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THE
ARGENTINE IN THE
TWENTIETH CENTURY



THE ARGENTINE in the
TWENTIETH CENTURY

By albert B. MARTINEZ

•:X-UNDER-SECRETARY OF STATE . . AND

MAURICE LEWANDOWSKI, DOCTOR INLAW.



With a Preface by M. EMILE LEVASSEUR, Membre
de rinstitut, 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



BOSTON

SMALL, MAYNARD AND COMPANY

PUBLISHERS



[A// Rights Reserved]



CONTENTS



Author's Note

Author's Preface to thr Third Edition

Preface to the First Edition

Introduction

General Plan and Method of this Book

The Argentine Nationality



PAGE

xiii

XV
XXV

xli
55
59



PART I. •
The Argentine fkom the Economic Standpoint.



I. The Geography of the Argentine

Climate — Son. — 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 raisijig of live-stock — Transformation of
virgin into fertile~land — The Pampa — The cultivable area
— Conditions favourable to production — The plague of
locusts.

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

PoRTB — 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
— Impoi-tance of Buenos Ayres in comparison with the
great ports of the world — The port of La Plata — The j ort
of Rosario ; increase of its trafKc ; construction of the new
harbour conceded to a French company— Bahia Blanca;
its development — The decentralisation of traffic.



II. Railways



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.



•AC.E

71



91



vi CONTENTS

CHAP. PAGE

II. — continued —

Extension of the system in the near future, owing tu ilie
numerous concessions granted — The mileage of these con-
cessions — 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 ob-
tained through default of colonisation — The faulty division
of the public lands — History of immigration in relation to
colonisation — The nationality of immigrants.

PART II.

The Argentine as an Agricultural Country.

I. Agriculture ... ... ... ... ... 125

Natural Conditions — The Constitution of Property — The
three 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 Fe — The Province
of Cdrdoba — The Territory of the Central Pampa.

Agricultural machinery, its importation from abroad, and es-
pecially from the United States.

The Agricultural Yield — The yield of the soil in the different
Provinces — Exceptional results in certain districts — De-
tailed calculation of the yield of a wheat farm — T-
instances of great wealth realised by immigtants to tt
Argentine.



CONTENTS vii

CHAP. ''^"*

II. The Pkoduction of Wheat in the Argentine
compared with the yield of other exportinc
Countries ... ... ... ... 151

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 Argen-
tine 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 stock-raising.

IV. The Value of the Soil ... ... ... 174

Difficulties in estimating this value — Principal factors of valua-
tion — 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 con-
quest from the Indians ; their enormous present value —
The rise of value dates from 1902, and has hitherto con-
tinued 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, Cordoba,
Santa Fe, and the Pampa, with figures indicating the
prices realised in some large recent transactions.

V. Agricultural Industries ... ... ... 187

Sugak-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 — De-
fective preparation.

The Mulberry — The culture of the silk-worm might be estab-
lished in the Argentine, but at present exists only in an
experimental condition.

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

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

Rubber — Existence of rubber plants in the Argentine — An un-
exploited 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.



riii CONTENTS

PART III.

The Argentine from the Commercial and Industrial
Point op View.

:hap. page

I. Foreign Trade ... ... ... ... 211

The important part played by the foreign trade of the Argen-
tine — 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, vdth indica-
tions 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
coimtry — 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 sug.ir
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 Inddstries. — The large establishments devoting them-
selves to these industries — Butter ; cheese — Exports of
butter ; the development of which the dairy industries are
capable.

Breweries. — Chief establishments — Production and consump-
tion of beer during the years 1902-1907— Suppression of
imports of foreign beer.



CONTENTS ix

CHAP. , ""AGK

II. — continued —

Spikits — ^Decreased production of spirits.

Looms, Tanneries. — Weaving and tanning are industries
which at present exist in the Argentine only in a rudi-
mentary condition, despite the conditions which are favour-
able to their development.

QQBBRAaaa3yooD. — The centre of production — Applications —
Companies engaged in the industry — Their results — Value
of the products and the large profits to be expected.
. TiUiiEB..TjiAJDE.— Varieties of timber and hard woods.

Fisheries. — First results of this industry.

III. Mines, Electrical and other Industries ... 250

The Argentine has not entered the industrial age — She has no

coal-mines in operation, no natural motive forces of any

importance.
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.
Elkctrio Industries. — Tramways; their development, their

perfected equipment, and their profits — Progress of electric

lighting — Telegraphs — Telephones.
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.

IV, Banks, the Bourse or Stock Exchange, and

Limited Companies ... ... ... 261

Banks — International character of Argentine banking — Evolu-
tion of banking machinery — List of the principal banks,
with amount of capital and business done — Conditions
peculiar to Argentine banking ; the lack of movable re-
serves — 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 — Diffi-
culty of realising capital — The resumption of payments.

The Bank of the Province of Buenos Ayres — Its reorganisation
— Its present prosperity.

Mortgage and Loan-Banks. — History of the Banqiie Hypothe-
caire of the Province of Buenos Ayres — Bankruptcy —
Arrangement between the bank and its creditors — Proposal
of reorganisation — Laws relating to mortgage in the Argen-
tine—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



X CONTENTS

CHAP. p^Qg

I V. — continued —

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 com-
panies — 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 expendi-
ture — Great and rapid progress since 1891 — InsufiSciency
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 interven-
tion 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 Con-
stitution, 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 ex-
penditure, 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 arrange-
ment—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 propor-
tion 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 efi"orts of the Argentine to improve her credit.



CONTENTS xi

CHAI'. I'AdE

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 deprecia-
tion of the currency — The causes of this depreciation ;
abuses in the issue of paper, caused by a bad financial and
administrative policy.

Reined ies suggested — Rosa's law fixing the value of paper money
and establishing a Caissc 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 Convehsion ... ... ... 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 froiu
1899 — The exchange of paper for gold and vice versa — The
development of this system of exchange — The authority
attaching to the Caisse.

Y. The Balance-sheet of the Argentine according

TO THE Inventory of Securities ... ... 34&

The Inventory of Movable Property or Securities— The
capital 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 sink-
ing fund — Division of this revenue am< mg the different
countries having capital invested in tlie 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 ex-
changes 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

A T the outset of this work our thanks are duo to SeSor
-^ J. Romero, ex-Minister of Finance, who has given us
tlie benefit of his experience for this study of current
Argentine affairs. Seuor Romero is the author of the
monetary law of 1881, and was responsible for the arrange-
ment 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 difiicult 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 consider-



xiv THE ARGENTINE IN THE 20th CENTURY

able 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
EDITION

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 22i millions of acres, while to-day, in the agri-
cultural year of 1908-9, it attains the figure of 35 millions
of acres, representing an increase of nearly 75 J3er 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 Avill give a yield
of, 13,811,000 (metric) tons,* 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, accord-
ing to the prices ruling in 1908, will amount to 1045 millions
of paper piastres, or £92,000,000.

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

• 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,
:i40,000,000. The metric ton is 34-5 lbs. lighter than ihe English,
XV



xvi THE ARGENTINE IN THE 20th CENTURY

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 Fe.

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 Sehor Alberto
B. Martinez, has revealed a wealth whose magnitude surpasses



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