THE INDUSTRIAL SIDE OF THE REPUBLIC
The main energies of Argentina must for some time be devoted to her most
obvious source of wealth. Yet it would be unwise to neglect a
consideration of her industrial possibilities. Naturally she is anxious
to supply herself with the commodities essential to daily life and
comfort. But up to the present the Argentine has relied chiefly upon the
exchange of its products, even for commodities which might be produced
at home. This is due to the tendency common to new countries of going in
for the "big deal." In this sense the agricultural industry has still a
long journey to go. Intensive culture has so far not become a necessity.
Extensive culture has yielded such good profits that no impulse has been
given to the full exploitation of Argentina's hidden resources. This
partly explains why the casual observer is confronted with the apparent
anomaly of vegetables, fruit, eggs, and other foodstuffs being dear in
an agricultural country.
It is on the lines of finishing her existing industries, attending to
by-products as well as main products, that the foundations of
Argentina's industrial future will best be laid. The immediate obstacle
is the scarcity of labour. The essential requirements already exist, a
good climate, excellent means of communication, a growing population, an
open Custom House for most of the machinery and implements required for
national industries, and a stable credit.
Few countries have been able to inaugurate home industries under more
favourable auspices. Nothing can deprive Argentina of her agricultural
eminence. But how she will fare when embarking upon the more uncertain
career of a home manufacturer depends upon many things. Necessity is
already driving Argentina seriously to face the problem of producing for
herself her more obvious needs. The comparatively high cost of living is
a growing trouble. Infant though she may be industrially, Argentina has
already experienced the evils of industrial unrest. The principal
manifestations have been in Buenos Aires, which, in addition to being
the port and the centre of national activities, has been the storm
centre of the rush to exploit her resources. It is the pulse of the
Republic. Like other great cities, it is crying out against the
diminishing value of the dollar.
Argentina's readiness for home manufactures is an urgent problem
confronting the Government. The Government wants a more all-round
development of the country's resources. Interwoven with this problem are
important considerations: a more equable distribution of the population;
the provision of more centres for the exchange of commodities; the
relation between taxes for revenue and protective tariffs; the
selection of what industries are to be established at an economic
profit; the extent to which foreign manufacturers can be induced to
start their industries within the Republic.
So far, the only industries that have continued with success are those
producing articles difficult of transport, or of an expensive character.
With a greater mobility of trade in the country, and a more scientific
manipulation of the tariff, there is no reason why Argentina should not
provide herself with many of the things which to-day furnish the labour
agitator with opportunities for tirades against "costly living." Backed
by agricultural wealth, and supported by splendid railway facilities,
Argentina should be able to make advance on particular lines. Take wool
as an illustration. Argentina produces more than sufficient for her own
requirements, and yet she obtains woollen goods from other countries. Is
it to be taken as final that the absence of coal in the country makes
the development of woollen industries at home an economic impossibility?
It is not, perhaps, so much a question of labour and initiative as the
absence of natural advantages.
It is necessary to look farther afield than Buenos Aires in considering
the chances of a new industry. The concentration of trade in the capital
has probably been a hindrance. The congestion of all interests,
commercial, political, and social, in "B.A." has caused land to increase
enormously in value, an important consideration in setting up factories.
In turn, other charges are correspondingly increased. Trade rises and
falls according to the season. There is less stability for the worker,
more fluctuations for the trader.
But, with railways linking up the interior with the coast, there is now
no necessity for the drama of Argentina's commerce to be confined to a
single theatre. There must be more centres of exchange, fresh districts
for production and manufacture. If the auxiliary industries to corn
growing and cattle raising were better fostered there would be no
necessity for inland towns to go to Buenos Aires for vegetables, eggs,
cheese, butter, and poultry. The market garden, the dairy, the poultry
farm, the orchard, and the auxiliary factories would pour their products
into the provincial centres. Local needs would be met locally. The
surplus would be sent on with the grain and the cattle to the markets at
Buenos Aires.
These, after all, are probably the safest lines upon which a new country
can travel in her march to greater economic independence. First the
purely agricultural; then the by-products of agriculture as a
supplement; then gradually the establishment of whatever manufactures
are practicable and profitable. For the present Argentina has greater
need for cheaper eatables than for cheaper motor-cars.
Countries doing a big trade with the Argentine are beginning to see the
force of providing goods on the spot. The crowding of agents in the
principal towns has increased competition to a point at which the next
move by certain competitors must be in the direction of producing in
the country or losing the trade entirely. This will be all the better
for Argentina. She has long had justifiable cause for complaint against
those who are sent to Buenos Aires and other parts to barter for her
trade. A well-worn lament in the reports of the British Consul concerns
the English trader's lack of adaptability to the peculiar conditions of
Argentina. Mention is made of quotations in English, the sending of
representatives unacquainted with the language and business terms of the
country, the adherence to methods applicable only to England.
On the other hand, the British exporter has grumbled at economic
conditions calling for long and sometimes exaggerated credit; the taxes
levied on commercial travellers; the difficulty of dealing direct with
customers. Between the two points of view is the fact that commercial
enterprise has stopped with the arrival of trade representatives in
Buenos Aires.
The Argentine has already made shots at industry building. Tangible
signs of an industrial future were visible on many occasions during my
tour. Tall and smoking chimneys and busy factories for tinned meats,
clothing, and boots were evidences of the start already made. Before,
however, an advance can go towards full development there must be a more
definite scheme of working, and a clearer apprehension of the end in
view. There are, for example, greater possibilities for brewing and
distilling. A recent census showed that these two activities engaged
about 160 factories. Sugar, too, has proved for itself that when worked
on proper lines it is a most profitable industry. Sugar-canes, formerly
exported for others to refine, are now refined in the country, where the
product finds a ready market.
It would be well-nigh hopeless for Argentina to attempt the introduction
of industries to compete in her own market with well-established foreign
industries of the same kind without the aid of tariff protection. This
might mean a temporary loss in revenue by checking imports; but
compensation would come through the success of the home industry. At the
present time Argentina exports in raw wool over £10,000,000 worth
annually. She imports woollen goods worth nearly £3,000,000. Her imports
are increasing and her export of raw material decreasing. In ten years
the latter fell considerably in actual bulk, through the rush to make
quicker money from meat. Meanwhile, the question arises as to why
Argentina should not prepare and manufacture woollen goods for home
needs? The existing market is a large one. Textile industries already
exist. They are few, but the fact that the number of establishments has
increased is a clear proof that textile industries can be profitable.
The opportunities here presented for the investment of capital are
invaluable. There is room for new and increasing enterprises in a
growing country with many years of growth before it.
It is essential to all industrial expansion that a country's credit
should be good and its currency stable. Argentina is well off in this
respect. Contrasted with some other American republics, in which
revolution, revolt, and financial distress are painfully frequent,
Argentina is a political and financial paradise. This stability, if not
in itself an inducement to the investment of capital, is at any rate a
guarantee that capital may be invested with safety. And in these days
safety itself is a big inducement. Paper dollars form the everyday
currency of the country. Careful provision has been made to establish
the paper in circulation on a definite gold basis. Since the Caja de
Conversion, the Government institution for the issue, exchange, and
conversion of the paper currency, was established in 1899, the paper
dollar has always been worth $.44 gold (between 1s. 8d. and 1s. 9d.).
Certain specified resources are appropriated for the formation of a
conversion fund, which guarantees the paper currency.
During the latter part of 1913 there was a considerable shipment of
English sovereigns to the Republic. Under the Pellegrini Law passed in
1902 the Caja de Conversion must hold in gold an equivalent to the paper
money in circulation. Indeed, the National Conversion Office, the
National Bank of Argentina, the London and River Plate Bank and other
banks had in June, 1913, an accumulation of gold amounting to
£67,188,039. The gold in the Caja de Conversion began with the
insignificant sum of £568 on December 31st, 1902; in 1904 it was just
over £10,000,000; the next year it was up to over £18,000,000, and on
June 30th, 1913, it was £53,306,866.
Argentina has a number of well-established banks, affording many
facilities for the development of trade and industrial enterprise. One
of the principal, the Banco Hipotecario Nacional, makes a feature of
special loans for building and land improvements. Its loans are made on
the mortgages of property by the issue of bearer bonds in lieu of cash
to persons mortgaging properties to the bank. It need not be feared,
therefore, that industrial enterprises of reasonable prospects will
starve for the want of financial credit during the difficult years of
inauguration. On the contrary, there is a good supply of money waiting
fresh outlets. Bankers realise that it is to their own as well as to the
country's advantage to have a wide field of financial operations. They
have the money if others have the enterprise and the initiative.
The point has now been reached at which manufactories might well be
harnessed to agriculture not only for the fuller working of Argentina's
resources, but for remedying some of the social difficulties that have
arisen through her relying too much upon one source of wealth.