Yet, the explanation of the British preponderance in Argentina's market
could be easily found if only bearing in mind that she made such great investments
in behalf of the economical and industrial development of Argentina, investments
which are represented by the enormous sum of two billions of dollars, with which
we have been able to move our locomotives and street cars, feed our ports, exploit
our forests, cattle and agriculturing enterprises and inject vigorous life, activity
and progress into all our industries, maintaining at the same time the credit of our
Public Treasury with the almost whole British subscription of our foreign public
debt.
A statement formulated the 31st of December, 1908, shows the British capital
in Argentina, as represented by the following figures :
Capital. Interest.
Loans, Government, Provincial, Municipal... $319,273,215 $15,232,990
Railways 831,803,415 40,247,155
Banks 39,312,000 3,525,480
Agricultural loans and mortgages 34,236.080 1,298,660
Tramways 101,423,525 4,378,115
Electricity 25,762,950 1,438,425
Agriculture 20,094,985 1,241,020
Various 73,648,540 3,929,930
Total $1,445,554,710 $71,291,675
The value of maritime interests represented by quite a large number of ships,
as well as the capital invested in other numerous transactions, totals more than
$100,000,000, which should be added.
94 SECOND PAN AMERICAN COMMERCIAL CONFERENCE
Second to England, France is the nation among the European powers which
had faith in the credit and capacity of Argentina and has made investments of
nearly $400,000,000, distributed as follows :
States funds $261,661,530
Banks 51,678,400
Transports 64,011,450
Mines , 2,744,890
Various 14,900,000
Total $394,966,270
Germany was the third till the beginning of the war, her investments being
estimated at nearly $300,000,000, distributed in banks, industrial concerns, electric
companies, electric railways, etc. The above figures correspond to the same date,
December 31, 1908.
Summarizing, the foreign capital which met a most profitable and safe invest-
ment in the Argentine Republic is far above the amount of three billions of dollars,
of which two-thirds are owned by England, while such a small percentage cor-
responds to the United States that it has to be considered under the column of
"others."
Having in view the practical application which characterizes the American
spirit in all orders of human activity, and, according to the facts just set forth
above, I have no doubt that it should be very easy for you to foresee the measures
of a defensive nature that England, France, Italy, etc., shall present in opposition
to you in order to keep for their own benefit the position they had reached after
long years of fruitful perseverance and uninterrupted accumulation of new and
valuable investments and the fruits of their energies.
Nevertheless, that does not mean that your cooperation in the business life of
Argentina should have to face obstruction. On the contrary, the forceful exclusion
of Germany which necessarily has been disastrous to that country and the weaken-
ing of France and Belgium which will bring their sources of production to a very
low level for years to come, will leave open and free the door of an immense field
for yo'ur industries, if you only know how to appreciate the opportunity and meet
the demand of Argentina, affording the same kind consideration, credit, loyalty and
benevolence that the industrial people of Europe have always granted to her.
So it is my opinion that you should not hesitate in pouring out your capital
and labor into the young, flourishing land of Argentina, where institutions, codes
and laws are so very similar to yours ; try to help her by laboring her soil, cooper-
ating in the development of railroads, the irrigation of lands, the building up of
roads, harbors, etc., thereby securing the sale of your merchandise which are to be
transported on your new efficient merchant fleet and the return freight to make the
traffic profitable.
One of your most conspicuous business men, Mr. John C. Claussen, the Vice
President of the Crocker National Bank of San Francisco, when addressing the
Ninth Convention of the Southern Commercial Congress held at New York City,
pointed out that American business men, who have hitherto been reluctant to make
outside investments, probably due to the fact that with the swift and extensive de-
velopment of his country the natural tendency has been to invest his money in local
enterprises and lands. But while it is true that s"uch investments have largely con-
tributed to the agrandizement of his country, it is also true that in proportion of
the growing of its resources there exists the danger that this preference to make
investments on lands may some day cause the prices of these lands to go to the
highest point, and therefore, it is advisable and desirable, Mr. Claussen says, that
the accumulated capital at home should find new open channels for best benefit and
advantage of Americans.
Now then, those channels are open to North American labor and capital
in the beautiful land of Argentina. Its exceptional geographical situation, its vast
and undeveloped meadows and luxuriant woods, healthy climate, wise legislation
and social, commercial and political culture at the same level with the most pros-
perous nations in the world cordially invite your labor and capital to undertake all
kind of activities.
ARGENTINA 95
AMERICAN NEWS AND TRADE IN ARGENTINA
BY ROBERT S. BARRETT, TRADE ADVISER, BUREAU OF FOREIGN AND DOMESTIC COM-
MERCE, FORMERLY COMMERCIAL ATTACHE TO THE AMERICAN EMBASSY
AT BUENOS AIRES.
(Delivered at the Morning Session of Friday, June 6)
Mr. Chairman, Ladies and Gentlemen: There are two striking things in
reference to this subject, one of which has been discussed to some extent today,
but the other has not been touched upon. I remember so strongly it made such
a tremendous impression upon me, the development of American news service in
South America and particularly in the Argentine. You have all heard on many
occasions how American news was slighted by the South American press and
you have been told the .reasons for that, why the South American was more in-
terested in .European news than he was in news from North America because of
the fact that the newspapers of South America were subscribers to European
press service instead of to American press agencies.
That was changed two or three years ago when La Nacion, one of the
great newspapers of Buenos Aires, commenced to receive a direct service from
the United States. On January 1 of this year, the Associated Press went into
South America and now I believe it has some twenty subscribers among the
great daily newspapers of South America, and the United Press has almost an
equal number of subscribers.
The Associated Press, for instance, is sending some three thousand words
a day of press service to the Argentine and most of this is American news of
great interest to our country and to the people in Argentina. Then, at the be-
ginning of the war, our Government established in Buenos Aires a most use-
ful service, a branch of the Committee on Public Information and I want
to say to say to you, ladies and gentlemen, that no department of the United
States Government ever rendered more valuable and important service to this
country during the war than the Committee on Public Information. There were
times when they published in the great daily newspapers of Buenos Aires from
three to four columns every day of live information regarding our developments
in the war, our preparations for the war and our reasons for going into the
war. It was a matter of great regret to me that when the armistice was signed
the work of the Committee on Public Information was discontinued. I hope
the time is coming when some organization will be established by American bus-
iness men who will take up that work of publishing in the great newspapers of
South America supplementary news and information which cannot be carried
by cable.
The Director General has asked me to speak to you for a few moments
this morning on a subject which is somewhat foreign to that under discussion
but which he wished me to bring to your attention, and that is the very great
question which is in the minds of every man, of the export trade in the United
States today. Will the United States hold any considerable portion of this great
export trade which it has gained during the war and will it hold it in Argentina,
which is one of the greatest countries buying American products and American
goods ?
After studying this situation, and considering it for the past year, in order
that I could bring back to you the most reliable information on this subject, I
am glad to be able to state that I believe that the United States will hold a great
part of the trade which it has gained during the war.
Our condition has been greatly improved. We are now prepared to give
the credits which are desired. We have our own two splendid American branch
banks located in Buenos Aires. Those two banks at the present time, although
one of them is only three years old and the other a year and a half, have ap-
proximately sixty million dollars in deposits. One of those institutions started a
year ago a savings campaign and in less than seven months gained one hundred
and seven thousand individual depositors in its savings account, with a total of
about five millions of dollars.
We have in Buenos Aires at the present time eighty-eight representative
American firms who are carrying stock, either in their own branch houses or by
direct representation. Those concerns are prepared to meet any European com-
petition and are selling direct to the consumer, the thing which is absolutely
96 SECOND PAN AMERICAN COMMERCIAL CONFERENCE
necessary in foreign trade to do a very large business. I particularly refer to
the paper trade, before the war, the paper trade in the Argentine was entirely
in the hands of the Germans. Two American wholesale houses, carrying tre-
mendous stocks, are now located in Buenos Aires. One of these houses alone
did very close on to three million dollars worth of business last year. That
house includes customers from the smallest printers from one end of the coun-
try to the other. They have their traveling representatives, their branch stores;
they give credits that are necessary and consequently they have the business so
the Germans can never come back and get the paper trade. That is true of
many other of our branch houses of American manufacturers and our branch
lines.
I want to add just one word before I leave and that is rather pessimistic.
Do not look for too much trade from Argentina during the balance of this year.
Argentina is like all the rest of the world, it is suffering from the war, it is suf-
fering from the readjustment, it is suffering somewhat from labor troubles,
strikes, etc., not any worse than anywhere else but enough to make people restrict
purchasing. Then there is the firm belief in the minds of the Argentine business
prices are going to be lower. They believe that manufacturing costs all over the
man and I tell you that they are the cleverest business men in the world that
world must fall; that freight rates are going to drop and consequently they are
buying from day to day and are not placing any larger orders until this Fall prices
drop, which they anticipate. Consequently, buying in Argentina is very limited.
Then there is an over-surplus in many lines of manufactured articles in
Argentina. When the armistice came in November, every manufacturer in the
world who had orders pending in Argentina for goods some of which had been
pending for a year and a half shipped everything that they had all at one time
to Argentina. Fortunately for them, when the armistice came there was ship-
ping which could be diverted to their use which we had anticipated using for
moving troops to Europe and we sent those ships in November and December
and January to the Argentine and they came down there loaded to their capacity
with manufactured goods.
The result was that there was an over-surplus, there was a panic in some
lines, textiles fell in prices 40 per cent, below prices in New York and that con-
dition is going to last throughout practically all this year. So do not look for
too much business in Argentina this year, but remember that Argentina is today
the most prosperous nation on the face of the world.
Any country that two years ago could lend the Allied nations $250,000,000
to buy wheat and corn and meats and can come back again this year and lend
those countries $200,000,000 more; which could put up $140,000,000 to keep the
American dollar from declining in the Argentina market ; which could pay to Ger-
many and to France and to England practically $350,000,000 of obligations during
the war, who has had a balance of trade in its favor of $600,000,000 during the
last four years, and which today has a larger per capita gold reserve than any
other nation in the world, is a country that is going to be in business when these
temporary conditions are done away with and which is going to be the largest
consumer of American products. And the Argentinians like us, they want us
down there, they are willing to buy our goods and all that they want is a fair
show. I am sure that we will be able to give it to them.
97
BOLIVIA
PAN AMERICAN FINANCES AND TRADE WITH SPECIAL REFERENCE TO
BOLIVIA
BY SENOR JULIO ZAMORA, FINANCIAL AGENT OP' THE BOLIVIAN GOVERNMENT.
(Read at the Morning Session of Thursday, June 5)
Gentlemen: All of us, North, Central and South Americans congratulate
ourselves upon this opportunity afforded by the Pan American Union for the
purpose of discussing commercial and economical subjects. At this momentous
time marking the conclusion of the greatest war in history, this conference per-
mits us to reorganize our business and to lay the corner stone of normal life for
all nations.
The most striking lesson for the South American Republics, learned since
the beginning of the great War, has undoubtedly been a knowledge of the un-
certain situation of the countries, constituting one Continent, and which bound
by ties of neighborhood, race, language and history have neglected to live eco-
nomically independent, due to the fact that they had overlooked commercial in-
terchange among themselves.
Profiting by this experience, the leading men of the South American Re-
publics, should direct their steps to effect a complete reorganization in the in-
dustrial field. They should promote preferably through a policy of reasonable
protectionism the wide distribution of national raw material for manufactures,
and should inaugurate a spirit of enterprise, so often lacking amongst some of
our wealthy people. This would be the starting point for the commercial inter-
change between neighboring countries, and, therefore, would compel Pan Amer-
icanism in the future to be based upon very close economic relations, thus bind-
ing with even stronger ties, all the Nations that constitute the Americas, as
these will be more firm than those created by Diplomatic channels.
South America possesses, herself, all sorts of products to amaze the world,
with an overabundant production of whatever its needs may be. Each of the
Republics has within its territory particular zones which render special products,
and no doubt a day will come when South America will supply all the needs of
the other Continents, a day when she will go "over the top." But to make this
fact a reality, South America needs capital and immigration. As regards Bo-
livia in particular, I can assure you, without any fear of contradiction, that noth-
ing would please us, the Bolivians, more than to promote our industries and to
settle our fertile, although now deserted agricultural regions, and to this end
we prefer to interest American capital and American immigration rather than
any other. For we have every reason to admire most heartily and to envy the
gigantic activity and vigor of this country, that possesses along with a lofty
democratic spirit, the gift of carrying out and organizing great and astonishing
enterprises.
It is my own opinion that the duty now of the United States is to look
forward to the commercial and industrial development of the countries of Latin
America. I advocate the following reasons :
First : American solidarity demands the use of American capital in pref-
erence to any other; Second, the weakened and crushed condition of Germany
makes it imperative for the United States to replace in the economical, com-
mercial and industrial field all that Germany gave, loaned and purchased in South
America; Third, because the War and the opening of the Panama Canal have
operated to entirely change the commercial situation in that part of America,
making of the United States the pivot of this movement.
Bearing these facts in mind, the United States will not accomplish the
redeeming work so successfully started in the name of right and justice, if they
do not give the necessary attention and care concerning the economical and indus-
trial necessities of each of the South American countries, and in so doing this
work will be of mutual benefit. It is essential to state that when) we seek Amer-
ican capital or lay down commercial transactions before merchants and bankers
in the United States we do not ask gratuitous favors, rather we offer extraor-
dinary profits.
98 SECOND PAN AMERICAN COMMERCIAL CONFERENCE
The United States of North America cannot excuse themselves for lack
of capital, as they are to-day the wealthiest country in the world. If there is
anything over and above it is money. They should, therefore, lend their financial
help to practical and profitable enterprises, provided, of course, they are duly
guaranteed.
To accomplish this, they must accommodate their banking transactions to
South American peculiarities, and it is essential that the leading banks of the
United States, or an association of these banks, open branches in every one of
the South American Republics.
The first and mutual advantage rendered by these offices will be the most
trustworthy source of information for American investors on contemplated trans-
actions, as whatever we may now say regarding the undeveloped resources of
immense wealth of our territory; of our credit, and of the advantage of certain
transactions, this information might be received with prejudice by those who
think it is a question of mere propaganda.
It is, therefore, necessary that this information be transmitted by the
American agents as quickly as possible, thus enabling speedy and trustworthy
transactions.
I myself believe that the opening of branch banking houses in all the
South American Countries, must be one of the endeavors of this Second Pan
American Conference, as this involves the solution of economic and commercial
problems.
Now, dealing with the Bolivian financial situation and necessities, I must
state that the Bolivian people have realized that the most sensible thing to do
in order to be in readiness for the natural development of its unexploited riches
is to construct railroads; therefore, the collective effort of the Republic has
been directed to their construction. Bolivia not only produces silver, gold, tin,
tungsten, antimony, bismuth, copper, etc., as is generally known at the present
time, but she also possesses fertile regions suitable for agriculture, wonderful
plains for cattle raising on the North and Northeastern territory, and vast for-
est which produce all fruits and woods known to the world. Unfortunately ex-
ploitation on a larger scale cannot now be effected, due to the enormous distances
separating these regions from the consuming towns or seaports.
With the desire to reach by ra?l the most distant and wealthiest places of
the Republic, a plan was inaugurated in 1916 and a contract entered into with the
National City Bank and Speyer & Company to construct a system of railroads
by means of a Construction Company, capitalized with five and a half million
pounds and secured as follows : The American firms contributed three million
pounds in debenture notes of first mortgage on the railroad to be constructed,
and two and a half million pounds were subscribed by the Bolivian Government
on income bonds issued on Second Mortgage, which are to be cancelled in the
year 1932. This contract was duly and legally carried out by both parties. The
roads were constructed and the capital entirely expended. These roads are now
in full operation and their profits are increasing daily, thus confirming the ex-
pectations which originally induced the capitalists to undertake the work.
The Railroad System now completed and in operation comprises the fol-
lowing lines: Oruro-La Paz, Oruro-Cochabamba, Potosi-Rio Mulato to join
the main trunk line of the Antofagasta-Oruro, and the line frorn^ Uyuni another
station of the main system, towards the Argentine Republic, joining the Central
Norte Argentine, which has the same standard 3 ft. gage as the Bolivian Rail-
roads which is also the gage of the Arica-La Paz Railway. The completed system
will link the Atlantic and Pacific Oceans by a railway starting in Buenos Aires,
and terminating in Pacific Port of Arica.
The above shows the great international importance of this work in which
completion the Bolivian Government is so keenly interested and for which it is
seeking a million and a half pounds loan which will be explained further on.
The capital obtained through the Speyer contract was only enough to carry
out the work of those lines as above stated, and it is the aim of the Bolivian
Government to continue the extension of its Railroad System securing fresh
capital and new contractors. Those lines to be constructed, or in the course of
construction, are:
BOLIVIA 99
(a) Atocha-Tupiza Railroad, with an estimated cost of one million pounds
sterling to join to the Argentine System. I have stated before the international
significance of this road and I shall only add that it goes through a region of
unexhausted wealth where the "Quechisla" and "Oploca" Mines are located.
(b) Potosi-Sucre Railroad, now under construction by the Government.
An estimate of one million pounds will be necessary for its completion. This
line has industrial significance as it is the first to be extended into the produc-
tive eastern agricultural and petroleum districts.
(c) Cochabamba-Santa Cruz Railroad. Surveys on this line are actually
being made, and it is also very important, as it will branch the Speyer System
to the wealthiest district of Bolivia, a zone which produces rice, sugar, woods
and similar tropical products, and also cattle. The actual production of which
is now very limited, due to lack of cheap transportation facilities.
(d) Railway from La Paz to a Navigable Point on the Beni River. This
itself means a very important route, running through vast and wealthy agricul-
tural regions to heart of rubber plantations. It is now under construction by
the Government with American capital. To start this work Bolivia secured a
loan of five hundred thousand pounds, through the banking house of Chandler
& Company, and this sum will only suffice to reach the Yungas Zone'. Its prin-
cipal production consists of coca, coffee, tobacco, fruits and woods. We now
require the necessary capital to extend this line to the Beni.
Here, to interest capital on the loan required by the Bolivian Government,
I want to point out the following:
The Speyer System, which runs through the heart of Bolivia, has been
constructed with American capital, and will be the exclusive property of Amer-
icans the moment they return to the Bolivian Republic the two and a half mil-
lion pounds which represents the share of the Bolivian Government on second
mortgage bonds.
All the benefits of these railroads, and the increased value that they will
attain through the development of the country, will also benefit the owners.
There is no doubt that these four lines will ultimately be joined to the South
American System of Railroads, and that they will bring into closer contact re-
gions now far distant. These facts will be of such interest to American capitalists
that the necessary funds that Bolivia needs for the extension of these lines will
assuredly be forthcoming.
At any rate, this reflection is only a mere explanation and should not be
considered as of general interest. Further on I will offer a thorough explana-
tion of this question.