In 1895 the exports from the United States to the Argentine Republic
amounted in value to $6,686,999 and the imports from that country to
$8,947,165. In 1912 the exports from the United States amounted to
$53,158,179 and the imports to $29,847,016. These figures sufficiently
indicate the results likely to follow the active campaign of the
manufacturers and commercial bodies in this country, recently initiated
as a consequence of the war. The conditions arising out of the great
upheaval caused by that world disaster have furnished the occasion for
the exercise of an effort without parallel in the United States in any
previous attempt to secure a larger share of South American trade. In
this movement the Argentine Republic must necessarily be the main
objective, owing to the vastness of its resources and commercial
activities. Yet, although there is no doubt that the United States
should and will constitute a still greater source of supply to that
country of manufactured products, machinery and other articles, not only
during the war, but for a long period after its close, it is necessary
to consider that in order to secure a permanent extension of
international trade upon a scale of magnitude apparently justified by
superficial conditions, serious attention should be given to matters of
reciprocal interests and the past relations of the Argentine Republic
with the European countries to which it has freely opened its markets.
In this connection the words "reciprocal interests" must be taken rather
in a literal sense than in the sense of reciprocity, as that expression
is usually understood when applied to international treaties. Even
though the question of tariffs does not now form so insuperable an
obstacle to a large interchange of commerce between the two countries as
was formerly the case, the fact that the balance of Argentine's trade
with the leading countries of Europe has always been in her favor,
renders it a condition precedent to a permanent expansion of
international commerce that there must be a greater quality of interest
than exists at present. In other words, the United States must offer
corresponding advantages to the Argentine Republic to attract a transfer
of a considerable share of her commerce from European competitors.
In the instances of Great Britain, Germany and France, with which
countries the Argentine Republic has always transacted the greater part
of her foreign trade, there has not only been a steady and
ever-increasing growth in the consumption of Argentine national
products, but those countries have likewise furnished huge amounts of
capital for the establishment on Argentine soil of industrial and
commercial undertakings, which, by their own necessities, create a
natural extension of commercial interchange. It must also be remembered
that the main products of the Argentine Republic are also the main
products of the United States, where they are protected by High Tariffs,
whereas, in Great Britain, which is Argentina's principal customer,
there are no duties upon the imports of foodstuffs. In these
circumstances it is obvious that some means must be found whereby the
interests of Argentina in her commercial relations with the United
States must be made more reciprocal, either by the introduction of
American capital for the development of local industries, or by the
remission, at least, of a substantial portion of the duties now imposed
upon Argentine exports to the United States.
The enormous growth of population which has changed the position of the
United States from an exporting to a consuming country, so far as
foodstuffs are concerned, will, doubtless, in course of time,
considerably ameliorate the restrictive conditions which have heretofore
operated as a barrier to large exports of Argentine products to this
country. On the other hand, the production of the Argentine Republic, by
reason of the largely increased area placed under cultivation year after
year, maintains her exporting capacity at a constantly higher level.
Thus, given equal conditions in other respects, the United States might
ultimately become as free a market for Argentina's meat and grain as any
of the countries of Europe. Under similar circumstances as those
indicated, there could also be infinitely larger imports of raw material
which could subsequently be re-sold to the Argentine Republic in
manufactured form.
The countries which have hitherto occupied the first place in Argentine
foreign trade are those which not only gave initial impulse to the
development of national industries by the founding of banks and the
construction of railways, but likewise by the creation of adequate
steamship services. There are to-day upwards of 33,000 kilometers of
railway in operation in the Republic, with an aggregate capital of
considerably over $2,000,000,000, more than 90 per cent, of which is
entirely British, whilst the oversea communications are conducted by
regular and rapid services of steamships flying the flags of the
maritime countries of Europe. The great traction companies in the
capital and the provinces are British; the street electric railways
established on an important scale throughout the Republic are British;
the foremost Light and Power concerns are German; with the exception of
the National Bank of the Republic and the branch of the National City
Bank of New York recently opened, the banking interests are largely
European, whilst the great majority of the principal industrial and
commercial enterprises are also European. Of the $400,000,000 of the
Argentine External Debt, practically the whole of the issues making up
this vast sum are in the hands of European investors and, in normal
times, as further capital is called for to meet the requirements of any
of the established enterprises, or of others formed on similar lines, it
is invariably forthcoming from Europe; and to these advantages which the
Argentine Republic enjoys in her commercial relations with the older
countries, there is the additional fact that she derives all her
immigration from northern and southern Europe.
Let us now examine the American interests, the most encouraging features
of which are the establishment of a branch bank of the National City
Bank of New York and the unqualified success in the United States of the
loans recently made by that enterprising institution and other American
bankers to the Argentine Republic. These two factors point to the
realization, by those who are best able to judge, of the necessity for a
new basis of intercourse in the future; and that this fact is
understood in the Argentine Republic may be seen by the appreciative
opinions of the press and the public authorities of that country. In
other forms of industrial or commercial enterprises, American interests
are comparatively insignificant. The acquisition and establishment of
local freezing plants by the American packing houses, though important
in extent, involve considerations of too controversial a character to be
dealt with in this survey of the commercial relations of the two
countries. It is considered desirable, therefore, to treat only of such
branches of industry, commerce and finance as embrace the general field
of foreign enterprise. The only American interest in railways is in the
Argentine Railway Company, which consists of a combination of three or
four minor lines in the north and north-eastern provinces, with a small
proportion of American capital. In the great cattle raising and
agricultural industries there is little or no American capital employed
and it is also conspicuous by its absence from the lengthy list of
land, mortgage and finance companies established in the Republic. It is
true that there are many manufacturing concerns of the United States
represented by agencies, but apart from the Customs revenue this
representation brings to the country it is in no sense a contributor to
its development.
[Illustration: ANOTHER PRIVATE RESIDENCE IN BUENOS AIRES]
[Illustration: WATER WORKS BUILDING, BUENOS AIRES]
An impartial examination of these circumstances raises the question as
to how, without some changes in the directions pointed to, the United
States may hope to share with Europe, on anything like equal terms, the
profitable and ever-growing trade of the Argentine Republic? To sum up
the situation, it may be asked, in what way can the United States
equalize the advantages which Europe offers to the Argentine Republic by
way of the purchase of her products, the large and constant supply of
capital and the labor of its emigrants? There are many articles of
merchandise and items of machinery in regard to which Europe cannot
successfully compete with the United States, notwithstanding the greater
facilities for transportation; but there are also numberless articles
of American production which could find a ready market in Argentine if
the surrounding conditions approached a greater measure of equality.
An analysis of the figures of the foreign trade of the Argentine
Republic for the past twenty years establishes the fact that the United
States is in a position to successfully compete with Europe in many
lines far beyond the limits already reached; and there is certainly no
lack of effort or inclination on the part of American manufacturers to
enter into such competition. It is therefore reasonable to assume that
there are other causes operating to check a growth in the volume of
American trade with the Argentine Republic.
There are no laws in the Argentine Republic, either of a fiscal or
domestic nature, which are calculated to affect ruling market prices, or
which admit of inequality of treatment. Tariffs are based upon a
reciprocal policy, the tariff laws of the Argentine Republic being so
framed as to permit the Executive to relax and reduce in favor of those
countries which accord similar treatment to her national products.
Credits are intrinsically sound and in ordinary periods are usually
regulated with foreign countries by purchase at ninety, or one
hundred-and-twenty days' sight drafts. In the discussion of this point
it may also be urged that the statements so generally made in regard to
the alleged long credit demanded by Argentine buyers owe their origin to
the conditions prevailing in regard to shipping matters in days gone by,
when the steamship services between North and South America were more
irregular and far less rapid than is the case to-day. It was no fault of
the Argentine importer that merchandise was frequently tied up for weeks
together in an American port and that the trip took much longer than it
now does. Yet, those delays caused the exporter to wait weeks and
frequently months longer than was necessary to receive his money. Hence,
the currency of the statement that long credit is an indispensable
condition to trading with Argentine. At the present moment the
Argentine Republic is gradually recovering from the effects of a
financial and commercial crisis brought about through conditions which
it had no power to change; and, in order to secure immediate results, it
may be necessary at the present time to extend the customary terms of
credit, but this may be done with perfect safety and with commensurate
profit if the exporter avails himself of the services created by the
National City Bank of New York and others for the investigation of
prospective buyers.
Irrespective, however, of all other conditions, satisfactory banking and
shipping facilities are essential requirements of an extended commerce
between the United States and the Argentine Republic. The establishment
of an American bank has paved the way for the removal of many of the
difficulties hitherto imposed on the American exporter, but there still
remains the important question of ocean transport. The service of
steamships now in regular operation between North and South American
ports is wholly inadequate to support a rapidly developing trade unless
the ships now running are substituted by vessels of adequate speed and
capacity. To secure this object some provision would have to be made to
cover the increased cost of construction and of operation of the larger
vessels and also to overcome the difficulty of return cargoes.
Practically all of the European steamships trading with South America
carry full return cargoes, but owing to the reasons already given and
principally because of the fact that the shipments from Argentina to the
United States are at present limited to a small number of products, the
services established between North and South America cannot compete in
the matter of freight until they are placed on a similar footing as the
European lines in regard to return cargoes, which, under existing
conditions, are unavailable and must remain so until either the laws or
the needs of the United States will permit of larger and more general
imports from the Argentine Republic.
The figures already given in the relation to the trade of the United
States with the Argentine Republic show a considerable balance, almost
amounting to forty per cent in favor of the former. Now let us see what
are the proportions of Argentine trade with some of the countries of
Europe. Argentine imports from the United Kingdom in 1912 amounted to
$118,669,226, and her exports to $121,373,858. In the same year her
exports to Germany amounted to $53,995,175, and her imports to
$63,941,503. To France the exports were valued at $36,052,009, and her
imports $37,618,578. To Belgium her exports totalled $37,258,225, and
her imports $20,370,530. These figures speak for themselves and taken in
conjunction with the other solid inducements offered by the countries of
Europe in return for the benefits of a larger trade with the Argentine
Republic, should form a subject for serious consideration in the effort
to secure for the United States a proportionate share of Argentine
commerce.