COMMUNICATION AND COMMERCE
British enterprise in South America--The various industries
controlled--The railways of the Southern continent--A remarkable
record--The opening up of new lands--Some possibilities of the
future--Sound basis on which the extension of the lines is
founded--Products and transport facilities--Probable influence of
communications--Uruguayan railways--A high standard of
enterprise--Comfortable travelling--Some comparisons between
Uruguay and Argentina as railway countries--Level country
_versus_ hills--Stone _versus_ alluvial soil--Questions of
ballast--Importance of the new ramifications--Railway
construction in Uruguay--History of the lines--Government
obligations--Mileage and capital of the companies--Interest paid
on capital--Various railway systems--Areas served--The Central
Company--Sketch of lines and extensions--Important
developments--The communication with Brazil--Financial position
of the Company--Midland Uruguay Railway--Development and
extension of the line--Receipts and expenses--The North Western
of Uruguay and Uruguay Northern Railway--Montevidean
tramways--Local, British, and German enterprise--Steamer service
of the River Plate--The Mihanovich line--Ocean passenger
traffic--Montevideo the sole port of call--The Royal Mail Steam
Packet Company--The Pacific Line--The Nelson Line--Other British
companies--Position of British exports--Sound consular advice.
British enterprise throughout South America is admittedly remarkable.
If one except the retail and local trades that are carried on by the
native-born inhabitants of each republic, or by the Spaniards,
Basques, Italians, and Turks, each of which have taken some particular
trade under their own protection, there is probably not a single
branch of industry in which the British are not interested in a more
or less important degree.
From mining and banking to farming and general commerce, the scope is
sufficiently broad. In no other kind of enterprise, however, has
intelligence and skill been so freely lavished as upon that of the
railways. The British have not the sole monopoly of these great
undertakings, it is true. There are the local Government lines,
numerous French railways, and others of various nationalities that are
ably served and administered. Yet almost every one of the most
important lines throughout the entire Southern continent owes its
existence to British capital, and is managed by British officials. The
record is a remarkable one, and the full tale of its magnitude has yet
to be written. It is true that in many branches of industry the ratio
of British increase has not been in proportion with that of other
countries--a falling off that may be inevitable, but that in any case
is regrettable. Fortunately, this is not the case with the railways.
Indeed, when the progress that is now being made is taken into
consideration, it becomes evident that the results that must ensue
within the space of a few years cannot well fail to affect the entire
world.
Of the feats of this kind that are at the present moment being
achieved some of the most important are concerned with Bolivia,
Paraguay, and the hinterland of Brazil. The opening up of many of the
hitherto inaccessible regions of these countries means more than the
enclosing within the fold of civilisation vast areas of rubber,
timber, and general agriculture. It promises, in fact, some
revelations in the way of minerals and mines that, although the
possibility of a disappointment must never be lost sight of, are
likely enough to prove of an astonishing nature.
The tales of gold in the untravelled lands where the Indian still
holds sway do undoubtedly not emanate merely from the imagination of
the few travellers who have penetrated within certain of the
districts. The reluctance of the aboriginal to disclose the spots from
which they derive the precious metal is an acknowledged phase of his
character. But it is not solely upon the unwilling testimony of the
Indians that such hopes are based. It is well enough known that when
the expulsion of the Jesuits occurred, and when many of the remoter
districts in which they had established precarious missions returned
to a state of savagery and seclusion, numbers of the mines that were
even then known were abandoned when in the full flush of their
yield--a yield that the primitive native implements could never make
complete.
But it is not in anticipation of such developments as these that the
railways have been built. The ordinary products of the countries in
question are more than sufficient to demand their existence. The
possibility of greater mineral fields than are at present suspected is
merely a side issue in the general scheme. The influence of steam
transport, however, upon many of the silver-mines cannot fail to be
marked, since the utter want of transport facilities now renders
imperative an astonishing number of mines of this kind the productive
power of which is very great indeed.
The Uruguayan railways form no exception to the prevailing South
American rule. The three companies in existence in that Republic are
all British, and the standard of each is as high as that of the others
in the remaining republics. Although the enterprises naturally enjoy
lesser advantages in the way of skilled labour and technical
conveniences than those here at home, there can be no doubt that the
degree of comfort enjoyed by the traveller on a Uruguayan line
compares very favourably with that experienced on an average British
railway. The service and observation of punctuality are both to be
commended, while the dining and sleeping cars are not only admirable
of their type, but extremely well adapted to the needs of the country.
The natural facilities that the Uruguayan country offers for railways
differ considerably from those of the Argentine. In the central
provinces of the latter many hundreds of miles may be travelled
without any gradient whatever becoming apparent. The absence of
streams here, moreover, obviates almost entirely the necessity for
bridge building. It has already been explained that the
characteristics of the Uruguayan Campo are entirely different.
Although it possesses few hills of any really imposing height, its
stretches of dead level ground are equally rare. Thus, although the
gradients may be gentle and sufficiently easy, they are almost
continuous. In some places, moreover, the rise and fall of the line is
necessarily accentuated, and even abrupt--at all events, compared with
the neighbouring areas.
Although, however, Uruguay may not be quite so favourably situated for
railway purposes as regards its levels, it possesses one very
important advantage over Argentina. In the central and richest
provinces of the latter one of the most serious drawbacks lies in the
total absence of any local material with which to ballast the track.
For hundreds of miles on all sides no stone--not even the merest
pebble--is to be met with, since the land consists of nothing beyond
the rich, alluvial soil. Thus, if stone be required for the perfection
of the tracks, it is necessary to import it from afar, and the haulage
of the material inevitably forms a weighty item in the cost and
upkeep of the line. In this respect Uruguay is far more favourably
provided for. Stone abounds, not only in certain districts but
throughout the country--although, of course, there are many centres
where the quality of the material is far superior to that of others.
Thus the question of ballast and embankments is solved in a very
simple fashion here, and in a land of numerous rivers and streams the
construction of stone bridges is made possible.
As regards the present position of Uruguayan railways, it is
impossible to over-estimate the importance of the new ramifications
that are now spreading through the country. Uruguay contains no
mysterious hinterland, it is true. But, although every corner of the
Republic is known, the resources of many of its regions have of
necessity remained quite untapped for want of the railway
communication that was essential for the transport of the produce in
whatever shape or form it might emerge from the soil.
I am indebted to Mr. V. Hinde, the secretary of the Midland Uruguay
Railway, for the following information concerning the railways of the
country:
* * * * *
The construction of railways in Uruguay may be said to have commenced
in the year 1866, when a concession was granted for a line from the
capital (Montevideo) to Durazno, a distance of 130 miles. The
construction of this line was followed by the building of a short line
from the city of Salto towards the frontier of Brazil. In 1877 an
English company, the present Central Uruguay Railway Co., Ltd., was
formed to take over the former and complete the line to the town of
Rio Negro, which extension was finished in 1886.
In the meantime the Uruguayan Government had devoted considerable
attention to the question of railways, and in the year 1884 a law was
passed by the Chambers embodying a definite scheme of railway
communication with various parts of the Republic, the executive being
authorised to contract for lines as outlined, and to guarantee an
income equal to £560 per annum per mile of line for a period of forty
years. A result of this enactment was the formation of several
companies in England, and railway construction was rapidly proceeded
with. By the year 1891, 1,000 miles of line were opened for traffic.
In respect of which some 670 miles enjoyed the Government guarantee,
equal to 7 per cent. on a capitalisation of £5,000 per kilometre.
At this point, however, further development received a check by the
Government finding it necessary to rearrange its obligations. This
rearrangement took the form of a reduction of the interest on the
External Debt, including railway guarantees, from 7 per cent. to 3-1/2
per cent., the service at this reduced figure being secured on 45 per
cent. of the Custom House receipts specially hypothecated. Punctual
payment of guarantees at this rate has always been made.
In 1889 the Central Uruguay Western Extension Railway Company was
formed to construct a line from San José to the towns of Mercedes,
Sauce, and Colonia. This line does not enjoy a Government guarantee,
and reverts to the Government in the year 1862.
The railway system of the Republic to-day amounts to some 1,432 miles
of line opened for traffic and 78 miles in course of construction.
The following shows the capital of the respective companies and length
of lines:
--------------------------------------------+-------+---------------------
|Mileage| Capital.
| Open. | £
--------------------------------------------+-------+---------------------
Central Uruguay Railway, including Western | |
Extension and North Eastern of Uruguay | | } Worked
Railway Co., Ltd. | 482 | 5,403,018 } by
Central Uruguay Eastern Extension Co., | | } Central
Ltd. | 277 | 2,033,400 } Uruguay
Central Uruguay Northern Extension Co., | | } Railway
Ltd. | 182 | 1,627,150 } Co.
Midland Uruguay Railway Co., Ltd. | 229 | 2,378,462
North Western of Uruguay Railway Co., Ltd. | 111 | 1,435,517
Uruguay Northern Railway Co., Ltd. | 73 | 855,562
Uruguay East Coast Railway | 78 | 309,980
+-------+---------------------
Total |1,432 |14,044,089
--------------------------------------------+-------+---------------------
The amount of interest, &c., paid on the above capital may be seen in
the table on the following page, which is equal to rather over 4-1/5
per cent. on the whole capital of £13,444,089.
The railway system of Uruguay may be said to be represented by the
following companies:
The Central Uruguay Railway and its allied lines.
The Midland Uruguay System, which joins that of the Central and forms
a means of communication with the cities of Paysandú and Salto, with a
branch to the town of Fray Bentos, now almost completed.
The North Western of Uruguay, continuing the railway from Salto to the
frontier of Brazil at Cuareim.
In addition there are the short lines in the nature of branches--that
of the Northern Uruguay Railway Company, branching from the
North-Western system at Isla de Cabellos connecting with the frontier
of Brazil at San Eugenio; and the Uruguay East Coast Railway from a
junction with the North-Eastern Uruguay system at Olmos to Maldonado,
a distance of seventy-eight miles.
------------+-------------------------------------+----------+---------
£ | Interest paid on Capital. | Per Cent.| £
------------+-------------------------------------+----------+---------
2,000,000 | Central Uruguay Ordinary Stock | 5 | 100,000
400,000 | " " Preference Shares | 5-1/2 | 22,000
953,018 | " " Debenture Stock | 6 | 57,181
1,000,000 | " " Western Railway | |
| Extension Debenture | 4 | 40,000
250,000 | Central Uruguay 2nd Debenture Stock | 6 | 15,000
400,000 | North Eastern of Uruguay Preference | |
| Shares | 7 | 28,000
400,000 | North Eastern of Uruguay Ordinary | |
| Shares | 7 | 28,000
775,000 | Central Uruguay Railway Eastern | |
| Extension Ordinary Shares | 3-3/4 | 29,062
775,000 | Central Uruguay Railway Eastern | |
| Extension Preference Shares | 5 | 38,750
483,400 | Central Uruguay Railway Eastern | |
| Extension Debenture Stock | 5 | 24,170
1,000,000 | Central Uruguay Railway Northern | |
| Extension Ordinary Shares | 3-3/4 | 37,500
627,150 | Central Uruguay Railway Northern | |
| Extension Debenture Stock | 5 | 31,357
600,000 | Midland Uruguay Railway Ordinary | |
| Stock | nil | ----
600,000 | Midland Uruguay Railway Prior Lien | |
| Debenture Stock | 5 | 300,000
1,179,462 | Midland Uruguay Railway Debenture | |
| Stock | 5 | 58,973
120,120 | North Western of Uruguay Ordinary | |
| Stock | nil | ----
293,172 | North Western of Uruguay 2nd | |
| Preference Stock | nil | ----
583,850 | North Western of Uruguay 1st | |
| Preference Stock | 2 | 11,677
400,000 | North Western of Uruguay 1st | |
| Debenture Stock | 6 | 24,000
38,375 | North Western of Uruguay 2nd | |
| Debenture Stock | 6 | 2,302
100,000 | Uruguay Northern Railway Ordinary | |
| Shares | nil | ----
250,000 | Uruguay Northern Railway Preference | |
| Stock | 1 | 2,500
449,400 | Uruguay Northern Railway Debenture | |
| Stock | 3-1/2 | 15,729
56,162 | Uruguay Northern Railway Prior Lien | |
| Debenture Stock | 5 | 2,808
125,000 | Uruguay East Coast Railway Ordinary | |
| Shares | nil | ----
184,980 | Uruguay East Coast Railway | |
| Debenture Stock | nil | ----
------------+-------------------------------------| |---------
£14,044,089 | | | £599,009
------------+-------------------------------------+----------+---------
_Central Company._--By far the most important system is that of the
Central Company, including leased and worked lines. The lines of this
system extend from the capital to the frontier of Brazil at Rivera,
with branches to the city of Mercedes in the west, and the towns of
Melo, Treinta y Tres, and Minas on the Eastern and North-Eastern
Extension. The railway from the capital passes through a
well-populated agricultural district for a radius of about thirty
miles; this radius is gradually extending, stimulated by the
increasing importance of Montevideo and the gradual breaking up of
lands in the fertile regions of the western and eastern extensions.
The extension now finished to Melo opens up another district suitable
to the cultivation of cereals, from which considerable traffic is
being derived.
An extremely important matter in connection with the future
development of these lines, and, in fact, all the railway interests of
the Republic, is to be found in the completion of the port works at
Montevideo. Until the port works were taken in hand the embarkation of
cargo at this principal outlet of the Republic had been greatly
hampered by natural difficulties, and consequently heavy charges in
connection with the lighterage from the railway wharf to the ocean
steamers. The deepening of the inner port and the construction of
extensive wharfs and piers at which ocean steamers can berth will
doubtless lead to an increase in traffic, not only from Uruguay but
the neighbouring State of Rio Grande do Sul.
An important connection with the railway system of Rio Grande do Sul
is made at the terminus of the Central Uruguay Northern Extension
Railway at Rivera, and by the completion of a connecting link between
the Sao Paulo Rio Grande Railway System and the lines of the Cie
Auxiliare de Chemins de Fer au Bresil, a Company which controls
practically the whole railway system of the State of Rio Grande do Sul
(now almost completed), direct railway communication will be
established between Montevideo and Rio de Janeiro.
The following table shows the result of working of the Central Uruguay
Main Line, exclusive of extensions, which, as far as expansion in
receipts is concerned, may be regarded as indicative of those lines:
--------------------------------------------------------
Year. | Receipts. | Expenses. | Profit. | Dividend. |
--------------------------------------------------------|
| | | | Per Cent. |
1904-5 | 414,228 | 190,165 | 223,572 | 4-1/2 |
1905-6 | 442,083 | 212,465 | 229,618 | 5 |
1906-7 | 493,682 | 244,922 | 248,760 | 5 |
1907-8 | 508,044 | 272,104 | 235,940 | 4-1/2 |
1908-9 | 557,122 | 287,505 | 269,617 | 4-1/2 |
1909-10| 577,489 | 287,959 | 289,530 | 5 |
--------------------------------------------------------
The increase in gross receipts is perhaps not quite so marked as in
the case of neighbouring lines in the Argentine Republic, and a reason
for this is to be found in the fact that, favoured by magnificent
grazing camps, cattle raising is still the principal industry of
Uruguay. Agricultural development, although more marked of recent
years, has been slow, but an increase in this is probably due to
efforts which are being made by the Government to promote colonisation
and the extension of lines in the Eastern provinces.
_Midland Uruguay Railway._--This Company's line passes through an
entirely pastoral district, and its traffic is principally derived
from the carriage of cattle, wool, and general merchandise. An
important extension is now practically completed to Fray Bentos, the
headquarters of Liebig's Extract of Meat Company. The River Uruguay at
this point is navigable for large ocean steamers, and a pier has been
erected to accommodate these, which will put the railway system of the
north of the Republic in a more favourable position to handle the
various products of cattle-killing establishments, both in Uruguay and
on the Brazilian side of the frontier of Rio Grande do Sul, an
industry of increasing importance.
-------------------------------------------------------------
Year. | Gross Receipts. | Expenses. | Profit. | Dividend. |
-------------------------------------------------------------|
1905-6 | 60,533 | 50,304 | 10,229 | |
1906-7 | 75,887 | 60,833 | 15,054 | |
1907-8 | 72,172 | 67,153 | 5,019 | |
1908-9 | 81,503 | 71,114 | 10,389 | |
1909-10 | 88,165 | 67,479 | 20,686 | |
-------------------------------------------------------------
At the present time a considerable tonnage is transported by river
from Salto for shipment from Buenos Aires. It is possible, therefore,
that the extension of the Midland Company to Fray Bentos will play an
important part in the development of its line and those of the
companies north of Salto, and Fray Bentos should very shortly become
the second port of the Republic.
The receipts in Uruguay of the Midland Company have shown some
expansion of late years, having increased from £55,000 in the year
ending June 30, 1904, to £88,165 in 1909-10 (see opposite page).
_The North-Western of Uruguay Railway and Uruguay Northern
Railway._--The remarks with regard to the nature of the country and
the traffic of the Midland apply also to these lines. At the terminus
of the North-Western Line at the River Cuareim arrangements exist for
the interchange of traffic with the Brazil Great Southern Railway, and
the respective Governments have sanctioned a project for the
construction of an international bridge to connect the lines at this
point. It is probable that this bridge will be constructed within the
next few years, as the interchange of traffic due to the extension of
the Brazil Great Southern Railway to San Borju is likely to be
considerably enhanced.
The excellent tramways with which Montevideo is served are
administered by three companies, local, British, and German. The local
enterprise is considerably the smallest of the three, the extent of
its lines not exceeding twelve miles. The concern, moreover, is
dependent solely upon horse traction, with its attendant
disadvantages.
The British enterprise, the United Electric Tramway Company, is the
most important in the capital. It possesses eighty-two miles of line,
195 passenger-cars, and sixty-eight trailers. By the terms of the
concession at least two-thirds of the employees must be citizens of
the country. The Compania Alemania Transatlantia is a German Company,
with a length of seventy-five miles of electric tramlines.
The steamer service of the River Plate and Uruguay is almost entirely
in the hands of the Mihanovich Company, as, indeed, is that of the
entire system of these great rivers. The Company is an extremely
powerful one, possessing a very large fleet that comprises all classes
of steam vessels from the small, puffing tug to the largest and most
modern liner of the fresh waters. Many of these latter are peculiarly
fine specimens of their type, graceful in build, powerfully equipped,
and provided with broad and roomy decks. Although the larger of these
craft will carry between two and three hundred passengers, the cabin
and saloon accommodation is contrived on a most liberal and imposing
scale. Indeed, there is no doubt that the Mihanovich boats are a
credit to the broad rivers on which they float.
So far as the ocean passenger traffic is concerned, Montevideo is the
sole Uruguayan port at which the liners call. The capital affords a
port of call for the magnificent vessels of the Royal Mail Steam
Packet Company that, notwithstanding their size, are now enabled by
means of the recent harbour improvements to enter the inner waters of
the port. Of the other British lines concerned, the most important are
the Pacific (that is now incorporated with the R.M.S.P.) and the
Nelson Line, that possesses a fine new fleet of ten-thousand-ton
boats. The other great British shipping companies whose vessels call
at Montevideo are the Lamport and Holt, Houlder, Prince, Houston, the
New Zealand Shipping Company, and the Shaw, Savill.
Thus it will be seen that in all monumental undertakings of the kind
the British are holding their own in a satisfactory fashion. As
regards ordinary commerce and the exports of manufactured goods, the
progress, unfortunately, is by no means so evident. I have so
frequently laid stress upon the narrowness of the home commercial
ideas in this respect that still obtains in so many quarters that I am
glad to be able to quote the words of another that admirably fit the
case. The following is from the Consular Report on Uruguay issued in
1910, and the sentences undoubtedly sum up the situation with a
commendable accuracy: "It has been pointed out to me that careful
investigation into the commercial methods of our competitors reveals
several reasons why British trade has failed to retain the proportion
of the imports it held a few years ago. For instance, greater
attention to detail is paid by the foreign merchant than by his
British rival, who, as a rule, adheres in catalogues and invoices to
British standard weights and measures and prices, without giving their
equivalent in terms of the country. In tenders for public works German
firms study the specifications with minute care, and tender for every
item, leaving nothing in doubt, besides drawing up their applications
in so clear and simple a manner as to give the minimum labour in
examination, and the maximum of facility in comparison to the
authorities who deal with them; whereas British tenderers sometimes
merely quote a lump sum, ignoring all details, and often, when details
are given, the price of many items is left vague, 'As may be agreed
upon.' When goods are imported into the country from Germany, France,
the United States of America, &c., a detailed statement in Spanish of
the contents of each package is generally furnished, with metric
weights and measures, which facilitates their rapid examination and
dispatch, whereas British firms as a rule content themselves with the
brief statement, 'Case containing machinery' or 'hardware,' &c.,
leaving to the Custom House official the task of working out details
and calculations.
"Then, again, as regards languages, the British commercial traveller,
armed with British catalogues and price lists [although I note with
pleasure that some are now printed in Spanish], knows no language but
his own, but the German invariably speaks Spanish and English, and he
has carefully studied beforehand the needs of the market which he is
visiting and the financial position of merchants. This gives him a
great advantage over his British rival, who rarely has previous
knowledge of his would-be customers, and is dependent on such chance
information as he may pick up to be subsequently confirmed by
inquiries at the banks. Time is thus lost, and irritation is caused to
respectable buyers, who resent what appears to them impertinent
suspicion."