crisis.

The continual increase of the public debt is another of the causes of
exaggerated budgets. Since the first loan of £1,000,000, contracted by
the Province of Buenos Ayres in 1822, which was later transferred to the
account of the nation, until the present time, when, if no new loans
have been contracted, at least the Government has put into circulation
millions of stock which it was holding in reserve, the public debt has
done nothing but increase, and in considerable proportions, attaining
in 1909 to an amount of $371,000,000 gold and $237,000,000 paper,
or £95,000,000 in all; and this, without including the last loan of
£10,000,000 contracted by the Government in March 1909.

Another permanent cause of the increase of public expenditure is that
which arises from the intervention of the State, as guarantor or promoter
of costly public works.

The Argentine Constitution has very wisely instructed Congress to
“promote the introduction and the establishment of various industries and
of immigration; the construction of railways and navigable waterways; the
colonisation of the lands belonging to the nation, and the importation of
foreign capital and the exploitation of the rivers of the interior, by
means of protective laws, temporary concessions, privileges, and awards,
which shall be an incentive to emulation.”

In these sentences the writers were inspired only by the embryonic
condition of the country for which they legislated. In the
old-established European nations, where great accumulations of capital
exist, where everything is done by personal initiative, where the
commercial and industrial spirit is highly developed, many of the
prescriptions of the Argentine Constitution would be useless or out of
date. But here, where capital is only beginning to exist, as a result of
the large commercial balance left over from each year of international
trade; here where, to use the phrase of an Argentine thinker, “we
are naturally rich but economically poor,” the State has to turn to
all trades; it has to go into business as contractor, encourage the
establishment of industries by means of premiums or bounties, and
stimulate the introduction of capital and of immigrants.

The last of the causes we have cited as determining the increase of
public expenditure in the Argentine, is the increase of military
expenses. We do not here refer to the extraordinary expenses which the
Government had to support for a number of years, in order to acquire the
elements of naval and territorial defence wherewith to meet the possible
aggressions of a neighbouring State, but the ordinary annual expenses for
the upkeep of the army and the navy.

Up to 1902 these expenses followed a scale of accelerated increase,
and the country met them as a necessary sacrifice, dominated by the
conviction that by this means it could evade the greater calamities of a
war; and quieted at the same time by the promises which were given that
once the danger had passed the expenses would naturally decrease.

Unhappily it was not so. Although the international horizon was clear
of the cloud which had threatened to disturb the tranquillity of the
country, the army and navy estimates showed no signs of abatement; on
the contrary, they showed a tendency to increase. Thus in 1902, when
the international question was in an acute stage, and a rupture was
momentarily expected, these estimates amounted to £2,816,000.

Now, in 1909, with peace and tranquillity reigning on all sides,
the war-budget still amounts to £1,980,000, and the naval budget to
£1,452,000; or to more than £3,400,000 in all. We repeat that these are
ordinary, not extraordinary budgets, whose amount is always considerable,
and which have to be met by means of sums raised by special financial
laws, or authorised by simple resolutions of the Cabinet or Council of

To these military expenses we must add the sums required to pay the
retiring gratuities of officers, and these already amount to a veritable
army. These gratuities, granted under the provisions of an irrational
law, have contributed to deprive the army of a large number of soldiers
who might still be serving with honour and distinction.

But large as these expenses are, they are altogether eclipsed by the
exorbitant sum of £14,920,000 voted by Congress in 1908, which, divided
into eight annuities, is destined for the purchase of munitions of war,
ships, etc.

The Argentine, by consenting to such expenses, which are as excessive as
they are unjustified, is thus deliberately entering upon the policy of
armed peace, which has produced such lamentable results among the nations
of Europe.

       *       *       *       *       *

The figures we have already given, which relate to the National Budget,
represent a portion only of the expenses which weigh upon the inhabitants
of the country; for they do not include those amounts requisite for the
support of the provincial and municipal administrations of the entire
Republic. The amount of all the budgets together——national, provincial
and municipal——amounted, in 1908, to £29,200,000.

Each one of the six-million inhabitants of the Argentine must thus
annually contribute nearly £5 towards the support of the public
administrations. But in reality this contribution is still heavier,
as the expenses which figure in the budget are only a part of the
administrative expenses, and we must still add the expenditure authorised
by special laws or resolutions of the Cabinet.

This proportion of £5 per inhabitant is enormous; to understand how
large it is, we must compare it with the amounts charged in other and
more advanced countries. On the other hand it is stated that some 30
per cent. of the whole national expenditure is absorbed by the salaries
of the administrative employés, functionaries, ministers, etc., and by
pensions and retiring gratuities.

Commenting upon this abnormal situation, a sometime Minister of Finance
remarked some years ago, in an official document which attracted
attention by the energy and sincerity with which it was written:——

“Our budgets have constantly increased of late years. It is notorious
that the personnel of the Administration is excessive, just as it is
notorious that useless and expensive sinecures have been created, with
the sole object of giving places to persons whose influence has been
such that the State has undertaken to support them. Bureaucracy is
increasing; industry, commerce, and all the spheres of free endeavour and
of individual effort are abandoned by the sons of the country, who seek
salaried employment or the exercise of intermediary professions which
demand no effort. The number of young men who waste their time in seeking
a place, instead of devoting their activities to work, in a country
which offers wealth to all who will employ a little energy, a little
perseverance, is surprising. But all want an easy life, even though it be
poor and without horizon; all wish to live on the budget, and in order to
gain their object they exhibit all kinds of ingenuity; they go seeking
recommendations, and employ every means at their disposal.

“This host of pertinacious beggars of place results in the creation of
new employments and new services, all equally useless. The national
and provincial administrations pay more than $65,000,000 in salaries
and pensions. Each inhabitant contributes six golden dollars——£1,
4s.——towards the upkeep of an army of employés, which is an enormous
sum. The public services of other countries cost, per inhabitant: in
Switzerland, 4s. 9·6d.; in the United States, 6s. 4·8d.; in England,
8s. 2·88d.; in Holland, 9s.; in Austria, 11s. 2·88d.; in Belgium,
12s. 0·48d.; in Germany, 12s. 0·96d.; in Italy, 15s. 9·6d.; and in
France 19s. 2·88d. These figures, taken from Paul Deschanel’s work on
Decentralisation, show us that we have outstripped all other nations in
the matter of expenditure on the administration; even France and Italy,
where bureaucracy is regarded as a calamity and as one of the causes of
their economic decadence.

“We must check this avalanche by suppressing all useless employments and
all superfluous services. It is essential to turn our young men aside
from their present path, in order that necessity shall force them to
exercise their energies in the vast field which is offered them by a
new country, full of natural wealth, with a fertile soil and a benign

[Footnote 96: See _Mémoires des Finances de 1889_, by J. M. Rosa, Vol.
II., p. 174.]

The reaction which Señor Rosa, in his genuine patriotism, had hoped for,
took place a little after his departure from the Ministry of Finance; but
unhappily its direction was the reverse of that he anticipated.

We have examined the expenses of the public administrations; we have
measured the weight of the public debt; we must now examine the treasury
receipts, in order to discover what are the most important sources of the
revenues which fill it, and what elasticity they possess.

The Argentine Constituents, after having explained, in the sententious
preamble which serves as a preface to their great political code, what
place was theirs who were building the great edifice of the State, turned
to consider from what sources the revenues for the Treasury might be
drawn, in order to satisfy the necessities of the administration of the

To this effect they enacted that these resources should be: “The taxes
upon imports and exports; the sale or allocation of lands forming part
of the national territory; the postal revenues, and the other taxes,
which the General Congress will impose equitably and in proportion to the
population; also such loans and credit operations as the same Congress
shall decree for the urgent needs of the nation, or for undertakings of
national utility.” (Article 4).

Has the foresight of the Constituents in establishing these sources
of revenue been justified? or, in other words, were the elements of
revenue created by the fundamental charter efficacious? A little study
of the system of Argentine revenue will show that of all these sources
enumerated, the only ones that have a permanent and fertile existence
are those relating to the customs receipts; that is, to the duties of
export and import. The others either give poor and uncertain results,
such as the sale and allocation of national lands; or are of a perilous
nature and to be used with restraint, such as loans and transactions on
credit; or they are drawn from services which produce revenue only within
narrow limits, such as the Posts.

Besides the sources appointed by the Constitution for normal requirements
and ordinary periods, the same charter enumerates another source to be
resorted to in exceptional cases or for purposes of defence, when the
common security and the general welfare of the State may demand it. This
source is the imposition of “direct taxes, during a fixed period, and
equally proportioned all over the Republic.”

It follows from these limits that the principal effective source of
revenue intended by the Constitution to form the Federal Treasury is
that of indirect taxation. So far the new fundamental code has not only
followed the example of the principal nations, and hearkened to the
counsel of economic science, but has also put into effect an eminently
practical and far-seeing procedure.

Señor Alberdi, who of all writers has most profoundly studied the system
of revenue established by the Argentine Constitution, has stated that
indirect taxation is the most fruitful fiscal resource, as is proved
by the customs revenues, which are relatively greater than those of
all other taxes put together. The indirect tax, adds Señor Alberdi, is
relatively the most equitable, as every one pays according to his tastes
and his powers of consumption; the foreigner as well as the son of the

[Footnote 97: See _Sistema económico y rentístico, Obras de Alberdi_,
Vol. IV, p. 419.]

As we have seen, the Constitution was far-seeing and lucid in its
definition of the character of the revenues of the National Treasury:
that is, in fixing upon the customs duties, the sale and allocation of
land, the products of the Posts, and other contributions to be imposed
by Congress for normal situations in a proportional and equitable
manner; and also in deciding upon the imposition of direct taxation
for determined periods, and relatively equal all over the country, for
exceptional and abnormal times.

According to the commentator quoted above, when the Constitution left
Congress the faculty of establishing, equitably and in due proportion,
taxes of other kinds, and abstained from naming them or limiting them
to a fixed number, it was because it wished to give the legislature the
right of adopting all those recognised by economic science, in order that
they might be imposed according to the principles of the Constitution

If we now cast an eye over the table of the national revenue, we shall
see that in 1908 the nation collected, in the form of direct taxes,
the sum of £583,344; in the form of indirect taxes, £4,803,920; for
the remuneration of services, a sum of £1,023,440, which had not the
character of direct taxation; as the usufruct of land belonging to the
national domain, and the profits of national undertakings, £2,510,240;
and as capitation fees, £8,000. We must also include in the receipts the
sums contributed by some of the provinces, and by the National Bank,
to the service of the national debt; guaranteed, on their account, by
the National Treasury. If we add together all these sums, which for one
reason or another were placed to the account of the nation in 1908, we
arrive at a general total of £22,392,160.

This revenue may be analysed as follows:——

The group of direct taxes is formed by the land-tax of the city of
Buenos Ayres and of the National Territories, which figures in the
balance-sheet as a sum of £320,320. In reality the product of this tax
is greater——amounting to more than £616,000——but the nation is by law
compelled to give a certain proportion of this sum to the Municipality
and another to the National Council of Education; what remains when these
obligations are satisfied belongs to the Government. The commercial and
industrial licences of the Federal capital and the National Territories
form the second class of direct taxes, their yield being £245,520; but,
as in the case of the land tax, the Government has to give part of this
sum to the city and part to the Council of Education.

The indirect taxes are those which produce the largest yield: they
include the customs duties upon imports, which in 1908 yielded
£12,036,000. The consular duties brought in £100,000; stamps and fees
accounted for £118,000.

Besides the resources furnished by the indirect imposts of the customs,
there has since 1891 existed in the Argentine another kind of indirect
internal duty, which is charged upon consumption, and which every day
acquires a greater importance, in proportion as the country is developed
and as wealth and population increase.

These duties were established at a critical moment of the country’s
history, and they mark a degree of evolution in the financial system
of the country. In 1891, when the liquidation commenced of the
great financial crisis which had completely overturned the economic
organisation of the Argentine, the strength of the country was broken,
the Treasury was empty, and there existed a public debt which was all the
more grievous in that the paper currency was absolutely inconvertible,
and decreased in value daily, in the midst of all the difficulties which
characterised that terrible time.[98]

[Footnote 98: See _Memoria del Ministerio de Hacienda_, 1890, p. 72.]

This overwhelming situation resulted in the establishment of indirect
internal imposts; that is, the branch of taxation which is levied on
the national industry and national production; but which is, in all
contemporary nations, one of the most fruitful sources of revenue; the
more so as its collection demands few sacrifices on the part of those who
pay it.

The realisation of this fortunate idea, which effected an important
innovation in the revenue system, was due to the administration of
Señor Carlos Pellegrini, in which Vincent-Fidel Lopez was Minister of
Finance, and was perhaps the most important and meritorious act of the

During this first year of 1891, the receipts furnished by this branch
of taxation did not attain to the expected results; they amounted only
to £224,682, distributed as follows: Alcohols, £123,511; beer, £23,549;
matches, £76,617; banks and companies, £982; total, £224,660. Out of a
total collection of $75,501,077 paper and $497,120 gold, or £6,743,518,
the yield of internal duties amounted only to 3.29 per cent. Four
years later, after the administration of internal duties had undergone
considerable modifications and improvements, so that the system of
collection had become more exact, these imposts furnished the Treasury
with £676,946, which out of a total collection of $29,805,651 in gold
and $28,958,460 in paper, or £11,571,076, amounted to 5·85 per cent. of
the whole.

In 1897 the budget voted by Congress increased the general revenue to be
collected to $33,492,000 in gold and $47,835,000 in paper (deducting from
this last sum 12 millions of paper produced by the shares of the National
Bank and 2 millions as the profits of the Bank of the Nation), or in all
$148,000,000. The yield of internal duties had increased to $19,360,000,
or 13 per cent. of the whole revenue.

In 1908 the domestic imposts produced £4,000,000, or 17 per cent. of a
total collection of £22,400,000. The chief element of this revenue was
furnished by the duty on the consumption of alcohol, which produced
£1,496,000. The tobacco duty came second with a yield of £1,760,000.
Matches yielded £269,000; beer, £308,000; insurances, £61,600. These
figures show how rapid has been the increase of the revenue from internal
duties on consumption.

If we disregard that portion of the revenue which is raised by imposts,
and examine the yield of the industrial undertakings exploited by the
nation, we shall find that as yet they are far from constituting any real
resource for the Treasury, and far from compensating the large amounts
of capital employed. Comparing the yield of these undertakings with the
working expenses, we find that the balance, as a general thing, is on the
losing side.

This is the case with the four railways belonging to the nation, whose
yield, in 1905, was £1,012,000. The working expenses, the renewal of
rolling-stock, and repairs of the permanent way, completely absorbed the
revenue. We must hope that this ruinous state of things will disappear
presently, when the network of State railways is completed, and the lines
unite important centres of production, and the system of administration
is perfected.

After this miserable result we may point with relative satisfaction
to another important industrial undertaking of the Government: the
sanitation works of the city of Buenos Ayres. Apart from the hygienic
advantage, which is already very evident, the financial results are
worthy of attention, as they show that this undertaking will very shortly
cover, if not the whole, at least a portion of the interest on the
capital employed.

The ordinary working expenses of this undertaking amounted in 1908 to
£258,202, while the revenue amounted to £673,200. This left a balance in
favour of the Treasury of £415,000, of which a great part was employed,
by virtue of special laws, in the enlargement of these works, which
enlargement will still further increase the revenue. The financial result
of this undertaking is a conclusive proof that such enterprises, when
directed with method and intelligence, are always profitable to the State.

The Postal Service, which the authors of the Constitution expected to be
a considerable resource, has hitherto given only negative results; the
receipts have not hitherto covered the working expenses. The ordinary
expenses of the Department of Posts and Telegraphs were £1,144,000 in
1908, while the effective receipts for the same year were only £936,320;
giving a deficit of £207,680. In reality this deficit was far greater,
because fresh expenditure was necessitated by the construction and
repairs of telegraphic lines, and certain purely nominal receipts,
arising from the franking of official correspondence, were put on the
credit account.

If we now proceed to examine the revenue derived from the national
estates, we find that its most important item proceeds from the sale and
allocation of the public lands. This revenue, which figures among those
enumerated by the fundamental charter as forming the resources of the
Treasury, has by no means produced what it should, owing to the lack of
method or foresight in the management of this important administrative
department. In 1908 this source produced only £278,080; and this sum
represents a considerable increase over previous years, especially over
the year 1904, when the revenue was only £27,368. But when we take
the fact into account that the nation still possesses 212 millions of
acres of land, which are situated in territories whose population is
rapidly increasing, and which will shortly be well served with railways,
we perceive at once that these lands, which are a powerful source of
attraction to immigrants, may also in time become a very important source
of revenue.

The revenue derived from the exploitation of industrial undertakings
and from the national domains being thus eliminated from the list of
effective revenues, as being nominal or insignificant, we see that the
nation has no other positive resources than the customs duties and
imposts upon consumption. This explains the development of the budgets
of the last few years, in which the domestic and indirect duties have
increased the fiscal receipts.[99]

[Footnote 99: See _Memoria del Ministerio de Hacienda_, 1895, Vols. IX.
and XI.]

One of the characteristics of the present situation of the Argentine
is the remarkable elasticity displayed by the increase of the fiscal
resources. At the present time few countries in the world present a
similar spectacle. Here, more than in any other country, the official
revenues are in direct relation to the result of the harvests and the
exportation of the products of the ranch; so that the table of fiscal
receipts is a kind of infallible barometer, which measures the degree of
wealth and prosperity of the general population.

If——not to go back too far in our investigations——we take the thirteen
years from 1895 to 1908 as an example, and if we convert into gold the
sums received in paper, according to the average rate of exchange for
each of these years, we find, in the first place, that in 1895 the
Treasury received £7,600,000. Since then these figures have increased
in rapid progression; passing from £7,600,000 to £8,600,000; thence
to £10,000,000; thence to £10,600,000; thence to £14,600,000; but in
1900, through economic causes such as the loss of harvests, anthrax,
the closing of English ports to Argentine live-stock, joined to such
political causes as the fear of complications with Chili, the revenues
fell to £13,000,000. But progress was not long in establishing itself
anew; in 1904, the revenue was £15,200,000; in 1907, £21,200,000; and in
1908, £22,400,000, which is the highest figure the administration has
ever known.

To appreciate this enormous progress at its true worth, we must take
the fact into account that it was precisely during these years that
the nation released several sources of revenue which had previously
been taxed; such as duties levied on the export of natural products,
and on natural or artificial wines, and additional duties levied on
importations, all of which represented a respectable number of millions
per annum.

Thus in thirteen years, from 1895 to 1908, the fiscal receipts have
increased by £14,800,000, or by 194 per cent.

Such a result cannot but be satisfying, and it would be the most eloquent
proof of the intense vitality of the Argentine finances were it not for
the still more rapid increase of official expenditure. This also has
increased, rapidly and enormously, more often than not exceeding the
revenue, and leaving each year a more or less important deficit, which,
accumulating from one year to another, has finally to be converted into
a consolidated debt, whether foreign or domestic. “The practical result
of the budgets from 1863 to the present time,” says an official document,
“has been an uninterrupted series of deficits.”[100]

In the face of this situation the patriotic advice which the Minister of
Finance, J. M. Rosa, gave the Government and the Congress in a memorable
document some years ago, is more than ever applicable.

“We must do our utmost to economise,” he said, “by restraining ourselves
and reducing our expenses to the absolutely indispensable. It is only
by applying ourselves to the work of simplifying our administrative
services, by suppressing useless formalities and superfluous employments,
by scrutinising the least details of the public expenditure, that we
shall succeed in making large economies. It is certain that to purge
the administration of its ancient vices, to sweep away all useless
appointments, to refuse to find vacant places at the bidding of power and
influence, and to establish the strictest rules of economy, is a task
of no mean difficulty; but we cannot stop to think of the animosity and
the vindictive temper which it may arouse when duty renders such conduct

[Footnote 100: See _Memoria del Departamento de Hacienda de 1899_, by
Joseph M. Rosa.]

If Argentina truly wishes, not to compromise her lofty destinies, but
to remain a centre of attraction to the labourers or the disinherited
children of fate to whom she offers the resources of her fruitful soil;
if she aspires to be, in the twentieth century, the great centre of the
world’s emigration, as were the United States in the nineteenth century,
she must obtain an administration both methodical and economical; careful
of the public moneys, and at the same time open to all material progress.
It is thus that she will win the confidence of men and of capital; that
is, of the two elements which she must still multiply in order to become
a great nation.

                               CHAPTER II

                            THE PUBLIC DEBT

Statistics of the public debt on the 1st January 1909——History of
    the public debt——The first loans.

The financial crisis——Consolidated loans——The Romero arrangement——
    Loan for the rescission of guarantees——The internal public
    debt——The total of the Argentine public debt, and its annual
    cost in dividends and redemption——The proportion of financial
    charges as compared to other budgetary expenses.

The burden of the public debt is heavy, but not unduly heavy in
    relation to the productive power of the country——The necessity
    of restraining further issues and of converting old debts——The
    efforts of the Argentine to improve her credit.

All the vicissitudes through which the Argentine has passed in the course
of the nineteenth century have left their traces upon the history of the
National Debt. To the legitimate uses of credit have been joined abuses;
but all this now belongs to the past, and we do not intend, in a book
dealing with matters as they are, to recount this history at length, nor
to comment upon it nor criticise it.

The consolidated National Debt, on the 1st July 1909, amounted to
£62,892,428. It may be analysed as follows:——

                           FOREIGN DEBT.[101]

                                 Circulation             Annual Cost,
                             on 1st January 1909.          Interest
                                                      and Amortisation.
                                      £                       £

  Loans at 5 per cent.           23,350,139·76          1,702,585·29
  Loans at 4-1/2 per cent.        7,697,262·88            516,147·42
  Loans at 4 per cent.           29,820,312·79          1,454,465·64
  Loans at 3-1/2 per cent.        2,004,710·40            121,238·09
                                --------------         -------------
  Total                         £62,882,425·83         £3,794,436·44

[Footnote 101: By 15th September 1909, the amount of the debt had been
reduced to the following figures: 5 per cent., £22,702,330; 4-1/2 per
cent., £7,579,580: 4 per cent., £29,728,562; 3 per cent., £1,920,000;
total, £61,930,472.]

In the total given above is an important sum of which the cost, though
entered in the National Budget, is really borne by the various provinces.
Items in this amount are a sum of £6,800,000, for which the Province of
Buenos Ayres is responsible; the £3,000,000 of the conversion loan of
Santa Fé; £2,800,000 taken up by Entre Rios; and the Córdoba conversion
loan of £1,000,000; while Mendoza accounts for £600,000 and the National
Bank in liquidation, for £1,800,000. This establishment, although
belonging to the Government, bears the cost of its debt out of its own
resources. Eliminating these £16,000,000, we find that the external debt,
whose cost is borne by the Treasury, amounts not to nearly £63,000,000,
but to £47,000,000.

We shall ultimately have occasion to inquire how far this debt weighs
upon the resources of the Treasury, what the burden per inhabitant
amounts to, and how it stands in relation to the debts of other
countries. For the moment we must glance backward in order to realise
the historical conditions under which this debt was contracted, and what
its destination has been.[102] The first credit transaction effected by
the Republic abroad was concluded a few years after the Declaration of
Independence. In 1822 the Province of Buenos Ayres, which had always
been the heart and head of the Republic, taking its place, indeed,
under certain conditions, and under others representing it in foreign
countries, was fortunate in having at its head a progressive Government,
which, by its profitable initiative, has left ineradicable traces behind
it. The President was General Martino Rodriguez; the Ministers included
Bernadino Rivadavia and Manuelo-Josepho Garcia.

[Footnote 102: See, in _The North American Review_ for May 1902, an
article by Señor Alberto Martinez, entitled: “National Debts of the
World. IX. Public Debt of Argentina.”]

This Government cast its eyes over the empty surface of the vast
Argentine territory; it saw immense wealth unexploited, for lack of the
necessary elements; it realised its great need of material progress,
and understood, with a just and clairvoyant judgment, that of all these
needs the most urgent were the construction of a port for the exchange of
products with the outside world, the instalment of a water supply which
would ensure health to the inhabitants, and the establishment of villages
along the line of the new frontier, serving as desert outposts, and
constituting a military pale to withstand and confine the irruptions of
the savage Indians.

For the realisation of these then important undertakings of public
utility the Government of 1822 resolved to obtain the necessary
resources, by raising a loan of a million sterling, giving as
consideration a dividend of 6 per cent. and an annual redemption of 1 per
cent.; the House of Baring to act as agents for the loan. Unhappily the
executive power employed the resources furnished by this transaction in
founding a bank which had a very short existence, and the intended public
works were not effected. More than half a century elapsed before their

The loan was issued in 1824, and was taken up in entirety at a discount
of 30 per cent., so that the Government received £700,000. For many
years, at the time of the Rozas tyranny, and during the ensuing period
of national dissolution, the payments on this loan were suspended; not
until 1856, when the tyranny was overthrown and the Argentine nation
reconstituted, did the Government of Buenos Ayres instruct Norberto de la
Riestra to come to an understanding with the creditors, and to offer them
the punctual payment not only of the future dividends, as they fell due,
but also of all those overdue, on deferred stock at 11s. 2d., at 2 per
cent. interest, with an annual redemption of 1/2 per cent. This debt is
today extinguished, and has left no traces on the budget.

The second loan contracted by the nation after its reorganisation
was intended to cover the expenses of the war to which it had been
unreasonably provoked by the tyrant of Paraguay in 1865; and this loan
has also disappeared from the ledger of the public debt.

The third national loan was contracted in 1870, the sum being £1,042,978,
under the Presidency of Señor Sarmiento; and the capital was required for
the accomplishment of public works. This loan and that preceding it were
finally converted into others which carried a lower interest.

Then these transactions were followed by others, of which we will briefly
enumerate the details.

The railway loan, authorised by the law of the 2nd of October 1880, was
to raise the sum of $12,000,000; a sum required for the extension of the
Central North Railway as far as the town of Jujuy, the Andean line as far
as San Juan, and for the branch line to Santiago de l’Estero. It bore
6 per cent. interest, with an annual redemption of 1 per cent. It was
issued in London, in June 1881, for the amount of £2,450,000, at a price
of 91 per cent.

The loan entitled “The Public National Funds,” which was decreed by the
laws of 12th October and 28th June 1883, enabled the Government to pay
for the shares in the National Bank (to-day in liquidation), which it
had acquired. This loan, bearing 5 per cent. interest and 1 per cent.
redemption, was issued in May 1884, by Baring Brothers, at a discount of
84·5 per cent., and amounted to £1,683,100.

The loan entitled “Harbour Works of the Capital,” authorised by the law
of 27th October 1882, was contracted for the construction of the new
harbour which the city of Buenos Ayres required for the development of
her foreign trade. An issue of $20,000,000 in gold was decreed, bearing 6
per cent. interest, with 1 per cent. redemption.

The “Public Works” loan was created by the law of 21st October 1885; its
amount was £8,400,000, and its object the unification of certain loans
required for various undertakings. The shares bore 5 per cent. interest
with an annual redemption of 1 per cent. The sum issued was £8,333,000,
of which £4,000,000 was placed in London, in January 1886, at 80 per
cent., and the remainder in January 1887 at 85-1/2 per cent. This loan
was guaranteed, as far as the interest was concerned, by the customs
revenue, and the representatives of the investors had on this pretext
reserved certain rights of control over the administration of this

The “Central Northern Railway Loan” was divided into two series. The
first, authorised by the law of 9th October 1886, was of £4,000,000;
but of this sum only £3,968,200 was issued, as follows: to London, in
June 1887, £1,300,000 at 91·5 per cent.; in April 1888, £1,500,000
at 94 per cent.; in May 1889, £1,168,200 at 97 per cent. The second
series, authorised by the law of 30th October 1889, amounted in all to
£3,000,000, of which only £2,976,000 was issued. The two loans bore
an interest of 5 per cent. and a redemption of 1 per cent.; they were
contracted to allow of the prolongation of the Central Northern Railway.

The “National Bank” loan, created in virtue of the law of 2nd December
1886, authorised an issue of £2,058,200, to enable the Government to pay
the debt which it had contracted towards the said Bank. The bonds were
issued at 90 per cent.; they bore an annual interest of 5 per cent., with
a redemption of 1 per cent.

The “Treasury Bonds Conversion” loan, authorised by the law of 21st June
1887, was employed, as its description indicates, in the consolidation
of a debt contracted for a short term. The issue required was $5,078,330
paper, but only £624,000 was actually realised.[103] The stock carried an
annual revenue of 5 per cent., with 1 per cent. redemption, while the old
Treasury Bonds have an interest of 9 per cent.

[Footnote 103: The sum of $5,078,330 is equivalent at the present
discount of paper to £446,873; in 1887 the value of the paper piastre was

The loan contracted by virtue of the law of 15th August 1887 was intended
to balance certain debts on the part of the National Government towards
the Government of the Province of Buenos Ayres. The issue was one of
£3,973,700, the interest being 4-1/2 per cent. and the redemption 1 per
cent.; it was taken up at 90 per cent.

The “Conversion of Debts” loan, at 6 per cent., contracted in virtue
of the law of 2nd August 1888, was an operation of consolidation and
reorganisation of debts. The issue amounted to £5,290,000. The bonds,
which yielded 4-1/2 per cent., with 1 per cent. redemption, were
negotiated in London, in February 1889, at 90 per cent.

The “Conversion of Hard Dollars” loan was issued in virtue of the law of
2nd July 1889, which authorised an issue of £2,600,000 to be applied to
the conversion of debts contracted in hard piastres. The new stock was to
yield an interest of 3-1/2 per cent., with 1 per cent. redemption. The
issue actually amounted to £2,659,500.

The “Consolidation Loan” (authorised 24th January 1891) was one of
the most important credit transactions ever effected in the Argentine
Republic: a transaction which evokes memories of a critical period which
we ought briefly to recall.

When Signor Pellegrini’s Government came to power, on the 6th August
1890, the country was suffering from a political upheaval, and at the
same time was entering upon a time of severe financial crisis, “the most
violent, the most desperate crisis which has ever afflicted the Republic,
and put its honour to the test,” according to the words of Vincenzio
Lopez, the eminent finance Minister of that administration.

The Treasury had exhausted its resources, in order to increase and
support the funds of the National Bank, whose debt to the Government
amounted to $47,491,483[104] in paper, and £2,528,224 in gold, while its
debt to foreign creditors amounted to £3,708,037, and to home creditors

[Footnote 104: This amount is not reduced to gold, the rate of exchange
not being fixed at the time.——[TRANS.]]

If the situation of the National Bank, which served as the Government’s
treasury, was serious, that of the National Mortgage Bank and that of the
City of Buenos Ayres were no less grave. The first owed $1,690,833 in
paper and £111,475 in gold in dividends, and the second was drained dry
by its debts, amounting to $34,646,533 paper and £92,339 gold at home, as
well as £1,960,000 abroad.

From the outset the Government concentrated all its efforts upon the
solution of these three grave problems. It proposed the reconstitution
of the National Bank; it would enable the Mortgage Bank to continue
operations, chiefly by repaying the advances which it had made to the
State; and assist the City of Buenos Ayres to meet its engagements in
respect of the interest of the foreign debt, constraining it to collect
and employ the municipal revenues in a more methodical manner.

The prime object of this important transaction was “to give the country
a period of economic repose, by provisionally suspending the removals
of metallic currency for the liquidation of the nation’s foreign
engagements,” as the Government declared in the message which accompanied
its proposal. To achieve this end, the creation of a consolidation
loan was proposed, amounting to £12,000,000, and increased later on to
£15,000,000 upon the advice of the lenders, the result being destined,
for a period of three years, for employment in paying the interest
on the nation’s loans and in relieving the Treasury of the burden of
guaranteeing the dividends of the railways.

In accordance with agreements concluded between the Government of the
Republic and the banking houses which undertook to negotiate the loan,
the banks undertook to accept, during a period of three years, as
consideration for the debt, and for the effectual guaranteeing of the
railways, bonds of the loan itself; and undertook, moreover, to accept
them at par. The issue each year was to be proportional to the sum
necessary to pay the interest on the debt.

The nation, on the other hand, undertook to set aside for the payment
of the interest on the said loan 6 per cent. of the customs receipts,
which were subjected to a monthly levy of the amount required, the amount
affected by the prior rights of the loan of 1885 being deducted first.

The nation also engaged not to increase its foreign debts, whether by
borrowing or giving guarantees, during the three years fixed for the
issue of the loan.

The total amount authorised was £15,000,000, the interest 6 per cent.,
and redemption was to commence at the end of three years, to be completed
in thirty years. Coupons could be paid to the State in settlement of
customs duties. Of the above nominal sum, only £7,691,725 was actually
raised, £7,308,275 remaining unissued for the following reasons:——

Under the administration of Señor Saenz Peña, when Señor Romero was
installed in the Ministry of Finance on the 12th October 1892 he found
the Consolidation Loan in process of issue, the stock being sold at need,
the 6 per cent. bonds being guaranteed by the customs receipts; they were
then selling in London at about 63 per cent. Señor Romero estimated that
if the system of paying debts by means of debts is generally a ruinous
one, it was especially so in this case, where the transaction was being
effected by means of bonds so badly depreciated as those of this loan.

The first important act of this Presidency was to make an arrangement
with the representatives of the bearers of the foreign debt, by which
they consented to a reduced interest for five years——that is, until
1898——the redemption charge being suspended simultaneously. In the
following years, from 12th July 1898 to 12th January 1901, the full
interest alone was to be resumed, and from 1901 the payment of the
redemption charge would also be resumed.

As a consequence of this arrangement, it was decided to issue no further
stock of the loan, even in cases where the issue was authorised: as,
for example, in the effective guarantee of railway stock. Holders of
the latter would receive payment on the basis of the price at which the
shares were quoted. This is why the Consolidation loan issue of 1891 was
confined to the sum already cited.

The “Travaux de salubrité,” or Water Supply and Drainage loan, authorised
by the law of 30th January 1891, to the extent of £6,750,000, in bonds
bearing 5 per cent. interest and 1 per cent. redemption, was created
under the following conditions:——

The Government of Señor Juarez Celman, which preceded that of Signor
Pellegrini, was inspired by the Spencerian doctrine, which asserts as a
principle that the State is always a bad administrator, and fell into
financial and administrative errors which were to cost the country dear
indeed. Thus it resolved to place in the hands of individuals all the
industrial enterprises undertaken by the nation, among which was the
scheme for supplying the city of Buenos Ayres with water and facilitating
the elimination of its filth and sewage.

Every one very soon saw, however, that a serious mistake had been
made. The individual firm entrusted with these important services was
exclusively preoccupied in exploiting the public, and its methods
resulted in protests and resistance on the part of the inhabitants
of Buenos Ayres. On 6th August 1890, the Government, Pellegrini
being president, came to the conclusion that it was its duty as an
administration, and was also a matter of political efficiency, to place
the sanitation works in the hands of the State once more; and with this
object it obtained an authorisation to contract a loan of £6,750,000, at
5 per cent. and 1 per cent. redemption. Such was the origin of this loan,
of which stock to the value of £6,374,995 was issued.

The “Rescission of Railway Guarantees” loan, authorised by the laws of
10th January 1896 and 30th December 1898, was contracted to disburthen
the State of the heavy obligations which weighed upon it as a result
of having guaranteed an interest of 6 per cent. on enormous capitals
employed in the construction of railways. With this object £11,699,957
worth of stock was created, and issued at 4 per cent. and 1/2 per cent.

The loan for the “Conversion of Provincial Debts,” created by the law of
8th August 1896, was justified by the highest considerations of national
solidarity, and of the defence of Argentine credit abroad.

The enormous debts contracted by the Provinces, unauthorised and
uncontrolled by the central power, quickly resulted in a veritable
bankruptcy, at the end of a period of waste and folly, of unchecked and
uncalculating expense.

The nation, which had in no way intervened in the matter of these
loans, and had contracted no obligations whatever on their behalf,
might strictly have refused to accept any responsibility for such heavy
liabilities; but it is indubitable that the insolvent condition of the
Provinces in the European markets might have affected the credit of
the nation, the latter being, in foreign eyes, involved in all these
individual failures.

What President Quintana said in his inaugural address on the subject of
the peace of the Provinces, which is also the peace of the State, may
also, with no less reason, apply to credit.

On the other hand, the nation could not remain indifferent to the
precarious situation created by the suspension of payment in the
Provinces. As practically all their revenues were already pledged, so
that they could not pay interest on their debts for many years, the legal
action of their creditors might fetter their administrations, oppose
serious obstacles to the development of their sources of wealth and
production, and, in short, inflict serious damage upon the entire country.

These very serious considerations decided the public powers to lend the
Provinces their aid, so that the latter might make equitable arrangements
with their foreign creditors, and as far as possible free themselves from
such heavy liabilities.

These arrangements were for the most part effected by exchanging the
4-1/2 per cent. stock of interior debt which the Provinces promised
against 4 per cent. stock of the foreign debt, which the nation remitted
to the creditors of the Provinces.

The total of these provincial debts amounted to £30,355,190, and the
nation, for the complete liquidation of the same, gave 4 per cent.
stock, bearing a redemption charge of 1/2 per cent., to the value of
£17,199,899. The interest and annual redemption charges of this stock
amounted to £773,995.

On the other hand the nation acquired by this arrangement 4-1/2 per
cent. stock of the loan known as the Guaranteed Banks loan to the value
of £9,175,233, the interest and redemption charge (of 1 per cent.)
amounting annually to £504,638. Adding to this sum that of £232,000, as
the contribution of the Province of Buenos Ayres, and £51,220 furnished
by the Province of Entre Rios, we have a total of £827,858 annually.
The exchange of the internal against the external debt thus produced a
temporary profit of £53,863 per annum; we say temporary, because the 4
per cent. stock has a later date of redemption than the 4-1/2 per cent.

The “Conversion of Municipal Stock” loan, authorised by the laws of 25th
September 1897 and 15th December 1898, was raised, to the extent of
£1,540,000, by the issue of stock at 4 per cent. and 1/2 per cent. The
result of this issue was destined to pay what still remained owing to the
creditors of the National Bank in liquidation.

The law of 5th January 1899 authorised a loan of £6,000,000, intended to
balance the debts of the Public Treasury; the alcohol duty being offered
as guarantee to the extent of £800,000 per annum; but hitherto the loan
has not been negotiated, and there is no longer any question of this

Such, briefly detailed, are the antecedents of the various foreign loans
contracted by the Argentine nation. As for the domestic consolidated
debt in 1905, it was the object of a complete reorganisation, so that
to-day the history of its origins is not of much practical interest. It
amounted, on 1st January 1909, to £7,639,760 in gold and £9,199,581 in
paper, of which £6,900,000 was in gold and £7,700,000 in paper in 5 per
cent. stock, £710,620 in gold in 4-1/2 per cent. stock, and £880,000
in paper in 6 per cent. stock. This gives us a total (in gold) of
£16,839,341, on which the charge in interest and redemption absorbs an
annual sum of £1,004,445.

Here is the analysis of the internal debt:

                            INTERNAL DEBT, _1st January 1909_.

                                 Gold.                     Paper.
                         ---------/\------------ ------------/\------------
                         Stock in   Interest and   Stock in    Interest and
                       Circulation. Sinking Fund. Circulation. Sinking Fund.
  6 per cent. loan,         ——            ——         £880,000      £58,080
  5 per cent. loan,     £6,929,140      £422,100   18,908,140    1,110,898
  4-1/2 per cent. loan,    710,620        40,750      ——            ——
                        ——————————      ————————  -----------   ——————————
  Totals                £7,639,760      £462,852  £19,788,140   £1,168,978
                        ——————————      ————————  -----------   ——————————

As we explained in our first edition, the first action of the Government
which assumed power in October 1904 was to convert the various loans
of the internal debt, which bore an interest of 6 per cent., and
amortisation charges of 6, 4, 3 and 2 per cent., into one single loan
at 5 per cent., with a redemption charge of 1 per cent. This operation
gave the following results: The amount of 6 per cent. stock, including
National Bank stock, amounted to £5,888,881, or $66,918,300 paper. Of
this total $50,814,000, or £4,471,632 were converted in the Argentine and
£664,884 in Europe, or in all £5,136,516; the balance then amounting only
to £730,184. The result was that the average price obtained for converted
stock was 87.59 per cent., and for unconverted stock 12.40 per cent.[105]

[Footnote 105: The following figures relative to the Argentine foreign
loans taken from the Investment Handbook of the International Stock
Exchange, may interest the reader.——[TRANS.]

Argentine 5 per cent. Stock (1886-7): Authorised, £8,290,100: issued or
subscribed, £6,306,500. Price on 1st January 1910, 105-1/2.

Argentine 4-1/2 Sterling Loan (1888-9): Authorised, £5,263,560; issued,
£4,322,060. Price on 1st January 1910, 100.

Argentine 3-1/2 per cent. External Bonds (1889): Authorised, £2,639,500;
issued £1,923,160. Price on 1st January 1910, 80.

Argentine 4 per cent. Railway Rescission (1895): Authorised, £11,607,100;
issued £10,205,100. Price on 1st January 1910, 97-1/4.

Argentine 4 per cent. Gold Bonds (1900): Authorised, £2,828,515; issued,
£2,752,855. Price on 1st January 1910, 91.

Argentine Cedulas, Series B. (1886). These are certificates to bearer
issued by the National Mortgage Bank in lieu of cash lent to borrowers
on real estate. They were first issued in 1886, when a total of
$50,000,000 was issued in three series, A, B, and C. They are redeemable
by sinking funds of 1 per cent., and under Article 60 of its organic law
the National Mortgage Bank has to add to these funds the sums in cash
received from its debtors on account of advances of capital or sale of
properties. Cedulas are guaranteed by the nation.

In circulation, 31st August 1909, $1,175,250. Cancelled. $13,824,750.
Interest, 7 per cent. Prices have varied from 24-1/4 to 48-3/4. Price on
1st January 1910, 44-1/2.

Buenos Ayres Water Supply and Drainage Bonds (1892). Authorised,
£6,324,400. Present amount, £5,620,820. The operation of the Sinking Fund
in January 1910 will further reduce this amount. Prices have varied from
52-3/8 to 106. Price on 1st January 1910, 106.

Buenos Ayres Sterling Bond 3 to 3-1/2 per cent. Authorised, £10,296,000;
issued, £9,796,000. Price on 1st January 1910, 69-3/4.]

Although the Minister who effected this operation, exceeding the advice
of competent persons, or rather defying their judgment, took it upon
himself to issue a fervent panegyric of his transactions in an official
document, we none the less consider that the fundamental defect of
this conversion lay in having largely reduced the amortisation rate
of some of these loans, bringing them down from 6 per cent., 4 per
cent., 3 per cent., and 2 per cent., to a uniform rate of 1 per cent.;
as the sinking-fund, as a general thing, in the case of all financial
administrations, and especially of those of a country without any
great experience of government, is a restraining factor, a limit which
Governments and Parliaments impose upon themselves, in order not to
spend all they collect. Without this money-box, this “woollen stocking”
of Governmental savings, as M. Neymarck called it, it is certain that
there would be no trace in the Argentine Treasury of all the millions it
has paid in amortisation during the last few years; so that the present
generation would have cast upon the shoulders of the coming generation a
far heavier burden than that the latter will inherit as things are.

Returning to the external debt, we may state that among the loans
which figure in the national liabilities are eight, with a capital of
£23,350,139, at 5 per cent. interest; two, with a capital of £7,697,263,
at 4-1/2 per cent.; eleven with a capital of £29,840,315, at 4 per cent.,
and one of £2,004,710 at 3-1/2 per cent.

The public debt, external and internal, amounts to the following:——

  External debt      £62,892,428
  Internal debt       16,839,365

Let us see to what extent the interest on this debt weighs upon the

  External debt                  £3,794,436
  Internal debt                   1,004,445
    Total on 1st January 1909    £4,798,881

In the tabulation of the foreign debt we have not included the new loan
of £10,000,000, the stock being known as “Argentine Internal Credit,
1909,” bearing 5 per cent. interest and a 1 percent. consolidated sinking
fund, which the national Government has just raised in Europe. This loan,
which was readily taken up, was divided in the following proportions:
England, £2,960,000; France, £3,200,000; the United States, £2,000,000;
Germany, £1,640,000.

Taking this new loan into account the total of the external debt is

The various amounts of interest payable on the whole National Debt,
external and internal, converted into gold at the rate of 4s. per
piastre, represent a total of £4,778,882. As we have stated before, this
burden does not weigh exclusively on the Treasury; we must deduct from
it the interest paid by the Provinces and the National Bank, or, a sum
of £687,628, so that the interest paid by the nation amounts in fact to
£4,111,253. Comparing this figure with the total of the general budget,
we find that the interest on the National Debt amounts to 25·34 per cent.
of the total expenditure, of which 22·3 per cent. weighs exclusively on
the nation. Finally, we must not forget that large sums included in the
budget are paid into the sinking fund at a rate which should rapidly
decrease the debt; a factor which evidently must be reckoned as a

In the face of this enormous debt are we to conclude, with certain
authors of repute, that when the payment of the interest on the public
debt absorbs more than 40 per cent. of a nation’s revenue, that nation is
in the most serious situation, not far removed from bankruptcy?

Certainly the theories of these gentlemen are based upon valuable data,
which are deduced from the science of finance, or taken from the actual
examples of certain nations; but it is also certain that these theories
have been formulated with the mind directed toward European countries,
in which population, wealth, and all the phenomena of social life are
evolved in a slow and harmonious manner; but for countries like the
Argentine, countries with enormous natural resources, subject to sudden
increases of wealth and population, where all manifestations of progress
are abrupt, such theories are not true.

Again, in order to estimate justly the extent to which this debt
weighs upon the nation, we must take account of the special conditions
under which this debt was created; a factor which makes international
comparisons difficult. It is not enough to know only the total of the
National Debt in order to comprehend the financial position of a State;
for it may well happen, as in the case of Australia, that the capital
of the loans forming the debt has been employed in productive work, the
yield of which contributes to increase the Treasury receipts.

Neither can the amount of debt per inhabitant give us a true idea of the
financial vitality of a country; for just as a given burden may crush one
man, while another can bear it with ease, so, according to the physical
resources of either, one nation may support a debt with ease which would
utterly overcome another.[106]

[Footnote 106: M. Alfred Neymarck has shown how broken a reed is any
argument based upon the amount of debt per inhabitant, and how void of
any scientific basis.

“We have successively passed in review the various countries of Europe,
and by basing our arguments upon facts and exact figures we think we have
demonstrated that in the evaluation of a nation’s credit, of the price of
its stocks and their rate of capitalisation, the figure ‘per inhabitant’
has no value and no significance. Such statistics, which are more or less
used everywhere, in France and abroad, by force of habit and routine, are
absolutely incorrect and incomplete; they have only one sure result: they
infect the spirit of judgment of those who rely on them.”——In the journal
_Le Rentier_, for the 7th, 17th, and 27th of September and the 7th of
October 1904.]

The weight of the National Debt must be estimated by its relations
with the economic system and the conditions of national development.
For example, in making such an estimate with regard to the Argentine
debt, we find that side by side with the increase of this debt there
is a notable increase of the national wealth, which should keep all
creditors tranquil and satisfied as to the liquidation of the obligations
contracted towards them on the part of the State, although these
obligations might at first sight appear out of proportion to the means of
the State.

If we take, as a mark of national wealth, the value of products exported,
we have the following figures to go by: between 1890 and 1899 the
value of the Argentine exports rose from £20,163,600 to £36,983,200.
In 1903 it amounted to £44,000,000; in 1904 to £52,800,000; in 1905 to
£64,400,000; in 1906 to £58,400,000; in 1907 to £59,200,000; and in 1908
to £73,200,000.

Side by side with the exportable products the revenues of the nation
have also achieved an extraordinary expansion, which has enabled
the Government to complete important public works, to perfect its
administration, to acquire and equip the first fleet in South America, to
spread primary and secondary education through its territory, and to push
its civilising agencies to the utmost limits of the country.

In 1898 the ordinary gold receipts rose to £6,416,440, while in 1903 they
amounted to £8,879,420, and in 1904 to £9,345,708: but in 1899 there
existed additional importation duties, which are now suppressed. In 1907
the receipts in gold amounted to £12,900,000, and in 1908 £13,600,000.

The same increase is to be observed in the receipts collected in paper
money. In 1898 they amounted to £4,201,495; in 1903 to £5,709,749; and in
1904 they rose to £6,086,753, although the duty on wine had been removed
during the first half of the year. In 1907 these receipts amounted
to £8,316,000, and in 1908 to £8,756,000; figures which represent an
enormous progress.

Thus a country in which the national resources and those of the Exchequer
increase in so rapid a progression, is evidently in a position to
support, without much anxiety as regards the future, the burden of its
National Debt, however enormous the latter might appear.

But such considerations must not, of course, incite the Administration
to violate the financial principles of method and economy, nor lead it
to increase the public expenditure at an unjustifiable pace, in order to
meet parasitic requirements, or satisfy electoral demands. What gives
rise to such fears is that when there is need for works of a certain
degree of importance, such as would give a stimulus to the material
progress of the country, or at least to endow the country with new
buildings and constructive works, the budget never comes to the rescue,
and the end is always an issue of internal stock.

Of late years the Republic has enjoyed a pastoral and agricultural yield
such as it has never seen in its economic existence. This double yield,
the result of energy favoured by climate, was not only remarkable for
abundance, but the prices which it commanded in the international markets
were the highest that have ever been known up to the present. All would
seem to indicate that in consequence of this abundance the Argentine
Treasury would overflow with money; that it would be in a position to
meet all the current expenses of administration, and also many of the
extraordinary expenses which are demanded by a nation in process of
formation for the stimulation of its material progress.

Unhappily it has not been so. The ordinary revenue, like the national
production, has exhibited a marvellous elasticity: but in spite of that
it has not been enough to cover the ordinary expenses.

Turning from the shadows that obscure the picture of the financial and
economic situation, we may, in spite of all, conclude that investors who
have placed their capital in Argentine loans may be fully reassured that
the interest will be scrupulously forthcoming. Although the majority of
the loans have been employed in other ways than those intended at the
time of their issue, it is none the less true that by their aid certain
works of national utility have been effected, which could not have
been realised without such resources. To cite only two, let us recall
the fact that the nation has spent £10,976,304 in the construction of
railways; while the Buenos Ayres Water Supply and Drainage Works absorbed

Again, as the great Argentine financier Señor Tornquist has said, we must
not forget that although the country avoided a war with Chili it was only
by allowing £15,000,000 to be swallowed up in ships and armaments; and
this was done without recourse to the outside world for loans, after not
less than £4,000,000 had been absorbed by military preparations in the
interior. These sums, representing nearly a quarter of the present debt,
were spent to avoid a fratricidal war, which would have cost us ten times
as dearly.

Apart from the fruitful application of loans, the creditors of the
Argentine must also consider the sacrifices made by various Governments
to defend and uphold the financial credit of the Republic. The service
of the first loan contracted by the nation——that of 1824——was, as we
know, suspended during the melancholy period of tyranny and national
dissolution; but hardly was the Argentine family reunited, hardly was
a regular Government established, when the latter hastened to resume
the liquidation of the liabilities which had been contracted. President
Avellaneda, in a solemn moment, has eloquently recalled the facts:——

“There is a new nation in the process of birth, possessed of the
sentiment of its own greatness; either by a puerile hallucination or by
the revelation of its destiny. It has barely formed a Government; but
already it imagines vast schemes; it asks and obtains money from London;
for capital, although she is represented as hard and having no bowels of
compassion, knows often a sudden tenderness for dreams.

“But the dreams of this people are quickly destroyed: then follows
anarchy, with its long and lamentable lapses of self-knowledge: anarchy,
into which young societies fall, by the very weakness of their native
elements; until at length they are seized by the iron hands of tyranny,
as was indeed the fate of Argentina. And a tyranny that endured for
twenty years! Wretched nation! Unhappy Argentina! Her voice was all but
dumb, failing in the depths of that abyss!...

“The bonds of that debt were quoted on the London Exchange; but in
time they were quoted no more, for they had at length lost all value;
even their name was erased. A day came, however, when the children of
Argentina’s creditors went to search for their bonds among forgotten
papers; and the bonds were redeemed. For many that was a day of
legitimate surprise; the bearers had offered their paper to their debtors
at any price; but now they were told that they would receive its written
value. It was enough for them that they should be paid in future; but
they were told that even the arrears of interest and amortisation should
be arranged by means of new stock, which was known as Deferred Bonds.

“When, among its assets, a nation possesses such a trait in its life as
this——a trait unique in the financial history of the nations——it has the
right to hold its head erect, affirming its honour and its credit.”

Since that date, and during thirty-six years, the country scrupulously
paid the interest on its debt, until the disastrous year of 1890, when,
as a result of the financial and political crisis, the most violent the
country had ever suffered, the payment of the foreign debt began to be
a matter of serious consideration for the Administration. Many schemes
were proposed to help the State tide over that difficult time; but none
of them included the repudiation of the debt. The Government then at the
head of affairs accepted the most onerous of these schemes, because it
was that which was most to the advantage of its creditors.

The arrangement then decided on, known as the _Morituri_ loan, or Morgan
loan, has been the subject of severe criticism; but one thing was not
and will not be debated, namely, the noble and patriotic intention which
inspired the authors of this transaction, and resolved them to safeguard
the worthy traditions of Argentine credit. By respecting their foreign
liabilities they served the truest interests of their country, and
respected also the spirit of the Constitution, which holds that credit,
and foreign credit in particular, should be the great constitutional
resource, placed in the hands of Governments “for the urgent needs of the
nation, or for undertakings of national ability.”

                              CHAPTER III

                          THE DOUBLE CURRENCY

The persistence of the double currency——The history of paper money——
    The origins of the premium on gold, and its almost continual
    increase——The year 1890 and the depreciation of the currency——
    The causes of this depreciation; abuses in the issue of paper,
    caused by a bad financial and administrative policy.

Remedies suggested——Rosa’s law fixing the value of paper money and
    establishing a _Caisse de Conversion_——Opposition to this law——
    Its beneficent effect upon agriculture and stock-raising, which
    had especial need of a stable medium of exchange——Reserve fund
    created with a view to converting paper money; its vicissitudes
    in the past and its present constitution——The present monetary

In the financial history of the nations there are few examples of
countries in which the phenomenon of two standards of currency has
manifested itself so persistently and for so long a period as in the
Argentine Republic. This is one of the gloomiest pages of its past,
on which are recorded all the errors of its rulers, all the abuses of
speculation, and all the faults of administration whose cost the present
generation has been paying since the opening of the twentieth century.

Since the 27th of May 1820, the date on which the Junta of
Representatives authorised a gradual issue of paper money, and another
issue of redeemable and endorsable notes, the latter to be applied to the
payment of debts contracted in the name of all the Provinces during the
previous Administrations; since 1820, we were saying, until the present
time, there have been few years indeed during which the Republic has not
been under the empire of a double currency.[107]

[Footnote 107: In 1820 the issue of paper money was 40,000 piastres per
month, and that of the notes was the same.]

Our paper money, says an Argentine publicist, originated in an issue
of 290,000 piastres by the _Banque d’Escompte_, created in virtue of a
law of the Province of Buenos Ayres, dated the 22nd of June 1822. Four
years later, when on the 20th of January 1826 the Discount Bank was
transformed into the National Bank, the issue amounted to $2,694,856.
When the National Bank was in turn converted into the Mint, eleven
years later——that is, on the 1st of January 1837——the issue had already
amounted to $15,283,540. Seventeen years later, when the Mint was
transformed into the Provincial Bank (1st January 1854), the issue
amounted to $203,915,206. During the twenty-seven years which elapsed
between the creation of this bank and the passing of the monetary law of
1881, the successive issues of National and Provincial Governments had
increased the mass of inconvertible paper to the sum of $882,071,156.

It was then, with gold at 2500 per cent., that the Government began to
recall all this mass of paper, replacing it by another issue, of which
the one piastre notes exchanged against 25, or a piastre’s worth of the
issue which was destined to disappear.

This operation, which at a blow reduced the paper currency to a
twenty-fifth part of its original amount, also brought gold to par.[108]

[Footnote 108: See _Las vicisitudes de nuestra moneda jiduciaria en los
ultimos 65 años_ (1826-1890), by F. Latzina.]

In 1861 the depreciation of paper touched its lowest point: 2483 piastre
notes were given for $100 in gold. The premium was thus 2383 per cent.

But the reader must not take this to be the only surprise that the
history of the double standard has in store; others, still greater,
remain to be told. In 1862 the depreciation was even lower, the premium
reaching 2456 per cent., and 2556 piastre notes being given for $100 in

The premium continued to rule high until 1867, being 2569 per cent. in
1863; 2784 per cent. in 1864, 2597 per cent. in 1865, and 2406 per cent.
in 1866.

We stated just now that the Republic, during a long period of history,
never escaped from the inconveniences of depreciated paper save
practically on two occasions, which were unhappily of only too short
a duration. The first occasion was when Adolfo Alsina was Governor
of the Province of Buenos Ayres. The “Bureau of Bank Exchanges” was
established, its mission being to exchange one piastre in gold against 25
in paper, and _vice versa_. This Bureau was in operation from February
1867 to May 1876, the date of the suspension of metallic conversion.

After this period the value of paper money declined anew. In May 1876
the golden coin was worth 28 piastre notes; in June, 30; in July, 33; in
December, 29.

In 1877 the average value of a golden piastre was 29 piastre notes; that
is, 100 piastres in gold represented 2900 notes; in 1878 the ratio was
3187; in 1879, 3220; in 1880, 3055; in 1881, 2706.

It was at this time that the second exception occurred, marking another
check to the constant depreciation of paper.

In November 1881, under the Presidency of General Roca, Señor Romero
being Minister of Finance, a law was promulgated establishing a
bimetallic standard in the Argentine. The monetary unit was to be the
piastre of gold or of silver; the first weighing 24.9 grains Troy, and
the second 383.8 grains, both being alloys containing nine-tenths of
the pure metal. This law also established the metallic conversion of
depreciated notes.

This operation was a beneficent advance in the economic and financial
system of the country; for by establishing metallic conversion it gave
stability to the legal instrument of monetary transactions, and also
contributed to establish an enviable state of affairs during the years
1883 and 1884, which gave rise to the rosiest hopes for the future. But
by an irony of fate the very Government which had suppressed the double
standard found itself forced to re-establish it in January 1885. It
should be remarked that at this time Señor Romero was no longer Minister
of Finance.

The country being once more abandoned to the miserable system of
inconvertibility, the depreciation of paper began its downward progress,
recalling the too celebrated case of the _assignats_, a case one would
have thought impossible of recurrence in time of peace and among a people
that had suffered no catastrophe for many years.

In June 1885 the premium rose to 50 per cent.; in 1886, it was 39 per
cent.; in 1887, 35 per cent.; in July 1888 53 per cent., finally, in
1889, it proceeded by leaps and bounds; 50 per cent. in January, it was
53 per cent. a month later; in March it was 55 per cent., rising to 120
per cent. in September and October, and 130 per cent. in November and
December, despite the empirical measures of alleviation adopted, amid
violent disputes, by the Minister of Finance.

Thus the Republic entered on the year 1890; a year of grave political
and financial disaster. On the one hand was the revolutionary movement,
prepared by the connivance of part of the army and the navy; on the
other hand, the crushing depreciation of paper, ending in an absolute
catastrophe which affected both public and private fortunes.

In the month of April of that year the premium increased to 215 per
cent.; that is, 100 piastres in gold were equivalent to 315 in paper.
In July, when the revolution broke out, it stood at 217 per cent. In
November the Government which replaced that which had been attacked
by the insurgents prohibited the quotation of gold. Nevertheless, the
premium rose to 225 per cent, and remained at that figure until December.

We must remember that, in spite of the downfall of paper, the economic
vitality of the Republic had suffered no serious blow; no war had broken
out, no international complication had occurred; there was, in short,
no organic cause to which the premium could be attributed. Certainly,
the commercial balance was unfavourable; but that phenomenon has not the
significance generally attributed to it. The true causes of this crushing
state of affairs were exclusively of a financial and administrative
nature. It was the inevitable result of the manner in which paper money
had been issued to serve the needs of the Government, and to feed the
furnace of speculation. One cannot forget that at the end of 1886 the
total issue of paper amounted to $80,251,380; that in less than two years
it was nearly doubled, amounting to $147,503,911; while in 1890 the paper
currency reached the figure of $196,882,500. But this situation, painful
as it was, could not be suddenly changed for the better; other causes of
a like nature were about to intensify it. The new President, who came
into power after the revolutionary outbreak found himself forced, by
various circumstances, to increase the existing circulation of paper.
The new issues amounted to $150,000,000.

As was only to be expected, such an issue on the back of the existing
paper currency, which exceeded $196,000,000, could only produce a
disastrous fall in paper. Its depreciation touched the lowest point in
the history of the Argentine, or of any other country during the second
half of the nineteenth century; the blackboard of the Stock Exchange
showed an exchange value of 464 per cent. or a premium of 364 per cent.,
in the third week of October 1891. This was the record of monetary

After 1892 the monthly quotation of gold, in relation to paper,
oscillated between 359 and 290 in 1893; 433 and 307 in 1894; 377 and 311
in 1895; 352 and 266 in 1896; 317 and 274 in 1897.

We see from these figures that these conditions are abnormal,
extraordinary; and yet, owing to their long duration, they are almost
part of the normal life of the Republic. It is therefore a matter of
interest to study the causes of such phenomena, in order to decide
whether they are inherent in the period of transformation through which
the country is passing, in which case it would be idle to attempt any
reform at present, or whether they can be controlled or checked by the
employment of means counselled by science and confirmed by experience.

According to the judgment of certain persons who have devoted themselves
to the study of economic questions, the causes which, in the Republic,
produce the double standard, are of a permanent character, proper to the
period of formation through which the country is passing. It is even
said that so long as Argentina has not a capital of her own with which
to float herself in the full tide of affairs——such a capital as is the
result of years or centuries of prosperity——so long will she be a debtor
among the nations, and the system of the double currency must continue.

We ourselves are of opinion that the causes which have produced, and
now maintain the inconversion of the fiduciary currency, are of a very
different character to those implied by the above judgment; and that if
we consider the economic state of the country at the moment when the
double standard was established, we shall find that it was in no way
responsible for the phenomenon of depreciated currency. The true cause is
the necessities of the Government; determined either by factors beyond
the range of debate, such, for example, as the eventuality of a foreign
war, or by less justifiable reasons, such as deficits in the budget and
reckless issues of paper. In both cases the printing-presses of the
official banks have been set to work, in order to tide the Government
over a difficult passage, at the risk of vitiating the instrument of
national credit by the efflux of inconvertible paper.

Those interested should read the history of the first issues, exposed in
a masterly manner by Señor Augustin de Vedia, in his work on the National
Bank; they will see that the excessive issue of notes cannot be explained
or justified by the period of economic formation which the country has
passed through. We must search for other causes in order to explain this
long and unfortunate period of inconversion, which lasted, with a few
years’ respite; from 1820 down to 1905.

What, for example, were the reasons which determined the premium on
gold in 1885, under the first Presidency of General Roca? Was it, by
any chance, that any economic calamity fell upon the country? Were
the harvests lost? or was there a foreign war, or even one of those
revolutionary risings so common among the South American nations? Did the
germs of some epidemic invade the country, decimating the population by
disease and poverty? Was there any violent and ruinous fall in the market
prices of Argentine products?

Nothing of the kind befell. The Government itself, in the message in
which it solicited the ratification of the double standard, that “the
national production, the valuation and the degree of culture of the
soil, had consolidated the national credit.” The crops were abundant;
and their prices, in foreign markets, were more than fair. The Republic
was at peace, at home and abroad; thus realising one of the dreams of
the paternal administration which directed its destinies. As for the
public health, it suffered no perceptible eclipse in all the Argentine

It has also been said that the commercial balances were unfavourable to
the Argentine: a country at once a debtor and a centre of immigration.
And it has been asserted, too, that the Republic suffered from a sudden
increase of growth, without having behind it any reserves of accumulated

The affirmation that the depreciation of the currency, and in consequence
the establishment of a double standard, arose from unfavourable
commercial balances, has no scientific basis and is not supported by
precise demonstration.

“None of the countries which have suffered the misfortune of a
depreciated currency have reached that condition purely on account
of adverse balances,” as a Spanish economist, Señor Edouardo Sans y
Escartin, has said with justice. All countries have suffered from this
evil, on account of monetary changes, and the Argentine is only the
latest example. France towards the end of the eighteenth century, England
from 1797 to 1821, Austria and Russia since the beginning of the last
century, the United States from 1862 to 1878, Italy since 1875, Paraguay
since 1870, and the Hispano-American Republics for the last twenty-five
years: all these countries have suffered from monetary perturbations,
some through the abuse of paper money or the excess of the fiduciary
circulation, others through the variations of the relation of gold to
silver. In none of these countries did the crisis take the form of the
consequence of unfavourable commercial balances.

We find, in fact, that it is not the case that economic causes, resulting
either from the formative period the country has traversed, or from its
lack of accumulated capital, have contributed and are still contributing
in the Argentine Republic to prolong the system of inconversion; the
causes are exclusively financial and administrative, as we have already

[Footnote 109: The famous Italian economist, Eteocle Lorini, maintained
in a book which he published in 1902 (_La Republica Argentina e i suoi
maggiori problemi di Economia e di Finanza_). that the Republic has
never possessed money, but only a simple legal tender or instrument of

Having glanced at the circumstances which have determined the state of
monetary inconversion which has afflicted the country ever since it
became a nation, we must now examine the remedies which the public
powers have suggested in the hope of emerging from this detestable state
of affairs.

Every presidency has declared its firm intention of redeeming or reducing
the paper currency in circulation; but none of them has obtained results
that we can really regard as final.

Of all the attempts to terminate the condition of inconvertibility,
to give stability to the currency, and to prepare, in a more or less
proximate future, for the establishment of a sane monetary system, the
most earnest and scientific, and that which had the happiest results, was
that which emanated from the proposal presented to Congress in August
1899 by the ex-Minister of Finance, Señor José-Maria Rosa, which has
since then become law: the present law of the conversion of the fiduciary

The scheme of reform of this eminent statesman was worked out on the
following basis:——

    1. Immediately to fix the rate at which the future conversion would
      be effected, in conformity with the actual and contemporary value
      of the currency. The fixing of a definite rate was necessary
      in order to consolidate the then existing state of affairs, to
      suppress the premium, and to give transactions a positive basis,
      without indefinitely retarding the possibility of conversion; and
      also to prepare for the liquidation of old issues, and to deliver
      the country to some extent from the gigantic burden of its issues.

    2. To form a large metallic fund to guarantee this conversion and to
      make it possible for money to become stable during this period.

    3. To maintain a fixed standard by these two means:——

        (_a_) The creation, in the _Caisse de Conversion_, of a
          bureau operating as an automatic regulator, in conformity
          with the tightness or slackness of money, and according
          to the necessities of the market; thus making elastic the
          paper currency, the circulation of which might increase
          or decrease, on account of the quantity of gold given out
          in exchange.

        (_b_) The intervention of the Bank of the Nation in matters
          of international exchanges.

It was on these lines that the Minister drew up, and Congress adopted, a
law which enacted that the nation should convert, during a fixed period,
at a convenient time, the whole fiduciary circulation into Argentine
gold coinage, at the rate of one paper piastre for 44 centavos of a gold
piastre. This same law ordered the formation of a Conversion Fund, with
resources which it enumerated; and finally it established in the _Caisse
de Conversion_ a bureau for the exchange of paper into gold and _vice
versa_ to all who might apply, at the rate of one paper piastre for .44
of a gold piastre.

Few laws have been so beneficial as this law of monetary conversion was
to the Argentine Republic. The present prosperous economic conditions of
the country are the work of this law; it constitutes the glory of Roca’s
Government, which gave it birth and enjoyed its first fruits.

Yet we must emphasise the fact that this law, so beneficial to the
public, was at the outset repudiated not only by the President, who, to
avoid subscribing to it, forced his Minister to send in his resignation,
but also by the principal organs of the press, at the head of which was
that important journal _La Nacion_, and again by the Professor of Finance
at the University——M. Terry——who was all for conversion on a sliding
scale; that is, for the worst method conceivable, as by maintaining the
condition of instability he would have adjourned the question instead of
solving it. But thanks to the rare energy and the intelligent propaganda
of Señor Rosa, the sole author of the law, effectually supported
by Senator Pellegrini and Señor Tornquist, this important step was
accomplished, despite all the obstacles which barred the way.

In a very short time this law, so strongly opposed before its birth,
produced marvellously beneficial effects upon the economic life of the
Republic. It gave stability to the currency; that is, it endowed the
Argentine with one of the greatest blessings a commercial and productive
nation can enjoy.

To be convinced of this fact it is enough to run the eye over the column
of metallic quotations on the Exchange, published in the “Statistical
Annual of the City of Buenos Ayres.”[110]

[Footnote 110: _Annuaire statistique de la Villa de Buenos Ayres._——The
transactions in metallic values effected on the Buenos Ayres Exchange in
1899 (before the passing of the law), amounted in value to £109,817,116,
or $1,234,579,370 paper, while in 1908 there were none. Any one wishing
to exchange gold for paper or paper for gold to-day, goes to the _Caisse
de Conversion_, where the exchange is effected without any charge.]

This law has killed speculation on exchange values, which before it was
passed had assumed scandalous proportions, and went far to developing
throughout the country that passion for gambling which is even now a
corroding cancer at the heart of the young Republic.[111]

[Footnote 111: As the _Annuaire statistique_ declares, in the course of
the year 1908 no less than £8,160,000 changed hands over the sale and
purchase of lottery tickets and betting on racehorses. This is an evil
that may grow into a national calamity if nothing is done to arrest it;
and we see with pleasure that the Government has stated its intention of
presenting to Congress the draft of a law prohibiting lotteries.]

This law also provided for the formation of a Conversion Fund, which
was a powerful factor——_si vis pacem para bellum_——in the pacific
solution of the old frontier dispute with Chili. This fund amounts
to-day to £5,100,000 deposited in the Bank of the Nation, and would,
without this far-sighted law, have been swallowed up in the whirlpool of
administrative expenses.

Lastly, the law of monetary conversion has been the salvation of
agriculture and stock-raising, the two chief sources of national wealth,
by preventing the too rapid change in the value of paper, which is
a result that deserves to be considered with attention. The law was
promulgated at a time when a large harvest was expected, and when, from
that very cause, the depreciation of paper violently increased, the value
falling from 278 in August 1898 to 206 in December of the same year. It
is certain that at this rate the depreciation would finally have touched
150, to the greater profit of the speculators.

What would have happened had the monetary situation altered so
rapidly? The Argentine agriculturalist or stock-raiser, having paid
all the expenses of production with gold at about 300 per cent., would
have been forced, by reason of the rapid depreciation of paper, to
sell his products at a price which would no longer compensate him
for his increased expenditure. This would inevitably have ruined the
producer——that is, the principal artisan of the national fortune. Far
from opening up new lands with his ploughshare, as hitherto had always
been the case, he would have abandoned the land already under cultivation.

We need not describe the disaster which would have overcome the country
under such conditions as these: the loss of credit both at home and
abroad. The stream of immigration would have been suspended; emigration,
on the contrary, would have increased, taking the form of a veritable
exodus, even of a flight; and each impoverished and disillusioned
emigrant, as he left the Argentine, would have proclaimed that the
country was ruined. As a result the Argentine would have been for years
partially depopulated, or at least deprived of the new recruits which
immigration brings in, and of whom it has such need in order to realise
the value of more virgin territory.

Worse still: once the harvest was sold, at prices which could no longer
be calculated on the basis of the cost, gold, now freed from all
restraint, like a balloon whose mooring is broken, would have resumed
its upward journey. The melancholy spectacle of 1890 and 1891 would
have been repeated; gold would have risen by leaps and bounds, in
contradictory and incalculable rushes, finally to reach the limits that
mean bankruptcy.[112]

[Footnote 112: We remember that gold, which on the 9th of August 1890
stood at 35 per cent. when a new Government came into power, had risen
to 425 per cent. by May 1891, and in October of the same year touched
464 per cent.; the highest premium ever known in the long history of the
double standard during the last half of the nineteenth century. In the
United States during the war of secession, the premium on gold rose to
286 per cent. only (on July the 4th 1864).]

Such are the disastrous results which would have ensued had not the
law of monetary conversion come just in time to restrain the rapid
depreciation of paper, and to give money the stability it must possess
if it is to be the faithful and precise instrument of commercial
transactions, the common measure of all exchanges. Such were the
beneficent results which followed shortly upon the operation of the
law; and we can only regret that it has not always been understood and
applied with sufficient force by those who were responsible for putting
it into practice. The Governments which have followed since then have not
always followed the ideal of economy and scrupulous administration which
should ensure the success of this important reform. None the less, the
Conversion Fund amounts to-day to £5,100,000.

According to the figures for October 1909 the monetary situation of the
country may be summed up as follows:——

The total of notes in circulation amounts to $686,291,704 paper,
equivalent to £60,393,670. The Conversion Fund of £5,100,000 in gold,
added to £34,752,058 on deposit in the _Caisse de Conversion_ and to the
£14,073,515 deposited in the various banks of the capital, forms a total
of £53,925,573. It follows from these eloquent figures that the fiduciary
circulation, notes, nickel, and copper, is guaranteed in Argentina by
an actual value of 65.9 per cent. of its total; the notes alone are
guaranteed by 89 per cent. of gold.

Unquiet spirits from time to time, including the enemies of monetary
reform, announce their opinion in the press that this law should be
modified. Quite lately the well-known journal _La Nacion_, which is
distinguished by the constancy and fervour with which it attacks this
beneficent measure, has opened its columns to an enquiry, in order to
obtain the opinion of the public, or at least of persons competent in
such matters. Happily common-sense triumphed; the law remains intact,
continuing to benefit the whole national economy.

                               CHAPTER IV

                       THE _CAISSE DE CONVERSION_

The principles on which the establishment of this institution is
    based——The necessity of a rapid redemption of fiduciary money——
    The imperfect success of this programme——New issues of notes——
    New attributes of the _Caisse_ dating from 1899——The exchange
    of paper for gold and _vice versa_——The development of this
    system of exchange——The authority attaching to the _Caisse_.

Among the official institutions which are closely connected with the
issue and redemption of paper money, the _Caisse de Conversion_ demands
a special place, on account of the important part which it plays in
the financial life of the Republic. This establishment was created in
1890, at a moment particularly critical for the credit of the country,
when the terrible crisis occurred which ruined several banks and
resulted in a depreciation of the fiduciary currency which exceeded all
expectation. The Government which presided over the destinies of the
country understood that it was necessary, in order to ameliorate such a
situation, to put some means into practice which should ensure a more
gradual movement of paper, its reduction in no matter what form, and its
future convertibility within a short and definite period, as the message
declared which accompanied the draft of the law submitted to Congress.

In obedience to these excellent principles of financial and banking
policy, it proposed the creation of a Junta or a special Directorate,
“independent in its action, and uniting the necessary faculties for the
recovery, administration, and application of the elements that must be
confided to it for the effectual accomplishment of its important mission.”

An “important mission” it was indeed that was confided to the Junta by
law; for this body was to see the gradual conversion and redemption of
paper money, supervise the strict execution of all the laws relating to
paper money, and oversee all issues of the same.

With the object of effecting, sooner or later, the actual and effective
conversion of paper money, the law created a “Conversion Fund,”
composed of the metallic reserves of the guaranteed banks, the sums for
which these same banks would be debitors on account of the value of
stock bought as guarantees, the public funds issued to guarantee the
bank issues, and all the sums which, in virtue of other legislative
enactments, might be destined to the conversion of bank paper, and
especially those proceeding from economies made out of the general

The Executive attached a special significance to this fund, proposing to
use it to great advantage in the future; if the succeeding Governments
had the wisdom to maintain the elements indispensable to the regular
circulation of the national currency.

These details prove that the fundamental idea at the bottom of the
creation of the _Caisse de Conversion_ was that of effecting, by its
help, and by utilising the resources with which it was endowed, a rapid
redemption of paper money. This intention, moreover, was solemnly
affirmed at home and abroad when the contract was signed with the
English bankers for the issue in 1891 of the loan known as the “Funding
Loan,” amounting to £15,000,000; in virtue of which loan the Government
undertook to withdraw from circulation, during each of the years 1891,
1892, and 1893, $15,000,000 in notes, or $45,000,000 in the three years.

Unhappily the Government’s good intentions had no practical issue; the
_Caisse de Conversion_, from the first moments of its existence, found it
impossible to fulfil its object.

So the proposal to withdraw $15,000,000 a year went no further than a
beautiful ideal; it never took definite shape as a reality. In 1891
$1,696,676 in paper were burned; they came from an additional customs
duty on certain imports. In 1892 $1,463,424, having the same origin, were
disposed of in the same way. Besides this a sum of $3,511,600, provided
by the payments made by the National Bank and the Bank of the Province
of Buenos Ayres on account of $35,116,000 lent them by the Government
in order to help them out of a greatly embarrassed condition, was also
burned. The balance-sheet of receipts and expenditures drawn up every
year by the _Comptabilité Générale_ records only $1,248,032 as burned
in 1891, and $3,586,255 in 1892, or $4,834,287 in two years; a very
different sum to the 30 millions which the Government had promised to

Thus the _Caisse de Conversion_, from which the Minister of Finance
had hoped so much, failed at its birth, and as an institution gave no
positive results. So it was not necessary, as the Minister of Finance,
Señor V. F. Lopez, pleasantly remarked, to await the appreciation of
future Governments.

But this is not all; instead of redeeming the promised quantities of
fiduciary money, the Government which was then directing the destinies
of the country——we must believe that it was compelled by circumstances,
which are so often more potent than the human will——the Government
actually found itself forced to increase the total of paper in
circulation by emitting, for various reasons, further issues of notes.

Dominated by circumstances, it issued in 1890 $35,116,000, in order to
legalise the excess of an issue delivered to the National Bank and the
Bank of the Province of Buenos Ayres. In the course of the same year it
created an issue of 60 millions more, in order to furnish the National
Bank with 25 millions, the National Mortgage Bank with 25 millions,
and the City of Buenos Ayres with 10 millions. In 1891 it issued 50
millions in order to found the Bank of the Argentine Nation, and finally
5 millions more for the Mortgage Bank. In short, urged by necessity, the
Government created $150,000,000 of paper in two years, which on the top
of a previous issue of $161,766,590 in paper was naturally followed by
disastrous results.

The Government which took charge of the administration in 1892 also
manifested, in its programme, its firm intention of increasing the value
of paper money by its gradual redemption; an operation which would,
of course, be the duty of the _Caisse de Conversion_. To this end it
included the necessary sums in the budget, and $865,426 were burned in
1893 and $8,000,394 in 1894. But the results obtained by this measure
were far from responding to the hopes which were founded upon it;
although the Government religiously and with much solemnity, burned on
the 15th of each month a determined sum of paper money——usually half a
million——the value of paper, far from rising, fell further and further
below that of gold.

The Government finally saw that its plan was useless; and hastened to
explain itself by the mouth of its Minister of Finance, who declared that
“the executive power recognises that the withdrawal of eight millions of
piastres per annum cannot fundamentally alter the price of our paper; but
what it does affirm is that this quantity will be sufficient, provided
the production of the country increases, provided that the exports exceed
the imports; that is to say, provided that the international balances are
in favour of the Republic.”

We may say in passing that these two desired factors were realised; but
not the expected advantage, for the Government again made the mistake of
issuing 15 millions of internal stock, bearing interest (£1,320,000),
while at the same time it extinguished another debt, also domestic, which
did not bear interest.

All these details prove in a conclusive fashion that the original and
organic functions of the _Caisse de Conversion_ were inverted from the
time of its creation; converting that institution into a factor of
depression in all that concerned the paper currency, instead of being the
instrument of increasing its value.

After this date the _Caisse_ operated as a secondary and harmless
department of the public Administration; leading an almost forgotten
existence, until the year 1899, when the law of monetary conversion was
passed, which entrusted it with two missions of great importance, which
were destined to exercise a beneficent influence upon the fiduciary
circulation, and therefore upon the economic life of the Republic.

One of these two missions had as its object the establishment of an
office for the exchange of paper into gold and _vice versa_, at the rate
of 2.2727 piastres in paper for 1 piastre in gold. The other consisted
in forming a Conversion Fund, to which more or less important resources
were assigned. This fund amounted in 1902 to £2,400,000 in gold, but at
a moment when an international complication was believed to be imminent
this sum was placed at the disposal of the Government by authorisation of

The Government eventually returned £2,000,000 of this sum, and since
then the fund has constantly increased, amounting in 1907 to £5,100,000,
as we stated when speaking, in the passages relating to the issues of
paper money affected by the _Caisse de Conversion_, of the results of the
application of this new law.

The law to which we are referring was put into execution on the 9th
of December 1899. On that day the first transaction under the new law
was effected; the _Caisse_ received 100 piastres in gold, in exchange
for which it returned the equivalent in notes, in the proportion of 44
centavos of gold to a piastre note. The balance drawn on the 31st of
December showed the existence of £292.6 in gold. At this same date the
fiduciary currency in circulation amounted in all to $295,149,735.

Let us now look into the operations of the _Caisse de Conversion_ after
this date.

During the year 1900 $18,398,449 (£3,679,690) in gold was received; but
as this sum was eventually withdrawn the fiduciary circulation soon
reached its former figure.

In 1901 there was nothing done; that is, the _Caisse_ received no gold.

In 1902 scarcely anything was done; £4209 was received, and £3636 was
paid out, leaving a balance of £573. The operations for 1902 began in
October, during which month the _Caisse_ received £68, 12s.; it paid
out £67, 12s., so that £1 remained. In November the takings increased
to £1497, and the outgoings were £1466, leaving a balance of £31. In
December £2639 were taken and £2102 issued, leaving a balance of £537.

Only in 1903 did the operations of the _Caisse de Conversion_ amount to
anything. The two principal causes of this state of affairs were, firstly
the settlement of the frontier dispute with Chili, a question which had
caused serious alarm, and had resulted in enormous official expenses
during the few previous years; and secondly the size of the commercial
balances. Bearing this in mind, it is not surprising that the amount of
gold in the _Caisse de Conversion_, and, consequently the issues of
paper money, should have commenced to increase and have continued to do
so until they reached the proportions which they have since attained.

In 1903 £9,208,284 in gold was taken, and £1,576,625 paid out; leaving
£7,648,229. The busiest months were April, when £2,519,048 was taken, and
March, when the takings were £1,738,395. The largest outgoings were in
March and July, amounting respectively to £239,133 and £222,104.

In succeeding years the metallic reserve of the _Caisse de Conversion_
has continually increased, thanks to the favourable sense of the economic
balances of the nation’s trade, and the capital which has entered the
Republic, to be employed in the establishment of new industries, or the
creation of railways, tramways, etc.

At the time of writing the metallic reserve of the _Caisse de Conversion_
has lately increased to £34,752,058, which, added to the £5,100,000 of
the Conversion Fund, gives a total of £39,852,058. The proportion of
these reserves to the paper currency in circulation is to-day 65.9 per

According to the law the increase of the metallic balance in the _Caisse
de Conversion_ has inevitably caused, as a natural consequence, the
parallel increase of the issues of notes, nickel, and silver, of which
the amount in circulation increased to $688,177,998 on 31st October 1909,
or $393,028,267 more than on 31st December 1899, the year in which the
law of monetary conversion was voted, and in which the same circulation
amounted to $295,149,731.

The rapidity with which the emission of paper has increased has caused
certain journals, and especially those which have been prominent in
attacking the law of monetary conversion (whose beneficial effects they
were yet powerless to deny) to raise cries of alarm, thinking to see
in this increase a future economic peril, or the seeds of a dangerous
crisis, due to the inflation which, in their judgment, is produced by
such issues. But it is easy to prove that these alarms are not justified
from the moment when such issues are guaranteed by a corresponding
deposit of metallic currency in the _Caisse de Conversion_. Moreover,
a very little reflection will show that one cannot help admitting that
this gold, being the product of the ever-increasing economic balances
of the country, will affect the monetary situation equally if instead of
being in reserve in the _Caisse de Conversion_ it is to be found in the
strong-rooms of private banks.

As we may see from these data, the _Caisse de Conversion_ has completely
changed its _rôle_. It has abandoned its original function, which was
confided to it by the law; namely, the redemption of the fiduciary
currency and the re-establishment of the monetary equilibrium when
destroyed by excessive issues of paper. To-day this institution is merely
a purely mechanical department of the Administration, and its functions
might be fulfilled, at any rate theoretically, by other administrative
departments which are closely connected with it.

                               CHAPTER V

                      THE INVENTORY OF SECURITIES

    represented by movable properties, stocks, bonds, shares, etc.,
    is the only kind of capital which lends itself to statistics——
    The great groups of movable properties: National Funds, Railway
    Shares, Insurance Companies, Foreign Banks, Mortgage Companies,
    and agricultural and industrial undertakings.

The nominal amount of capital represented by movable values——Table
    of the annual revenues of the same, and the sinking fund——
    Division of this revenue among the different countries having
    capital invested in the Argentine.

English capital——The importance of English investments in all
    branches of Argentine activity——The benefits of a reaction in
    favour of Argentine capital——French capital; its small value
    compared to English capital——German capital and its rapid
    increase——Approximate valuation of that portion of revenue
    remaining in the Argentine, and of that which goes to the
    various nations having capital invested in the country.

THE BALANCE-SHEET——The assets are principally composed of
    exportation values; the liabilities, the value of imports——
    The revenue of investments exported to foreign countries, and
    the total of the sums expended by the Argentine abroad——Table
    giving a summarised Balance-sheet and the balance in favour of
    the Argentine——International exchanges and the importation of
    gold confirm this favourable situation——Argentine capital will
    presently play a more important part in the country as compared
    with foreign capital.


The time has come to sum up our conclusions, and we cannot do better than
attempt to present the figures of the movements of the capital invested
in the Argentine, and by stating, as far as possible, its yield. We have
already had occasion to declare that Europe has not turned her attention
to the young South American Republic for sentimental reasons, nor on
account of the beauty of her political institutions nor the splendour of
her landscapes. What interests the general public is the extraction of
the riches of the Argentine soil; the economic and industrial expansion
of the country, and its fitness as a field for investment and original

To respond to this mental attitude we have thought it proper to undertake
a dry and impartial inquiry into the value of the capital invested in the
Argentine, and the total of its yield. Capital represented by movable
values is the only factor which has in some sense an official existence
which is amenable to control; it lends itself to statistics sufficiently
precise to allow of our estimating, from this point of view, the wealth
of a country; and it is consequently in this direction that we may
search for a standard with which to compare the favourable estimates
expressed in our preceding chapters on the subject of the development and
prosperity of the Argentine Republic.

This inventory will lead us to other data, which are equally instructive.
In reviewing the movable values and in estimating their yield we shall at
the same time examine into the general movement of foreign capital and
its earnings, so that we shall be able approximately to state the amount
and the profits of the capital invested by the various European nations
which have dealt with this country.

By the aid of these statistics we shall finally see the situation
of the Argentine, which the results of its foreign trade have shown
us only imperfectly, in its true light. Although the country has an
extremely favourable commercial balance, which in 1908 was not less than
£24,000,000, this sum has to support enormous charges for the payment
of interest on loans placed abroad: the dividends of railway companies,
of banking houses, of all manner of land companies, of commercial and
industrial companies, whose shareholders are abroad, etc. etc. These are
the sums we are trying to determine, in order to draw up as exactly as
possible the balance-sheet of the Argentine.

This chapter will therefore be devoted to estimating on the one hand what
the country owes to foreign capital, and on the other hand what profit
foreign capital draws from its investment in the Argentine. It is to some
extent the current account of Europe and the Argentine that we wish
to present, taking as our basis the movable values, which are the only
serious data upon which we can base our inquiry.[113]

[Footnote 113: In this book we make use of the figures which Señor
Alberto Martinez communicated to the International Statistical Congress,
held in Paris in July 1909.]

The nominal total of Argentine movable values subscribed up to the 21st
December 1908 was £474,396,935 (in gold), of which sum £219,513,399
represents shares, £104,502,163 bonds, and £150,381,572 the public debt
of the Nation, the Provinces, the municipalities, the capital of State
railways, and the capital of the Bank of the Nation.

If we compare these figures with the inventory of the movable values
existing at the end of December 1904, we shall find an increase of
£157,173,555. But if we take account of the fact that in the first
amount the cedulas of the Province of Buenos Ayres figure to the value
of £15,400,000, while in the second they amount to £10,400,000 only (the
amount of shares admitted to conversion by the Government), we see that
the difference is considerably greater.

This increase does not arise exclusively from the new shares issued by
companies created during the last two years; a large proportion is due to
existing companies, which have at last decided to furnish the information
demanded in view of this new inventory. But a certain number of companies
still remain outside the inventory, whose stock would increase the total
by 5 or 6 million pounds.

Here is the list of the stock in circulation on the 31st December 1908:

    _Summary of Securities in Circulation on 31st December 1908,
                      and their Subscribed Capital._

                      SHARES, SECURITIES ETC.     |   Shares.    |  Debentures. |    Bonds.    |   Totals.
  External National Debt     (approximate values) |      ——      |      ——      |  £62,892,428 |  £62,892,428
  Internal National Debt                          |      ——      |      ——      |   16,839,341 |   16,839,341
  External Debt of the Province of Buenos Ayres   |      ——      |      ——      |   11,289,600 |   11,289,600
  Internal Debt of the Province of Buenos Ayres   |      ——      |      ——      |    5,369,760 |    5,369,760
  Internal Debt of the Province of Santa Fé       |      ——      |      ——      |    1,109,074 |    1,109,074
  Internal Debt of the Province of Entre Rios     |      ——      |      ——      |      345,351 |      345,351
  Internal Debt of the Province of Tucuman        |      ——      |      ——      |      195,765 |      195,765
  Municipal Debt of the City of Buenos Ayres      |      ——      |      ——      |    5,078,900 |    5,078,900
  Municipal Debt of the City of Rosario           |      ——      |      ——      |    1,850,000 |    1,850,000
  Municipal Debt of the City of Córdoba           |      ——      |      ——      |      780,000 |      780,000
  Municipal Debt of the City of Santa Fé          |      ——      |      ——      |      236,000 |      236,000
  Municipal Debt of the City of Bahia Blanca      |      ——      |      ——      |      110,000 |      110,000
  National Mortgage Cedulas                       |      ——      |      ——      |   14,779,805 |   14,779,805
  Bank of the Argentine Nation                    |      ——      |      ——      |    9,697,947 |    9,697,947
  State Railways                                  |      ——      |      ——      |   20,000,000 |   20,000,000
  Private Railway Companies                       | £101,587,932 |  £76,735,107 |      ——      |  178,323,039
  Tramway Companies                               |   14,158,644 |    7,230,981 |      ——      |   21,388,625
  National Bank of the Capital                    |   16,145,653 |      289,044 |      ——      |   16,434,697
  Mortgage and Agricultural Loan Companies        |    8,865,866 |    7,788,378 |      ——      |   16,654,244
  Gas and Electric Lighting Companies             |   8,122,166  |    3,455,199 |      ——      |   11,577,365
  Harbours, Docks and Quays                       |   5,276,358  |    5,096,521 |      ——      |   10,372,879
  Anglo-Saxon Banks of the Capital                |   6,332,400  |      ——      |      ——      |    6,332,400
  Agricultural and Stock-raising Companies        |   8,282,978  |      443,058 |      ——      |    8,726,036
  Savings Banks, Building Societies, Annuity      |              |              |              |
    Companies                                     |   7,016,067  |       88,000 |      ——      |    7,104,067
  Forestal Exploitation                           |   5,550,880  |      597,900 |      ——      |    6,148,780
  Mining Exploitation                             |   3,958,663  |      138,354 |      ——      |    4,097,017
  Refrigerator Companies                          |   3,290,135  |      703,780 |      ——      |    3,993,915
  Telegraph Companies (wireless included),        |              |              |              |
    Telephones, etc.                              |   2,431,004  |      302,400 |      ——      |    2,773,404
  National Insurance Companies                    |   2,723,191  |      ——      |      ——      |    2,723,191
  Breweries                                       |   1,780,972  |      352,800 |      ——      |    2,133,772
  Transport Companies (Land and Sea)              |   2,061,187  |      ——      |      ——      |    2,061,187
  Local Provincial Banks                          |   1,832,133  |      ——      |      ——      |    1,832,133
  Sugar Refineries                                |   1,198,456  |      588,368 |      ——      |    1,786,824
  Markets                                         |   1,197,820  |      423,360 |      ——      |    1,621,180
  Dairy Companies                                 |     696,784  |       16,360 |      ——      |      713,144
  Hotels, Theatres, Clubs, etc.                   |     610,381  |      ——      |      ——      |      610,381
  Metallurgical Companies                         |     577,100  |      ——      |      ——      |      577,100
  Flour Mills                                     |     425,340  |       45,158 |      ——      |      470,498
  Various Industrial Companies                    |   7,555,232  |       60,000 |      ——      |    7,610,232
  Various Commercial Companies                    |   3,793,891  |      ——      |      ——      |      ——
                                 Official Totals  | £219,513,639 | £104,502,123 | £150,381,572 | £474,396,935

The largest group of investments is constituted by the capital
represented by the private railway companies, which amounts to
£178,000,000, against £111,600,000 in 1904. This capital increases daily,
and considering the development of the network of railways all over the
country, it is not fantastic to prophesy that in a short time this sum
will reach the figure of perhaps £200,000,000.

The second large group consists of the securities representing the
External National Debt, which on the 31st December 1908 stood at
£62,900,000, or £7,400,000 lower than that of the debt in circulation on
1st July 1905. This diminution arises from the redemption of bonds by
means of the 6 per cent. Funding Loan, of which the total was £5,600,000.

If to the amount of this debt we add the sums represented by the external
debt of certain cities, the internal debt of the nation, and the internal
debt of some of the Provinces, we find that the entire Argentine National
Debt forms a total of £130,000,000. We need not examine at greater
lengths the composition and value of these two groups of securities, as
we have already dealt with them in special chapters.

As for the insurance companies and foreign banks, any estimate of their
capital is difficult; but it is otherwise in the case of the mortgage
companies. The capital which these companies have invested in the
Argentine is now of a nominal value of more than £16,500,000. But this
is only a small portion of the foreign capital invested in mortgages in
the Argentine; for the high interest earned by this class of investment,
which a short time back rose to 10 per cent., has attracted large sums
of foreign money which have been invested privately. Señor Tornquist
estimates the foreign capital thus put out in mortgages at £9,000,000.

We must call attention to the interesting fact that the amount of foreign
capital invested in the agricultural and other rural undertakings of
the Argentine increases day by day. At the end of 1908 this capital
amounted to £8,726,037, of which the greater part was the property
of British subjects, who first devoted their energies to agriculture
and stock-raising in the Argentine a comparatively long time ago. It
is the English who have been the most active agents of the rapid and
extraordinary progress of Argentine stock-raising, especially in all that
relates to the selection of breeds and the best manner of feeding.

Among the industrial undertakings, that which has of late years assumed
the greatest importance is the frozen or chilled-meat industry——the
refrigerating industry. There are now nine refrigerating establishments,
with a subscribed capital of £3,993,915. Other industrial undertakings,
such as sugar factories, breweries, quebracho mills, and mines, are
beginning to take a significant place in the list of Argentine securities.

The nominal total of all movable values being estimated, at the end of
1908, at £474,396,933, the question which now occurs is, What is the
annual yield of these securities? This is the most difficult point of our
inquiry, and one we can answer only by approximate estimates.

While it is simplicity itself to calculate the interest on the bonds of
the public debt, whether external or domestic, it is anything but easy
to calculate in all cases the dividends paid by each company to its
shareholders. Some companies do not publish balance-sheets, and others
confound the profits realised in the Argentine with the profits earned by
their foreign houses or headquarters.

As far as our present knowledge goes, the revenue of the securities we
have mentioned may be estimated to be as follows:——

          _Annual Revenue, of the Securities of the Argentine
                     Republic, 31st December 1908._

        NAME OR NATURE OF SECURITIES.                     Revenue in
                                                          Pounds Sterling.

  External National Debt                                     £3,209,727·2
  Internal National Debt                                        843,879·4
  Municipal Debt of Buenos Ayres                                196,135·4
  Municipal Debt of Santa Fé                                      1,636·0
  Municipal Debt of Rosario                                     120,000·0
  Municipal Debt of Córdoba                                      19,500·0
  Municipal Debt of Bahia Blanca                                  6,600·0
  External Debt of the Province of Buenos Ayres                 368,928·0
  Internal Debt of the Province of Buenos Ayres                 255,904·0
  Cedulas of the National Mortgage Bank                         872,051·6
  Debts of the Provinces of Tucuman and Entre Rios               29,013·4
  Debt of the Province of Santa Fé                               67,745·0
  Railway Companies                                           8,423,510·8
  National Banks of the Capital                               1,131,499·6
  Anglo-Saxon Banks of the Capital                              788,680·8
  Local Provincial Banks                                         53,725·6
  Mortgage and Agricultural Loan Companies                    1,044,847·2
  Tramway Companies                                             907,603·8
  Gas and Electric Companies                                    804,578·2
  Telegraph and Telephone Companies                              97,478·6
  Harbours, Docks and Quays                                     293,447·8
  Savings Banks, Building Societies, Annuity and Insurance
    Companies                                                   254,852·2
  Agricultural and Stock-raising Companies                      496,309·2
  Forestal Exploitation Companies                               188,505·0
  Refrigerating Companies                                       229,654·2
  Markets                                                       165,243·8
  Mining Companies                                               23,816·8
  National Insurance Companies                                  192,040·4
  Sugar Refineries                                              165,154·6
  Breweries                                                     174,249·0
  Dairy Companies                                                31,882·6
  Metallurgical Companies                                        40,605·0
  Transport Companies                                           251,783·2
  Hotel and Theatre Companies                                    59,332·6
  Mills and Granaries                                            33,765·2
  Various Industries                                            169,253·8
  General Commercial Companies                                  141,957·2

Now what, approximately, are the amounts of securities or movable values
belonging to foreigners and to natives of the Argentine? Such is the
question we must now set ourselves, as one of the most important relating
to the country’s future. Blessed with an immense area of territory,
mistress of enormous and unexhausted natural wealth, and peopled by only
6 millions of inhabitants, the Argentine is a nation still in process of
formation. She attracts men and money from all quarters of the globe; for
she promises generous payment for initiative and for labour.

From the economic standpoint, then, it is of enormous importance for the
Argentine whether the revenue of her securities goes to persons residing
in the country, or whether, on the other hand, it goes abroad, thus
unfavourably affecting the result of her commercial transactions, and
threatening to upset the balance of international payments.

In the case of a country which exists under the special conditions which
affect the Argentine, where there are no accumulations of capital, where
the spirit of enterprise is not very highly developed, and where every
commercial or industrial undertaking of any importance has to look to the
outer world for support, the total of the sums which leave the country
each year to pay for imported articles, to meet the interest on the
National Debt, to pay the dividends on the shares of limited companies,
and the profits of private undertakings, the interest on capital out on
loan, whether on mortgage or otherwise secured, and finally to remunerate
capital invested and employed in the thousand different ways peculiar to
this period of rapid intercommunication——the total of all these sums must
be very great; something, indeed, like a metallic river rolling across
the ocean.

So much being granted, the moment has come to present the problem: of the
22 million pounds required to pay the interest on loans, the sinking-fund
charges for their redemption, and the dividends of hundreds of companies,
what is the proportion which each year leaves the Argentine to become
spent or invested abroad, assuring the owners of bonds and shares the
best part of the revenue of a distant country, a country endowed with a
fertile soil, in which industry has a great future awaiting it? And what
proportion of this total remains in the country?

To solve this problem, it would be necessary to follow the track of each
of the shares or bonds issued, in order to discover the destination of
each; and this is what we shall attempt to do, with the help of the
principal banking houses and the great commercial houses in financial
relations with the outer world.

Although all estimates on such a subject must rest upon the slightest
foundations, and cannot be accepted as precise statistics, we do not
hesitate to give a few figures as an indication worthy of credence, being
drawn from the best possible sources.

To proceed with due method, let us begin with the most important
division of the foreign capital invested in the Argentine, namely,
English capital, which was the first to come from abroad to stimulate the
progress of the country. According to an inventory made by the banking
house of Tornquist & Co., which has willingly given us the information
we required, the capital imported from England and invested in Argentine
securities amounts to more than £290,000,000, distributed as follows:——

              _English Capital Invested in the Argentine._

                                                    Capital.       Interest.
  Loans——Governmental, Provincial, Municipal     £63,854,643·8   £3,046,598·2
  Railways                                       166,360,683·2    8,049,431·8
  Banks                                            7,862,400·0      705,096·0
  Agricultural Loans and Mortgages                 6,847,216·6      259,732·2
  Tramways                                        20,284,705·6      875,603·8
  Electricity                                      5,152,590·4      287,685·2
  Agriculture and stock-raising                    4,018,997·8      248,204·8
  Various investments                             14,729,708·8      785,986·4
                                                --------------  -------------
                                                £291,110,946·0  £14,258,338·4
                                                ==============  =============

Thus this sum of £291,110,946 sterling represents an annual revenue of

To continue: in seeking to find the true amount of the economic
international balance, we should have to include in the inventory of
English capital bound to the Argentine by commercial transactions the
large number of steamers which run between British and Argentine ports,
whose value might be represented by a sum not less than £10,000,000.

If this be added to the sum already obtained, we find that the English
capital invested in the Argentine or bound to the country by commercial
ties is not less than £300,000,000: the revenue of which, estimated at
an average of 6 per cent., represents a sum of £18,000,000 per annum,
entirely paid out of the production and the economic forces of the

To test the accuracy of this estimate we may mention that according to
a conscientious study of English capital as placed in the principal
countries of the globe, a study published in 1909 in the _Economist_, the
sums invested in the Argentine amount to £254,000,000: a figure not very
different from that we have already given.

But let us be content for the moment to realise that the known
inventoried revenue on bonds and shares belonging to British companies or
British subjects residing or situated in England amounts to £14,000,000
after the deduction of the portion remaining in the hands of Englishmen
residing in the Argentine; and in the presence of such figures let us
meditate for a moment on the social and economic consequences of such a

English capital, since the dawn of the organisation of Argentina, has
been the great propulsive agent of all national progress. In 1822, when
she was still insignificant both in riches and in population, Argentina
knocked for the first time on the doors of British capitalists, asking
them to lend a million pounds to be used for the construction of a
harbour, for the instalment of waterworks in her capital, and for the
foundation of cities; projects which were never executed; for it was with
this loan as it was to be afterwards with many other Argentine loans.
The funds demanded on credit were not employed to further the object for
which they were solicited. After this first loan all other Argentine
loans were subscribed by British capital.

Moreover, no industrial or commercial undertaking has been established
in this country but it has gone to seek the breath of life in the
financial houses of the City. Professor Eteocle Lorini said with reason,
in commenting on this fact in his book, _Il Debito Publico Argentino_:
“All the industrial, commercial, agricultural and mining companies which
furnish our Argentine statistics bear the foreign mark, _limited_; so
that one ends by getting the impression that one is studying a purely
English colony, for one finds this _limited_ upon all species of
manufactures; _limited_ after the statement of capitals; all undertakings
are _limited_; insurance is _limited_; the circulation and distribution
of Argentine wealth is _limited_.”

Whatever may be the importance of the limited company, it is by no means
to the interest of the Argentine to declare war upon foreign capital;
she should, on the contrary, respect the far-seeing provisions of her
Constitution, which imposes upon Congress the duty of encouraging the
introduction of foreign capital conjointly with a foreign population,
because both are vital elements of the national development and progress.
But while we respect this tradition we feel that the Government should,
in counteraction, endeavour to stimulate the application of Argentine
capital to commercial or industrial enterprises, in order that the entire
resources of the country shall not be developed for the sole profit of
the foreigner.

Professor Lorini, whom we have just quoted, is of the same opinion. “We
are certainly not of those,” he says, “who complain of the introduction
of foreign capital. The more the latter is imported, the more it gives
employment, and increases yet more the wealth and welfare of the country.
But we must also add that as more capital arrives from without, so the
payments which the country has to make for the use of it grow larger,
and for this reason the whole financial policy of the Government and the
Argentine should have as its object the introduction of the severest
economy and the greatest possible thrift; not only that engagements
contracted may be honourably met, but that in course of time we may
form a national capital, capable of competing with foreign capital, of
reducing its pretensions, and even of replacing it little by little,
should the latter, for any reason whatsoever, be compelled to emigrate in
virtue of causes foreign to the economic laws of the country.”

After England France stands in the first rank of those European nations
which have had faith in the future of the Argentine, and have risked the
investment of their capital in this young and wealthy state. Unhappily
the total amount of French capital invested has not been augmented, as
one might have hoped, by the political and commercial ties which for many
years have united the two countries, or by the fertile opportunities
which the Republic has to offer to the activity and enterprising spirit
of the Latin races.

The _nominal_ total of Argentine securities quoted on the Paris Bourse
amounted, on the 31st of December 1907, to the value of £78,999,308,
which sum may be analysed as follows:——

  State funds              £52,332,306
  Banks                     10,335,680
  Transport                 12,802,290
  Mines                        548,978
  Various                    2,980,000

To prevent an erroneous interpretation of the above figures, it should
be stated that this total does not represent the value of the securities
actually held by Frenchmen, but only the securities quoted on the Bourse,
which is a very different matter. For example, the French Bank of the Rio
de la Plata figures in this total to the extent of £2,400,000, the amount
of its capital actually subscribed, although scarcely a quarter of it
circulates in France.

On the other hand there is a very considerable quantity of Argentine
securities belonging to capitalists or investors living in France;
securities which are not quoted on the Bourse and are not deposited in
any bank. We may cite as an example the last loan of £10,000,000, issued
under the title of “Internal Argentine Credit 1909.” Of this amount
£3,400,000 was subscribed in France, yet the bonds of this loan, on
account of a difference with the French Government, have not yet been
quoted on the Paris Bourse.

We are thus justified in concluding that the amount we have given as
representing the value of the stock held by Frenchmen——£78,998,854——is
approximately correct; and that the two factors which affect the matter
in opposite senses may be taken to cancel one another.

We must also note the fact that the majority of Government funds find as
large a market in London as in Paris. For example, the 4 per cent. loan
of 1897-1900, which was entirely issued in London, was only admitted to
quotation on the Bankers’ Exchange of Paris in 1903.

In the banking department, the shares of the Spanish Bank of the Rio de
la Plata and the French Bank of La Plata were only introduced to the
Paris Bourse at the beginning of 1908; the principal market for these
shares is still at Buenos Ayres.

In the transport department, the General Company of the Tramways of
Buenos Ayres, which has a capital of £1,800,000, can only be represented
in France by a very small proportion of this capital; the shares have
been issued principally in Brussels, London and Berlin.

We must remember that French influence in the Argentine has been active
for a long time and in various ways. It was especially the immigration
of the worthy inhabitants of the French Pyrenees which first set in
towards the Rio de la Plata, where the Frenchmen invested their energies
in many remunerative departments of labour; some becoming farmers, some
cattle-breeders, some giving themselves to industrial work, some to trade
in the cities; thus contributing to the development of the wealth of the
country. The French mercantile marine was also the first to establish and
maintain a rapid and easy transport between French and Argentine ports,
thus permanently uniting the two countries.

As for French commerce, it retained, as lately as 1884, a place in the
first rank with regard to the exchange of manufactured articles or the
products of the soil, the trade being carried on especially through
the medium of the Rio da la Plata; indeed there was a time when French
commerce represented 51 per cent. of the total trade of the Argentine,
while now it is responsible for only 20·7 per cent. of the total value of
Argentine imports and exports united.

We may therefore consider that the part played by French capital in
Argentine affairs is much too small as compared to the function of
English capital, and we must regret that France is not more deeply
interested in the great movement towards national prosperity.

After France the European nation which has invested the largest amount
of capital in the Argentine, and which has fully understood the true
importance of the latter country, is Germany.

In the remarkable increase and expansion of her industries Germany has
not forgotten the shores of the Rio de la Plata. She has entered upon a
struggle with England; all her electrical and chemical undertakings have
taken root; factories have sprung up due entirely to German capital; a
German Transatlantic Bank has been established in Buenos Ayres; the
Hamburg South American Company flies its ensign on the ocean, swiftly
carrying passengers and merchandise between the two continents; a German
electrical company has established its power-houses in the Argentine
capital; an extract of meat company is drawing its profits from the
live-stock industry; several quebracho mills have been founded; many
other factories have been established, and the Germans have thus absorbed
a large proportion of the Argentine export trade.[114] The commercial
relations between Germany and the Argentine increase each day. Twenty
years ago the exchanges between the two countries represented hardly 19·4
per cent. of the general foreign trade of the Argentine——at a time when
France possessed 51 per cent. instead of her present 20·7 per cent. of
the trade——while in 1908 the exchanges with Germany amounted to 23·4 per
cent. of the entire trade.

[Footnote 114: In the course of the year 1908 there left Buenos Ayres,
in the vessels of various lines, 10,805 first-class passengers for
Europe, of whom 2750 left by the _German Company of Hamburg_; 2041 by
the _Royal Mail Steam Packet Co._; 1193 by the _Messageries Maritimes_;
791 by the _Transports Maritimes à vapeur_; 711 by the _General Italian
Navigation Co._; 688 by _La Véloce_; 588 by the _Italia_; 556 by the
_Lloyd Sabando_; 377 by the _Lloyd Italiano_; 340 by the _Spanish
Transatlantic_; and the rest by vessels of various less important lines.]

What is the total value of the German capital invested in the Argentine
Republic? It is not easy to say with strict accuracy; but according to
the very authentic information of certain Buenos Ayres bankers we may
reckon that the German capital employed in the banks, commercial houses,
_estancias_, and industrial concerns, and in the German Electrical
Company, the electric tramways, etc., etc., amounts to £40,000,000. If
to this capital we add that represented by the vessels under the German
flag, which maintain an active communication with the Rio de la Plata,
obtaining a large proportion of the best clients, the total of the German
capital employed in the Argentine amounts to some £60,000,000.

With these data in hand, and an approximate knowledge of the amount of
foreign capital invested in this country in shares, bonds, and other
securities, namely some £384,000,000, as well as its approximate revenue,
which in round figures is about £18,000,000, plus £1,600,000 as the
general sinking fund charge, or in all about £19,600,000, we may draw
the following conclusions:——

We know that the revenue of the bonds held by the English capitalists,
including the sinking fund, amounts to £14,158,337. Again, the amount
necessary to pay the interest on the bonds of the National Debt, cedulas,
debentures, and shares held by French, German, and Belgian investors, may
be estimated at £3,698,779; so that of the total revenue of £18,493,896
produced by the Republic, there remains in the country a balance of

                           THE BALANCE-SHEET

Nothing is more difficult than to bring together the constituent elements
of a national balance-sheet, on account of the complexity of the
necessary facts which often escape the net of the statistician. Beginning
with the most important elements of this balance, and, so it seems, the
most plainly visible——those formed by the movement of exports and imports
through the customs——and ending with the most insignificant facts, there
are still a large number of factors for which it is impossible to allow.

Taking a broad view of the matter, we must first of all observe that the
estimates by which we finally decide that that which leaves a country,
whether in merchandise or in specie, is of greater value than that which
enters it, are extremely arbitrary. The principal means of appreciation
is the table drawn up by the Customs Administration upon cargoes leaving
and entering the country, but the results drawn from this table are
inevitably approximate. On the one hand the declarations upon which
the valuations are based are always untrustworthy, as they are made
by individuals who are interested in diminishing the actual values of
their consignments. On the other hand, they are influenced by a thousand
other circumstances which the customs cannot take into account, such as
shipwrecks and unfortunate commercial transactions.

Moreover, merchandise exported is usually valued by the customs at
the moment of leaving the port of embarkation; that is, when it has
so far paid only very small sums for carriage and transportation.
Imported merchandise, on the other hand, is valued at the time of its
disembarkation, in the ports of arrival or destination, when it is
already burdened by all the expenses incident to a long voyage; such as
freight, insurance, brokerage, etc.

It very often follows that in calculating the results of a given
transaction, and in supposing, moreover, that the estimates are perfectly
correct, we often find a perceptible difference between the comparative
figures of exportation and importation, which must be settled (so it
is often supposed) by a payment of cash, whereas in reality the whole
transaction consists of a simple exchange of commercial products.[115]

[Footnote 115: See _Nouveau Dictionnaire d’Economie Politique_, Article
_Balance du Commerce_, by Georges Michel.]

Besides these general causes of error in the calculation of the principal
elements of the Argentine balance-sheet, there are others affecting the
Argentine which we might call local, which arise from the manner in which
the customs estimate the merchandise imported. We have seen that the
Customs Administration bases the collection of duties upon a valuation
tariff, the exaggerations of which have given rise to the liveliest
complaints. As for the statistics of the exports of national produce,
they are based upon the market prices.

As for the foreign capital invested in securities, etc., we know its
value within a fair degree of approximation. But it is quite otherwise
with the large masses of foreign capital employed or invested privately,
whether in mortgages, commercial enterprises, urban or rural properties,
or in a thousand other directions; we know neither the total amount
nor the interest, nor profits which it produces. These profits are a
permanent cause of uncertainty with respect to the establishment of the
national balance-sheet.

Apart from these causes already enumerated there is yet one other
which deserves to be taken into account; it consists of the sums which
Europeans who are established or have become enriched in the Argentine
send each year to their families abroad. We have, unhappily, no means of
estimating the importance of this sum.

Finally, a cause of inaccuracy which is felt at present as it never has
been before, has its rise in the ever-increasing number of natives of the
Argentine who leave their country for Europe, their purses well lined,
and themselves ready to spend their money in superfluities or luxuries,
or in travelling from place to place.

According to the information furnished us by the agents of various
steamship companies, 10,805 first-class passengers left the Argentine for
Europe in 1908, in search of more or less costly amusement.

What will one of these rich South Americans spend abroad? How far do
the mass of them contribute to increase the sum which the country pays
out across the ocean every year? It is difficult to guess; but if we
estimate, as we moderately may, that each of them spends about £1000,
we may add on this count only a sum of £1,080,500 to the debit side of
the Argentine balance. On the other hand, we have not included among the
yearly liabilities the enormous sums which the country pays each year
in ocean freight charges, because in fixing the sale price of exported
products the freight has already been deducted, as well as insurance,
brokerage, commissions, the cost of wharfage, etc., etc. But to give some
idea of the importance of these sums it is enough to say that, according
to estimates worthy of evidence, the Argentine Republic paid in freight,
in the year 1908, for the transport of some 6 million tons of linseed,
wheat, and maize, at the rate of £1 per ton of grain, a sum of about

These figures having been considered, we may now establish as follows the
basis of the economic balance of the Argentine:——

The Credit side is formed in the first place by the value of the exports,
which in 1908 increased to £73,200,000; then by the great and incessant
consignments of capital on the part of already existing companies, or new
ones which are formed to exploit railways, tramways, or other industrial
undertakings, or to undertake the mortgaging of landed property. An
economic journal, much valued in Buenos Ayres, the _Buenos-Aires Handels
Zeitung_, estimates at £8,000,000 the amount of fresh capital which
enters the country each year. The third class of assets is constituted
by the sums brought into the country by immigrants, which are estimated
at £1,800,000. The total of all these sums amounts to the considerable
figure of £83,000,000.

On the Debit side we must first of all place the value of imports, which
in 1908 amounted to £54,600,000, including the large arrivals of railway
and tramway material which the country has not to pay for immediately, as
it obtains them upon long credit; this item is consequently much smaller
in reality than it appears at first sight. Then comes the interest on
the foreign capital invested in the Argentine Republic in bonds of the
National Debt, in railway shares, tramway shares, and various other

We have seen that the revenue of all these securities issued by or in
direct relation with the Argentine Republic amounts to £22,000,000,
and that of this sum £4,300,000 remains in the Argentine; we therefore
conclude that £18,000,000 leaves the country each year as remuneration
for investments.

Then we have also to enter upon the debit side a total of £84,400,000
which “seems to leave the country” each year in payment of the debts
contracted with foreign countries. But in reality this sum is perceptibly
less, for the reasons we have mentioned above, so that we may reduce it
to £80,000,000.

Now, if we place side by side the Debit and Credit of the nation’s
economic balance account, we shall find that in the year 1908 there was a
favourable balance of not less than £3,000,000.

It is undeniable that this favourable balance has in fact been obtained,
not only in 1908 but also in previous years, for there exist two
irrefragable proofs of the fact: the rates of international exchange,
always favourable to the Argentine, and the uninterrupted stream of
metallic currency which flows towards the Rio de la Plata. “The state of
exchange,” as Goschen has said in his work on the subject, “offers us the
means of ascertaining not only the state of the commercial atmosphere, by
indicating the proximity of disturbing currents, but it also indicates
them in such a manner that by interpreting them carefully, we may choose
the line of conduct to be followed in order to steer clear of danger, and
to avoid the precipitate results of panic.”[116]

[Footnote 116: C. I. Goschen, _Theory of Foreign Exchanges_.]

“The attentive observation of exchanges,” says the economist Foville,
confirming by these words the assertion of the expert just cited,
“suffices to indicate to the minds of those competent whether the
monetary stock of a country is in process of increasing, or whether, on
the contrary, there is an escape of currency towards the outer world.
Exchange tells us in which direction bullion is being attracted, at a
given moment, just as the weathercock tells us the direction of the

[Footnote 117: See in the _Bulletin de l’Institut International de
Statistique_, Vol. XV., 1906, p. 200: _Les Eléments de la balance
économique des peuples_, by A. de Foville.]

Now if we examine the table showing the international variations of
exchange during the last five years we shall find that the latter are on
the whole high above par; in December 1906 and January 1907 especially
they attained considerable figures which have never since been surpassed.

As for the importation of bullion and the visible existence of gold
in the country, it will serve our purpose to know that according to
the official figures there was on the 31st of December 1907 a total
of £29,060,000 in the country, which was distributed as follows:
£21,020,000 in the _Caisse de Conversion_, and £8,040,000 in the various
banks, including the Conversion Funds. A year later, on the 31st of
December 1908, these figures attained a total of £34,860,000, of which
£25,340,000 was in the _Caisse_, and £9,520,000 in the various banks.
But in the course of the year 1909 this upward movement has been even
more evident, since the total amount of gold in the Republic on the 1st
of November 1909 was no less than £53,800,000, of which £34,800,000 was
in the _Caisse_ and £19,200,000 in the banks or the Conversion Fund.
It is already therefore certain, if we are to judge by the important
consignments of gold actually on the way to the Argentine, that by the
end of 1909 the Republic will possess metallic funds to the amount of at
least £56,000,000.

We have seen what a part foreign capital has taken in realising the
economic value of the Argentine and the influence it has exerted in
developing the country. It is employed in the greatest variety of ways:
in State loans, railways, and every branch of industry. To it we owe
harbours and railways; that is, the principal factors of economic wealth;
it is foreign capital, invested in navigation companies, which puts the
Argentine in touch with all the nations which consume her products.

However, placing ourselves at the standpoint of the laws of evolution
which preside over the destinies of the nations, we must admit that,
in view of the present prosperity of the country, the intervention of
foreign capital in the affairs of the Republic must daily lessen, in
proportion as a national reserve of capital collects; as has happened
in the United States, and in all states which are in the first rank
of civilisation. But the term of this economic movement is still far
removed, and until the day arrives, foreign capital will in all security
continue to find employment in navigation and in public works, and also
in those nascent industries which are beginning to exploit the mineral
wealth of the Republic.


This volume does not call for a long summary; for we have, we believe,
in the course of our enquiry, thrown sufficient light upon the
characteristic aspects of the situation of the Argentine to enable the
reader to judge of the place it now holds in the world-market among the
great producing nations. But what does remain for us to do is to sum up
in broad touches the fundamental progress realised in the last few years;
a degree of progress to which the country is indebted for its modern
prosperity, and which bears the seeds of its future development.

Firstly, to deal with the matter of international politics, we must
remember the solution of the frontier dispute with Chili, which for
more than fifty years was a cause of alarm as well as of expense, and
which had threatened to become embittered to the extent of arresting the
stream of European immigration and European capital so necessary for the
improvement of the Argentine soil. The example afforded by these two
Republics of South America, which of their own initiative had recourse to
arbitration, rather than finally settle their difference by a resort to
arms, and then pledged one another to delete gradually from their budgets
the unfruitful item of military expenditure, surely indicates that a new
spirit is awake in the Argentine, and that she looks to pursue her future
destinies along the paths of peace and industry.

In the matter of economics the capital fact consists in the enormous
expansion of the two fundamental industries of the country——agriculture
and stock-raising. To measure the ground covered, it is enough to mention
that in 1900 the total value of the products of stock-raising was only
£12,200,000, while in 1904 this value had increased to £21,000,000,
and in 1908 to £22,200,000. It has been the same with the products
of agriculture; in nine years their export value has increased from
£14,600,000 to £48,000,000.

Under the stimulus of this progress an intense vitality has manifested
itself in every department of national activity; the power of
consumption of the Argentine, as measured by the statistics of
importation, has largely increased; property has in many places attained
ten times its former value; commercial transactions of every kind have
increased; and new industries, such, for instance, as the refrigerative
industry, have been created and are prospering. It is therefore
evident that the dominant characteristic of the present situation of
the Argentine from the economic point of view must be sought in the
remarkable expansion of all the forces of production.

The most eloquent proof of this economic prosperity has just been
furnished by the late census of agricultural and pastoral enterprises,
effected in 1908 by Señor Martinez. The total value of these
undertakings, representing the better part of the national wealth,
attains, as the table on the following page will show, the figure of

Now, to speak of financial matters, there is a third factor, which came
very opportunely to consolidate the results of the wonderful expansion we
have spoken of——the law of monetary conversion. While it was laying the
foundations of the future conversion of the fiduciary circulation, this
law created a reserve fund to make it presently practicable, and so gave
stability to the instrument of exchanges; suppressing the gold premium,
so prejudicial to business, and supporting the prosperity of the country
by a fixed and common-sense currency; a support which the country needed
in order that it might develop without checks and shocks, but one it had
hitherto lacked. No measure has contributed more than this to the relief
and improvement of Argentine credit, and to the increased value of the
public funds, which will before long result in the work of financial

The results of this happy conjunction of political, economic, and
financial facts were not long to seek; for in less than five years the
Argentine passed from a state of chronic crisis to the fullest prosperity
known since her existence as a nation. But to preserve all the benefits
of the progress accomplished the young Republic has still one task to
fulfil: to fortify domestic peace, to perfect her political system, and
to improve her principles of administration; conditions indispensable
to the assured and normal development of the country and its future

     _The Total Value of the Agricultural and Pastoral Farms
               and Estates of the Argentine Republic_[118]
         _(According to the Agricultural Census of May 1908)._

[Footnote 118: The details are in round figures, the totals official.]

               | Length of  |                  VALUES IN POUNDS STERLING.
  PROVINCES AND| Iron Wire  |------------+------------+------------+------------+------------
   TERRITORIES | Fencing    |            |            |            |  Machines  |
               |(in Miles). |   Soil.    |  Animals.  |Fixed Plant.| and Tools. |Total Value.
  Buenos Ayres |  224,500   |£326,314,000| £65,803,000|£22,599,000 | £7,317,000 |£422,033,000
  Santa Fé     |   68,800   |  92,986,000|  11,714,000|  6,134,000 |  3,182,000 | 114,016,000
  Entre Rios   |   49,600   |  24,483,000|  10,550,000|  3,686,000 |  1,179,000 |  39,898,000
  Corrientès   |   40,600   |   3,190,000|   7,950,000|  1,513,000 |    230,300 |  12,883,300
  Córdoba      |   73,800   |  38,306,000|  10,128,000|  5,934,000 |  2,419,000 |  57,837,000
  San Luis     |   14,000   |   6,047,000|   2,119,700|  1,270,000 |    202,000 |   9,638,900
  Santiago     |    5,560   |   4,472,000|   2,128,000|    891,000 |    144,000 |   7,635,000
  Tucuman      |    9,480   |   4,457,000|   1,501,000|  2,115,000 |    192,000 |  13,265,000
  Mendoza      |    5,100   |  40,045,000|   1,257,000|  2,352,000 |    230,000 |  43,844,000
  San Juan     |    3,160   |   3,462,000|     411,000|  1,602,000 |    126,000 |   5,601,000
  La Rioja     |      716   |   3,170,000|   1,061,000|    809,000 |     36,190 |   5,076,190
  Catamarca    |    1,830   |   3,223,000|     795,000|  1,348,000 |     26,000 |   5,392,000
  Salta        |    3,600   |   3,024,000|   1,756,000|    762,000 |     78,650 |   5,620,650
  Jujuy        |    1,460   |     200,000|     577,000|    241,800 |     19,600 |   1,038,400
  Chaco        |    1,680   |     726,000|     669,000|    155,700 |     37,800 |   1,388,500
  Chubut       |    2,260   |     656,000|   1,642,000|    334,000 |     61,070 |   2,643,070
  Formosa      |      360   |     351,000|     556,000|    134,000 |     15,000 |   1,056,000
  La Pampa     |  113,430   |  10,908,000|   3,693,000|  1,382,000 |    542,000 |  17,525,000
  Los Andes    |      211   |        ——  |      36,900|     35,200 |       ——   |      71,900
  Misionès     |    2,240   |     635,000|     216,000|    233,000 |     22,800 |   1,106,800
  Neuquen      |      398   |     819,000|     887,000|    189,000 |     35,490 |   1,930,490
  Rio Negro    |   10,520   |   2,739,000|   2,440,000|    863,000 |    168,000 |   6,210,000
  Santa Cruz   |    6,560   |   1,003,000|     890,000|    598,000 |     32,600 |   2,523,600
  Tierra del   |            |            |            |            |            |
    Fuego      |    2,700   |     125,000|     460,000|    269,000 |     21,700 |     875,700
               |  642,065   |£571,563,430|£130,179,700|£55,477,500 |£16,321,270 |£773,541,930

[Illustration: MAP OF ARGENTINA AND ADJOINING STATES. [Transcriber’s
Note: Our apologies for the poor quality.]]


  Agriculture, peculiarity of production, 109 (125-153);
    principal regions, 125;
    chief crops, 126;
    size of holdings, 127-9;
    land agencies, 130-1;
    usual land tenure, 132;
    dependent on railways, 132;
    produce (tables), 135, 136, 137 (table);
    increase of sown lands, 139;
    statistics of area (table), 140-1;
    profits of (tables), 147-151;
    wheat, 154-161;
    agricultural exports (table), 227:
    total value of agricultural and pastoral holdings, 372

  =Agricultural census=, _see_ Census

  =Agricultural industries=, _see_ Industries

  Agricultural machinery, _see_ Machinery

  America, _see_ United States

  Andes, climate of, 73

  Area, of Argentine, 72;
    cultivable, 76

  Argentine nationality, the, 59-68

  =Argentine Republic=, the position of, 71;
    boundaries, 71;
    area, 72;
    climate, 72-4;
    soil, 74-6;
    scourge of locusts, 77;
    rivers, 77;
    almost a desert nation, 115;
    production of wheat in, 154-161;
    foreign trade, 211-234

  Austria, trade with, 226

  Bahia Blanca, port of, 89-90

  =Balance-Sheet, the, of the Argentine=, (349-372);
    securities in circulation (table), 352;
    revenue of same (table), 355-356;
    interest paid on foreign capital, 357;
    table of English capital, 358;
    of French, 361;
    German, 363;
    favourable balance, 367;
    total value of farms and estates, 372

  =Banks=, (261-278);
    balance-sheets of, 264-268;
    nature of business, 266-70;
    clearing-house, 270;
    balance-sheet of the bank of the Province of Buenos Ayres, 271;
    _see_ Mortgage Banks

  Bank of the Nation, the, 270;
    balance-sheets, 272

  Belgium, trade with the Argentine, 219-225

  Boundaries of the Republic, 71

  =Bourse=, the (278-286);
    extent of operations, 280-1;
    organisation of, 276;
    regulations, 283;
    table of operations, 283-4;
    value of securities quoted, 284

  Brazil, trade with the Argentine, 219, 225

  Breweries, 242 (table), 243

  Budget, the (295-309);
    amounts of, 296;
    cause of excessive budgets, 299-304;
    composition of, 305

  =Buenos Ayres=, 83;
    harbours of, 81;
    market of, with statistics (table), 84-5;
    port, inward and outward trade of, 85 (table);
    importance as a port, 86.

  Buenos Ayres, province of, 142

  Bullion, imports and exports of (table), 218

  Butter, exports of (table), 241-2

  Canada, wheat production, 160-1;
    immigration policy, 161

  =Capital=, foreign, invested in the Argentine, 351;
    English, 358;
    French, 301;
    German, 303

  Cattle, numbers of (table), 211

  =Census=, agricultural, of 1905, 127;
    of 1908, 128;
    of 1888, 134;
    of stock of years 1888, 1895 and 1908, 169;
    of 1908, 171;
    of cattle, 1895 and 1908, 172;
    1895 and 1908, 241-2;
    of land, 1908, 372

  =Cereals=, congestion of, on railways, 109;
    shipping of, 110;
    warehoused at railway stations, 112;
    where grown, 126;
    area under, 142-4

  =Colonisation=, commencement of, 116;
    comparative failure of policy, 117, 121

  Colonising agencies, 131

  =Commerce=, _see_ Foreign Trade;
    commercial balance (table), 212, 232-4

  =Companies=, _see_ Limited Companies

  Concessions, harbour, 88;
    railway, 99

  _Conversion, Caisse de_ (342-348);
    conversion fund, 313;
    failure at first, 313-5;
    operation under new laws, 347;
    metallic reserve of, 347;
    present functions of, 318

  Córdoba, 142-4

  Cotton, 199-201;
    profits, 200

  =Currency=, the double (330-341);
    origin of, 330-1;
    depreciation of paper, 331-2;
    bimetallic standard established and suppressed, 332;
    gold premium, 332-3;
    excessive issues of paper, 334;
    law of conversion, 337;
    speculation in exchange killed by, 339;
    monetary situation of the country, 341.
    _See Caisse de Conversion_

  Dairy industry, 240 (table), 241, 242

  Electric lighting, 257

  Electrical industry, the, 256;
    tramways, 256; (table), 257

  =England=, wheat imported by, from Canada, 161

  Estancias, model, 163-167

  =Exchange=, _see_ Double Currency

  =Exports=, _see_ Trade. Tables of, 160;
    of wheat, 159;
    of general, 213, 221;
    of meat, 239;
    of butter, 241

  Finance, _see_ Balance-Sheet of the Argentine.

  =Financial crisis=, the, 289-291

  Fisheries, 248

  Flour exports, 237

  Foreign trade (211-234)

  =France=, trade with the Argentine, 219, 224;
    French tariffs highly unfavourable to the Argentine, 223;
    decadence of trade, 223-4, 229

  Fruit-farming, 202, 207

  Germany, trade with the Argentine, 219, 222

  =Great Britain=, trade with the Argentine, 219, 222

  Harbours, _see_ also Ports, development of, 83

  Immigration, (113-121);
    supremely needed, 114;
    paradise of, 115;
    statistics of, 118-9;
    statistics of (table), 120;
    difficulty experienced by immigrants who wish to buy land, 121;
    mistaken policy, 121;
    in Canada, 161

  =Imports=, _see_ Trade and Tables of, 219, 226

  =Industries, Agricultural= (187-207);
    sugar-planting and making, 187-192;
    profits (table), 189;
    vine-growing and wine-making (table), 192-195;
    tobacco-planting, 195;
    acres planted (table), 196;
    cultivation of the mulberry and sericulture, 196-7;
    the maté industry, 197-8;
    imports (table), 198;
    cotton-planting, 199-201;
    where grown, 199;
    profits, 200;
    oil, 201;
    rubber, 201;
    fruit-growing, 202-207

  =Industries= (235-249);
    dependent on agriculture and stock-raising, 235;
    sugar factories, 236-7;
    flour-milling, 237;
    refrigerating industry, 238;
    (table), 239;
    dairy industry, 240; (table), 241-2;
    breweries, 242; (table), 243;
    weaving, 244;
    tanning, 244;
    the quebracho industry, 244-248;
    timber, 248;
    fisheries, 248;
    mining, 251-5;
    electrical, 256; (table), 257;
    electric lighting, 257; (tables), 258-9

  Italy, trade with the Argentine, 219, 226

  Japan, trade with, 230-1

  Labour, great opportunities of, 115

  =Land=, vicious system of ownership, 118;
    prevents colonisation, 121;
    average size of holdings, 127-9;
    national possessions and enormous private holdings, 129;
    land law of 1907, 130;
    system of tenure, 132;
    agencies, 131;
    auctions, 131-3;
    areas in cultivation, 134;
    rise in value, 139;
    values of, and sales, 174-185

  =Limited Companies= (286-292);
    constitution of, 286-8;
    the crisis of 1890, 289-291;
    table of capital invested in, 291

  Linseed, profits of, 150

  Locusts, 77

  Lucerne, 137-8;
    use of in stock-raising, 162;
    affects value of soil, 174

  Machinery, agricultural (table), 144-5;
    tables, 146, 148

  Markets, Buenos Ayres (table), 84

  Maté, 197-8;
    where gathered, 197;
    imports, 198

  _Métayage_, 133, 138

  =Mines= (250-5);
    gold, silver, copper, coal, antimony, sulphur, etc., 253-4;
    mining laws, 255

  =Mortgage Banks=, 275-278

  Mulberry, cultivation and use of, 196-7

  National debt, the (312-329);
    tabulated amount of, 312;
    first loans, 314;
    further loans, 315-321;
    table of internal debt, 322;
    total debt, 323;
    interest on, 324

  Nationality, the Argentine, 59-68

  Pampa, the, 75, 144;
    production of wheat per acre, 157

  Pampero, the, 73

  Parana, Rio, the, 79;
    navigable value and dredging of, 80-1;
    ports on the, 82, 88-9

  Plata, La, port of, 86

  Plata, Rio de la, 79

  =Plate, river=, _see_ =Plata=

  =Population=, density of (table), 113-4; 117

  =Ports=, 82;
    statistics of (table), 83;
    on the Parana, 82;
    Buenos Ayres, trade of (table), 85;
    _see_ =Plata=, 86;
    Bahia Blanca, 89

  Property, large private, 129

  Provinces, population of, 113-4;
    produce of, 137

  Quebracho wood, effect on value of land, 74-5;
    the quebracho industry, 244-248

  Railways (91-112);
    mileage of (table), 93;
    general statistics (table), 94;
    comfort and equipment, 95;
    statistics (table), 96-7;
    revenues of, 98;
    administration and tariffs (table), 98-9;
    cost of, 99;
    concessions, 99;
    guarantees, 99;
    mileage, 100-1;
    comparative mileage (table), 102;
    projected lines, 103-4;
    Government policy, 104;
    future development, 106;
    celebrated aerial railway, 107;
    indispensable auxiliary of production, 108;
    congestion of traffic, 109;
    mileage and capacity of cars (table), 111;
    warehousing by, 112

  Rainfall, 73

  Refrigerating industry, 238;
    (table), 239

  Revenue, 305-310

  =Rivers=, 77-82

  =Rosario=, capacity as port, 80-81;
    second port of Argentine, 87-8

  =Rubber=, 201-2

  Santa Fé, 142-3

  Seasons, 72

  Sericulture, 196-7

  Shipping, 110

  South Africa, trade with, 225

  Spain, trade with the Argentine, 219

  =Stock Exchange=, the, _see_ Bourse

  =Stock-raising=, (162-173), 125;
    where followed, 127;
    probable decay of old large estancias, 130;
    industry undergoing modification, 162;
    use of lucerne in, 162;
    account of model establishments, 163-167;
    breeds of horses, 163;
    cattle, 163;
    sheep, 164, etc., _seq._;
    importation of pedigree animals, 168;
    statistics (tables), 169, 171, 172, 173;
    value of stock (tables), 172, 173

  =Sugar= (187-192);
    where grown, 187-8;
    profits (table), 189;
    size of harvests, 191;
    bounties, 195, 236-7

  Tanning, 244

  =Tariffs=, 215-217

  =Taxes=, direct and indirect, 305-308

  Telegraphs, 257

  Telephones, 258

  Temperature, 72

  Territories, national, population of, 113-4 (table);
    private property in, 129

  Textile industries, 244

  Timber trade, 248

  Tobacco, 195-196

  =Trade=, foreign (211-234);
    exports and imports (table), 213;
    excess of exports (table), 214;
    metallic imports (table), 218;
    imports with countries of origin (table), 218;
    Imports (table), 220;
    exports (table), 221;
    commercial balance, 232-4;
    _see_ industries (234-249);
    in chilled or frozen meat (table), 239;
    value of exports, 326

  Trade, _see_ Industries

  Traffic, through ports (table), 83;
    railways, 89-112;
    shipping, 110

  Tramways, horse and electric, 256;
   (table), 257

  United States, wheat, production of (table), 158;
    exportation of (table), 159;
    trade with the Argentine, 219, 229

  Uruguay River, 79

  Valuation of Soil (174-186), _see_ Land Vines, 127 (192-5);
    where grown, 192

  Whaling, 248

  =Wheat= (154-161);
    statistics of, 136,137 (table);
    profits of growing (tables), 148-9;
    production of (tables), 154-5;
    production per acre, 157;
    production in U.S.A. (table), 158;
    yield per acre in, 158;
    exportation of (table), 159;
    exportation from Argentine and India (table), 160;
    in Canada, 160-1

  =Wine=, 193;
    imports of, 193;
    consumption of, 193-4;
    production of (table), 194;
    capital, 195

                       LIST OF TABULAR STATISTICS


  Traffic passing through Argentine ports, 1907-8                       83
  Produce entering Buenos Ayres market, 1905-8                          85
  Inward and outward trade of port of Buenos Ayres                      85
  Railways, mileage of                                                  93
  Railways, general statistics of                                       94
  Railways, gauge, mileage and dividends                              96-7
  Railways, freight, cost of                                            99
  Railways, mileage of, comparative                                    102
  Railways, rolling stock and its capacity                             111
  Population of Provinces and Territories                            113-4
  Immigration and emigration, 1904-8                                   120
  Immigration 1897-1908                                                120
  Progress of cereal production, 1888-1905                             135
  Production of cereals, per province                                  137
  Area of land under cultivation in five regions                       141
  Imports of agricultural machinery                                    146
  Agricultural machinery required by farmer cultivating 250
    acres of wheat                                                     148
  Approximate expenses and profits of the same                         149
  Wheat, the world’s production, 1894-1907                             154
  Wheat, distribution of crops, 1894-1907                              155
  Wheat, produced in the United States, 1877-1907                      158
  Wheat, exported from the United States, 1879-1902                    159
  Wheat, Argentine and Indian exportation compared                     160
  Census, cattle, etc., according to, 1888, 1895, 1908                 169
  Census, number of different animals according to                     171
  Cattle, analytical statistics of, 1908                               171
  Cattle, horses, etc., values of, 1895, 1908                          172
  Cattle, horses, etc., table of national and comparative
    possessions                                                        172
  Cattle, horses, etc., table of national and comparative values       173
  Sugar-cane, outgoings and receipts on 12 acres                       189
  Wine, national and comparative production of                         195
  Tobacco, area planted with, 1895, 1907                               196
  Maté, importation of                                                 198
  Trade: exports, imports, population and commercial
    balance, 1861-1908                                                 213
  Trade: exports, excess of                                            214
  Trade: exports and imports of bullion                                218
  Imports and countries of origin, 1906-1909                           218
  Imports analysis of, 1906-1909                                       220
  Exports, destination of, 1906-1909                                   221
  Exports, increase of various branches, 1906-1909                     227
  Exports, of meat, chilled and frozen                                 229
  Exports, of butter                                                 241-2
  Breweries, consumption and production, 1902-1907                     243
  Tramways, horse and electric, of Buenos Ayres,
    increase of takings, 1901-1908                                     257
  Factories, statistics of                                             258
  Industries, various                                                  259
  Banks, accounts of principal                                         264
  Banks, statistics of                                                 268
  Bank of the Nation, accounts of, 1904-1908                           272
  Bank of the Province of Buenos Ayres, accounts of, 1906-1908         274
  Banks, mortgage, capital of                                          277
  Bourse, operations of, 1895-1908                                   283-4
  Bourse, value of securities quoted on                                284
  Companies, floated in 1905-8, capital of                             291
  Debt, national or public, 1909                                       312
  Debt, internal, 1909                                                 322
  Debt, external and internal                                          323
  Debt, interest on                                                    324
  Securities, summary of Argentine and capital, represented by       352-3
  Securities, revenue of Argentine                                   355-6
  Capital, English, invested in Argentine                              358
  Capital, French, invested in Argentine                               361
  Agricultural and pastoral property, total value of, 1908             372

       *       *       *       *       *


       *       *       *       *       *

                        TRANSCRIBER’S AMENDMENTS

Transcriber’s Note:

Blank pages have been deleted.

Footnotes have been moved so as to follow the referencing paragraph.

Paragraph formatting has been made consistent.

The publisher’s inadvertent omissions of important punctuation have been

Some table headings have been replaced with keys and a key table. Some
table ditto marks have been replaced with the words represented.

Repetitious front matter has been removed.

The following list indicates any additional changes made. The page number
represents that of the original publication and applies in this etext
except for footnotes and illustrations since they may have been moved.

  Key: {}[]:

    Page          Change

    xix  The four Provinces of Buenos Ayres, Santa Fé, {Cordoba}[Córdoba],
   xxvi  direct observation, and {hard-and-fas}[hard-and-fast] figures,
  xxvii  throne was transferred to {Cordoba}[Córdoba].
  xxvii  and founded {Corrientes}[Corrientès] in 1588.
     78  Territories of Chaco and {Misiones}[Misionès].
     94  {27,692,293}[ 2,769,293]
     96  Private Companies ({Concessionnaires}[Concessionaires]).
     97  Railways of the {Entre prin}[Entreprise]
    100  it had been {enable}[unable] to keep.
    137  {Còrdoba}[Córdoba]
    142  General Villegas, Trenque {Leuquen}[Lauquen], and others,
    161  thanks to a {concatination}[concatenation] of favourable
    163  stock-breeders have driven back the {Guacho}[Gaucho]
    164  an establishment known as _La {Martina}[Martona]_,
    165  overlooking the majestic Parana de {les}[las] Palmas,
    165  fox-terriers, {Brahmah}[Brahma] fowls, Catalans, Dorkings,
    167  warmed by steam {calorifers}[calorifier].
    173  it is worth less in the Argentine than {i}[in] the States
    177  payable half upon purchase and {hal}[half] at the end
    197  carved, often by {Guachos}[Gauchos] or Indians.
    200  Investigaciones {algodeneras}[algodoneras] en los territorios
    212  which is the {firs}[first] year included
    232  See _Memoria del {Departemento}[Departamento] de Hacienda_
    259  £28,421,318  £47,032,146    118,315    {105,57}[105,575]
    286  progressive movement which {increase}[increases] in force
    303  where {bureauracy}[bureaucracy] is regarded as a calamity
    323  the latter will inherit as {thing}[things] are.
    372  {Còrdoba}[Córdoba]      |   73,800
    372  {Catamarea}[Catamarca]    |    1,830
    373  balance-sheets of, {265}[264]-268;

       *       *       *       *       *

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