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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, Laa
Talmas 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



FOREIGN TRADE 227

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.
Products of Stock-raising £24,827,397
Agriculture* 31,530,938

Forestal products 1,184,372

Various 908,168



1907.


1908.


(1st six months)


£24,70.4,041


£23,02.^601


£16,213,533


32,818,324


48,335,432


32,986,430


1,068,471


1,269,447


704,772


590,037


272,497


359,952



Totals .. £58,450,875 £59,240,873 £72,921,067 £50,354,687

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 oflf 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 incrcixsed by 800 per cent. ; fodder, by 80 per cent. ; linseed,
by 70,000 per cent.; flour more than 600 per cent.t These
figures show how rapid the growth of the Argentine has
been, and what progress has been realised in spite of temporary
crises.

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. Importa-
tion 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.

* The agricultural exports for 1906 were sensibly lower than those of
1905, on account of a decrease of £3,864,392 in the exports of wheat,
t Latzina, work already cited, p. 511 .



228 THE ARGENTINE IN THE 20th CENTURY

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.*

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 oflScial negotiations have
already been opened, with the object of affording the
Argentine certain facilities in the introduction of her chilled

♦ One may with proflt consult a notable report on La clause de la nation la plus
favorisie.Sy preBented to the Minister of Agriculture by the Divisional Chief,
Richard Pillado.



FOREIGN TRADE 229

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 ci)ncerned,
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 evolu-
tion 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 equip-
ment 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



230 THE ARGENTINE IN THE 20th CENTURY

the Argentine has bought too dearly the glory of an equip-
ment 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, how-
ever, was supplanted by the factories of the United States,
which supplied them at £2, 8s. per ton. This is an applica-
tion of the new economic process known as dmnping, 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 establishiug 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



FOREIGN TRADE 231

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 arrange-
ment 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 whoso 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 Fe 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,
tiie product of the cane-flelds 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
vintages.



232 THE ARGENTINE IN THE 20th CENTURY

" 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 them-
selves 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." *

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, demand-
ing 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

* See Memoria del Departemento de Hacienda, by T. M. Rosa, 1899, vol. i.,
p. 170.



FOREIGN TRADE 233

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 exporta-
tion 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 irnxy
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



234 THE ARGENTINE IN THE 20th CENTURY

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 pay-
ment 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 aflfect 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 how-
ever 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 contin-
gencies 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 GREAT ARGENTINE INDUSTRIES

/The principal industries of the country are related to agriculture and oattla-

^ breeding.

Sdqar-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.
Rkfrigeration — 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.
Dairt Industries — The large establishments devoting themselves to thesa

industries— Butter ; cheese — Exports of butter; the development of which

the dairy industries are capable.
BRi^WBRies — Chief establishments — 'Production and consumption of boer

during the years 1902-1907 — Suppression of imports of foreign beer.
vSpirits — 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 industry of the Argentine Republic is more or less
-mdependent 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
235



236 THE ARGENTINE IN THE 20th CENTURY

shall therefore have occasion to remark upon the conditions
of their development.

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 culti-
vation 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 Seiior 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.



THE GREAT ARGENTINE INDUSTRIES 237

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 agri-
cultural year 1906-7 was 107,621,800 lb. of refined sugar;
during the year 1907-1908 it was 120,552,220 lb.

i^/oif7'-m'?7^'i'n(jr.— 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



Online LibraryAlberto B MartínezThe Argentine in the twentieth century [microform] → online text (page 20 of 33)