BUSINESS PROSPECTS IN ARGENTINA, PARAGUAY, AND CHILE
The object of these travels was not to see the country dealt with
as much as it was to study the business conditions and future
possibilities in those lines in Chile, Argentina, and Paraguay.
Although there are undoubtedly great opportunities at the present time
and in the future to enter into business enterprises in the northern
republics of South America, which as yet, only have their surface
towards development, the republics farther south which are partially
developed, offer better inducements owing to their forms of government,
the character of the races who inhabit them, and the incentives which
are offered to the foreigner who wishes to start a new industry.
With the exception of Argentina and Uruguay there is practically no
manufacturing done on a large scale, such as we are accustomed to see
on all sides in the United States and in Europe. There are many small
industries employing from three to twenty men, providing the employers
with not much more than a good living, and the employees with a mere
subsistence, but there are no really large ones which are a credit to
their country.
To start anything in any of these countries, the matter of prime
importance is for the proprietor and his foreign employees to be able
to converse fluently, read, and write in Spanish. Next he should
understand the character of the Latin races which is not at all
easy if he is prejudiced. Their ways of doing business are totally
different from ours. Also owing to the scarcity of money in some of
these republics, the new firm should have plenty of ready capital, and
should never organize with a limited amount, the outstanding balance
being made up of notes. To sell preferred stock to the natives would be
nearly impossible, because no Latin would buy any unless he is "shown"
first, and this "showing" would have to cover a period of a great
many years, so susceptible are they of making investments. The company
should be entirely capitalized with the cash paid in before the first
stroke of business is begun. Many firms in South America have come to
grief by being only partially capitalized, and their example is always
before the native mind. Competing trusts and grafting politicians
should be reckoned with. Many large firms give as a present to the
governor of a province, or to the deputy in congress, a few shares of
their stock. These men in turn make laws which benefit their company,
and make it impossible for competitors to transact a legitimate
business.
As Argentina offers less opportunities in the manufacturing line than
its neighboring sister republics, it is best to deal with it first. To
begin with, the country is a great expanse of land, for the most part
in appearance a level plain, gradually rising as one travels westward.
This rise is but two feet to the mile and is imperceptible. This plain
is traversed by quite a few rivers, but so slowly does the land rise,
that these streams are nothing more than sluggish watercourses, muddy,
and affording no drainage. They often overflow their banks, forming
muddy ponds and lakes a few inches deep. On account of the slowness
of their flow they are valueless for waterpower. This part of the
country is therefore not adaptable for factories; its sole use is for
the growing of grain and stock-raising. Although this is one of the
greatest wheat belts in the world, it has no flour mills, and but few
grain elevators. The wheat is shipped a long distance by rail to the
seaport towns, whence it is exported to Europe. That which is needed
for local consumption is ground into flour in the seaports which have
mills; much of it is shipped back over the same road that it went out
on to be distributed over the sections where the grain was grown. The
towns here are small and far apart. Their only excuse for an existence
is that they are the distributing points for an agricultural section
and to them the necessities of life are shipped which eventually find
their way to the large estancias as the farms are called. To these
towns grain is hauled to be shipped out by the railroad. Stores spring
up, a hotel or two is built, a few professional men such as doctors
and lawyers establish themselves, but nobody ever thinks of starting a
factory. It would be folly to do so, because there is no future besides
agriculture and stock. There is no fuel, no iron, and no waterpower.
West of the great Argentine plain we reach the mountains. The Andes
here are the highest peaks in all America. They rise abruptly from
the plain like a barrier and have no foothills. There are but few
rivers in this section, and those which do exist are swiftly flowing,
turbulent streams. They can furnish waterpower and some of them do
for electricity. Yet there are no factories. It is again the question
of the scarcity of fuel. So poor is Argentina in her fuel supply that
most of the locomotives burn wood. The coal used for those which run in
the eastern provinces is imported from Europe and the United States.
Oil fields have been opened in Patagonia with a view of decreasing
the price of fuel, but as yet they are in the embryo stage. It is not
known whether they will ever be made an economic asset, because the
quality of the oil is said to be poor. The country at the foot of the
Andes near the latitudinal center of Argentina which is watered by
the mountain streams is called the Zona del Riego. It is here that
are located the extensive vineyards and fruit orchards. There are
three separate belts each of which is fed by its own river. The two
southernmost of these are in the Province of Mendoza, at San Rafael
and Mendoza respectively, while the northern one, is at San Juan in the
province of the same name. Factories which do not require an excessive
amount of fuel could be started, but nobody has ever turned over their
hands in that direction excepting in fruit-canning plants, which have
not paid well.
In the city of Mendoza a flour mill could be made to pay. There are
immense flour mills in Argentina, but with the exception of a few
small ones of no importance and the large one of the Minetti Brothers
at Córdoba, all are located on the seaboard. The Molino del Rio de la
Plata at Buenos Aires has a capital of $14,945,000. It is the largest
in South America. Nearly as large are two flour mills in Bahia Blanca;
Rosario also has a couple of large mills. For a quarter of a million
dollars a flour mill could be established at Mendoza, which the manager
of the Molino del Rio de la Plata, told me would pay forty per cent.
on the capital from the start, and which would be dependent on no other
trade than that of the city of Mendoza. At San Juan, one hundred miles
north of Mendoza, there is a small flour mill which is a lucrative
investment. The beauty of having a mill in Mendoza is the fact that
the wheat grown there, although inferior to that which is grown on the
plains on account of its having to be irrigated, runs forty bushels to
the acre and would be in close proximity to the mill, thereby saving
freight. People in the Province of Mendoza who grow wheat ship their
product to Buenos Aires where it is ground. The flour is then shipped
back seven hundred miles to Mendoza where it sells for a high price,
the freight rate being enormous. Tucumán is a city of over one hundred
thousand inhabitants but has no flour mill worthy of the name. One
would pay in that city but it would require much more capital both on
account of the size of the city and its distance from the wheat fields.
Mercedes, Bragado, Olavarría, Junin, and many other towns of their size
(twenty thousand population and upwards) could all support flour mills.
They have none and are in the heart of the grain belt. Wood would
have to be used for fuel which would be expensive, but the profits
derived from the flour would offset it. Pergamino is a growing town in
the grain belt between Buenos Aires and Rosario, with good railroad
facilities, yet it has not a single manufacturing enterprise. It has
a population of forty-three thousand inhabitants. Personally I think
that the flour mill proposition would be the best paying enterprise in
Argentina. It would pay at all times, war or no war.
One of the leading manufacturing industries in Argentina is that of
the beef-canning factories, here called saladerias. This is the chief
industry of Uruguay, and the second in importance in Paraguay, and
the state of Matto Grosso, Brazil. These saladerias not only can beef,
but they manufacture beef extract, tallow, and the by-products of the
hides and fat. They likewise ship cold-storage beef to Europe and even
to the United States. The River Plate basin is where these factories
are situated, and in no other parts of South America are they to be
found. Armour & Company, and Swift have large ones at La Plata. At
Fray Bentos, in Uruguay, on the Uruguay River a short distance above
where it flows into the River Plate is the great establishment and
headquarters of the Liebig Company, the largest of its kind in South
America and one of the largest in the world. There are beef-canning
plants at Montevideo, at Colon, Argentina, and at many of the ports
on the Uruguay, Paraná, and Paraguay Rivers. These plants require much
capital, especially in Argentina, because here the river is at quite a
distance from the stock country, necessitating the shipment of cattle
by rail. It would be prohibitory as far as expense goes to establish
a beef-canning enterprise inland; by having them at the seaports,
ocean-going freighters can anchor at the docks and be loaded there.
This is true about many of the river ports owing to the depth of the
water which permits ocean steamers to reach them. None of the Argentina
and Uruguayan saladerias are far enough up the rivers to be beyond
ocean navigation. The Uruguayan plants have it on those of Argentina,
because the stock country of the former republic lies directly behind
the saladerias and is contingent to the river. In Argentina the stock
have to be transported to the seaboard upwards of one hundred miles,
and in most cases from two to four hundred miles.
Regarding stock-raising, it is done in Argentina on a large scale.
The large estancias are owned by people who have inherited their lands
through several generations and have in the past decades accumulated
great fortunes which have been sufficient to well stock their estates
with cattle, sheep, and other live stock. The stock roam the prairies
the year around, are not winter fed, and require but little care.
As many of these estancias are forty miles square, the only expense
incurred are the wages of the herders. Land is held high in Argentina,
from $15 an acre upwards in the stock country, the average being
$35 an acre. It would require much capital to buy enough of it for a
fair-sized ranch. Fifteen hundred acres would cost $45,000. If he put
1000 head of stock on it, which would be a small ranch, his outlay
for the investment would be about $90,000. A drought would be likely
to occur and he would be up against it. The man, however, who has a
50,000-acre ranch could make money. He could have 10,000 head of cattle
and if there was a drought he could keep moving them about. Twenty
thousand acres is but a medium-sized ranch in Argentina and Uruguay.
It is not uncommon for a man to have 100,000 acres, while in Patagonia
there are ranches of 1,000,000 acres. Stock-raising is the most
important industry in Argentina, but the men who have made a success
of it and those at present engaged in it, started this business years
ago. Excepting in the Province of Salta, it is well for a company or an
individual to keep out of this line of business unless he has enough
money to buy a large tract of land. The figures here are the average
for estancias contiguous to the average plains towns.
-----------------+---------------+-------+---------+-------+--------
_Town_ | _Ranch_ |_Acres_| _Horses_|_Sheep_|_Cattle_
-----------------+---------------+-------+---------+-------+--------
Olavarría |Santo Domingo | 12,500| 1,000 | 3,000 | 700
|La Victoria | 18,375| 1,700 |17,000 | 6,000
|San Antonio | 12,500| 700 | 2,500 | 1,500
| | | | |
Coronel Suarez |La Curamalan | 43,750| 4,000 | 8,000 | 5,000
|San Jose | 25,000| 400 |10,000 | 300
| | | | |
General La Madrid|La Colina | 80,000| 400 |60,000 | 20,000
|El Huascar | 31,250| 200 | 5,000 | 3,000
|La Fe | 31,250| 300 | 6,000 | 15,000
| | | | |
Saavedra |La Turigueta | 30,000| | 5,000 |
|La Landade | 12,500| | 2,000 |
| | | | |
Dorrego |Tres de Febrero| 37,500| |16,000 | 3,000
|Las Cortaderas | 52,500| |13,500 | 15,000
|La Sirena | 50,000| |20,000 | 16,000
| | | | |
Lobos |La Florida | 3,750| | 3,000 | 1,000
|La Morada | 18,750| | 7,000 | 3,000
| | | | |
25 de Mayo |Huetel |162,500| 2,000 |10,000 | 15,000
|Santa Clara |100,000| 1,000 |10,000 | 1,500
| | | | |
Bolivar |La Carmelita | 87,500| 80 |17,000 | 14,000
|La Florida | 43,750| 1,000 |12,000 | 5,000
|Miramar | 25,000| 150 | 2,000 | 600
|El Cardon | 18,750| 250 | 7,000 | 3,000
|Bella Vista | 12,500| 300 | 5,000 | 2,000
| | | | |
Junin |La Pastoril | 37,500| | | 15,000
|El Cisne | 75,000| | | 25,000
|Las Dos Marias | 6,250| | | 4,000
The Province of Salta is about one thousand miles from Buenos Aires and
the seaport towns. On account of its distance and nature of its land it
has nothing in common with the provinces farther south. It is a hilly
and mountainous region bordering on the tropics abounding in forests
which have a thick matting of grasses. The cattle are large and lean,
and although their beef is rather tough, there is plenty of it, and
there is but little shrinkage in transportation. The market for this
stock is the nitrate region of Chile. The cattle are driven across the
Andes and lose but little weight on the way. In Antofagasta they bring
a good price. There are no large ranches in the province and there is
not much capital. Here a man with moderate means could raise stock at
a profit, if he dealt only with the Chilean market. If he shipped them
to the saladerias in the Province of Buenos Aires he would lose money
on account of the freight.
An embryo industry in Argentina is that of tannin or tannic acid, used
for dyeing and tanning. The northern part of the provinces of Santiago
del Estero and Santa Fé, and the greater part of the territories
of Formosa and the Chaco, are covered with a forest of small trees,
named _quebracho_. They are too small for saw logs, their wood is hard
and is used for fuel on the railroads, and they have a reddish bark.
This bark before the European War was shipped to Germany in great
quantities where its extract was used in dye stuffs. Unfortunately but
little of it was exported to other countries. Some tannin factories
were inaugurated in the Province of Santa Fé, but those controlled
by foreign capital went haywire. This was due mainly to grafting
provincial officials who put these companies out of commission by
their annoyances. A tannin factory would pay in Argentina if the
government would give it protection. It is a deplorable fact that in
many new industries in Argentina, they are induced to locate there.
Once established, the manufacturer is subjected to a burdening taxation
from the federal government, the province, and the district. There
is a continuous drain of contributions which have to be handed to
congressmen, and their henchmen; titles are found to be imperfect; law
suits are started; the outcome is that the company is apt to go into
insolvency. This once happened to a large tannin factory that started
in the Province of Santa Fé. A Buenos Aires bank loaned them money; but
the owners ran up against so many snags when they started to operate,
that they were unable to pay their indebtedness and the bank had to
foreclose. It would be a different story if the company was Argentine
owned. The Argentino from the highest to the lowest looks upon the
North American as a person to exploit from. They welcome him mainly to
relieve him of his money. When we talk about grafting in our American
cities we do not know what grafting is; one must come to Latin America
to get the interpretation. George W. Crichfield in his two volumes,
_American Supremacy_ (Brentano's 1908), gives the true version. He says
that our best diplomats are to the South American ones in comparison as
what jackasses are to foxes. This is particularly true about Argentina
and could apply to the grafting officials as well. Although under
proper government protection, a tannin factory in Argentina would
pay, it would be useless to wait for that protection to come, and the
manufacturer would be far better off if he would start his factory in
poor, benighted Paraguay where the grafting would be much less than in
Argentina.
In Argentina there is no such thing as prohibition and local option,
and there probably never will be. Such issues are not in common with
the Latin make-up, and the long-haired stump orators and hypocrites
who advocate this question in the United States for their own personal
enrichment, would undoubtedly land in insane asylums if they started
this propaganda anywhere in South America. One might think it strange
that there is no whiskey distillery there, yet such is the fact, and
I do not know of any in entire South America. Whiskey is not consumed
there in anywhere near the quantity that it is consumed in the United
States and Great Britain, yet enough is indulged in by the higher
stratum of society who ape the North Americans and the British to
warrant the establishment of one. There is plenty of grain and there is
no competition. There are several liqueur factories which seem to pay,
one of which at Buenos Aires puts out a cordial named Aperital, which
has a great sale.
There are thirteen breweries in the republic, but lest a person
should think of starting another one, he should forget the idea at
the same time that he conceives it. There is a brewery trust heavily
capitalized, composed of Argentine and British stockholders. Much of
this stock is in the hands of senators and congressmen, who see to
it that laws are made which protect them and work to the detriment of
their competitors. The Argentine Brewing Company at Quilmes, a suburb
of Buenos Aires, heads this trust, the other members of which are the
Bieckert Brewing Company at Llavallol, another suburb of Buenos Aires,
the Palermo Brewery at Buenos Aires, the San Carlos Brewery at San
Carlos, and the Del Norte Brewery at Tucumán. Those not belonging to
the trust are the Córdoba Brewing Company at Córdoba, the Rio Segundo
Brewing Company with breweries both at Córdoba and at Rio Segundo, the
Ahrens Brewery at Córdoba, the Santa Fé Brewing Company at Santa Fé,
the Schlau and the Germania Brewery at Rosario, and the Correntino
Brewery at Corrientes. Both the Ahrens and the Correntino breweries
are small establishments and only cater to local and family trade and
therefore have not fell foul of the trust.
Since much beer is drunk in Argentina I have often wondered why there
were no more breweries. I wondered why Mendoza, Salta, Bahia Blanca,
Mercedes, Pergamino, Paraná, Concordia, and other towns did not have
any. I mentioned this fact to the mayor of Salta. "It would not pay,"
said he. "An old German named Glueck once had a brewery in this town,
whose product took well with the public. His was a small brewery with
limited capital. The Quilmes Company, through their representatives in
congress, had taxes formulated so that only those breweries with much
capital could stand up under them. Glueck had to go out of business.
The trust then built the Del Norte Brewery in Tucumán which is so large
that if all the other breweries in Argentina should shut down, it could
supply the whole republic with beer. The trust also bought a piece of
property in Salta and threaten if another brewery starts up in this
city to put up one that will swamp it. The trust has millions of pesos
capital, so what can one do?"
While in Córdoba I was a guest of Mr. Douglas, president of the Rio
Segundo Brewing Company. This company started a brewery on a small
scale at the town of Rio Segundo, hence the name. The water used for
the manufacture of its beer came from an artesian well, and the product
was so superior to that of the other breweries that it was necessary
to build another brewery, which was done at Córdoba, twenty-three miles
away. The water in this is also artesian. The output of the Rio Segundo
Brewery at Córdoba is only sixty thousand barrels a year, but it is
taxed more than those whose output is six hundred thousand barrels
in the United States. It has kept its head above water on account of
the quality of the beer. A former brewmaster of this company started
a small brewery in Corrientes, the Correntino, but this like that of
Ahrens at Córdoba have not been molested by the trust because they
are too small to interfere with the business of the Quilmes Company.
With the exception of the output of the Rio Segundo breweries, all the
Argentine beer is vile and not fit to drink. Hops are difficult to get,
and injurious chemicals are used for its preservation.
Two automobile factories have been started in Buenos Aires but their
existence was of but a short duration. The parts were shipped there
to be assembled, but the stockholders thought that it would be more
lucrative if they manufactured their own parts. Since there is no iron
in the republic, it was found that its importation was too expensive to
allow the companies to ship it in, therefore they went out of business.
Hides are not expensive. There are many small so-called shoe factories
which in reality are but shops; the shoes manufactured in them are
good and cheap, and are made by hand. They likewise have class, and
a shoeman from Toronto told me that the shoes manufactured there were
superior to ours, and the United States has the reputation of making
the best shoes in the world. This Canadian said that he could see no
reason why a fair-sized shoe factory would not pay in Buenos Aires and
was very optimistic about the idea.
In the Province of Tucumán there are considerable sugar factories, some
of them large ones. The cane is inferior to that of Cuba and the West
Indies; most of the available land for its growing is taken up, and
the sugar market is often poor. None of the sugar is refined in the
district where it grows, there being only one refinery in Argentina
and that is at Rosario. The product is shipped to England and France
to be refined. It is doubtful if another mill would pay, but another
refinery and that in the city of Tucumán might be profitable. There
are no beet-sugar factories, but much of the land, especially that in
Entre Rios and Corrientes, is adaptable for beet culture, so there is
no reason why an establishment of that kind could not be made to pay.
Although Argentina has a great network of railways running throughout
the republic so that practically no place of any importance is in
lack of transportation facilities, yet interurban street-car lines
are nonexistent. The only one in operation is that which runs between
Buenos Aires and Quilmes, a distance of fourteen miles. One is being
built to Tigre, twenty-two miles from Buenos Aires, but is not yet in
operation. There should be electric lines between Buenos Aires and La
Plata, Buenos Aires and Rosario, either via San Nicolás or Pergamino,
Buenos Aires and Mercedes, Bahia Blanca and Puerto Belgrano, Mendoza
and San Rafael, Tucumán and Tafí Viejo, and also a network of lines of
which Tucumán should be the center of the hub.
There are quite a few cigarette and a few cigar factories. The
cigarettes manufactured are vile, likewise the cigars. This trade is
in the hands of Turks, Spaniards, and Italians, and the tobacco used
is grown in Brazil. There are good tobacco lands in the provinces of
Salta, Jujuy, Corrientes, and in the Territory of Misiones, but none is
grown excepting in gardens from which the owner makes cigars for his
own personal use. The price paid for cigars is exorbitant and a good
live factory well capitalized might pay. Nobody smokes a pipe nor chews
tobacco, therefore a tobacco factory would be unsuitable.
There is no field in the newspaper or periodical line in all South
America. This and the publishing business is overdone. Some towns of
ten thousand people have four or five daily papers. Every politician
that can afford it is the proprietor of his own newspaper, in whose
columns he attacks everybody who does not hold his own political views.
These newspapers often run foul of the government and wind up by having
their publications suppressed and the editor thrown in jail.
Paraguay, on account of its small population and scarcity of money,
offers a much less diversified variety for future enterprises than
does Argentina. The leading industry is the culture of yerba maté,
and the exportation of its leaves. This republic lies close to the
tropics and is covered with a dense vegetation. In the southeastern
part of the country in the neighborhood of the Alto Paraná River, there
grows in its native state the plant yerba maté, from whose leaves from
time immemorial the Indians brewed a tea. The leaves are first dried,
and then steeped in a kettle or pot. Calabash gourds grow wild in
abundance. These are dried, the top is cut off, and the insides scooped
out. The hot tea is poured into these gourds which every individual
possesses, and the infusion is sucked from them by means of straws and
reeds, by the poorer classes, and by bombillas by the upper and middle
classes. A bombilla is a metal tube with a small covered spoonlike head
which is perforated with small holes. This maté drinking habit, which
is considered beneficial, is indulged in universally by everybody in
Paraguay, Argentina, Uruguay, and southern Brazil. There are several
different varieties of yerba maté, and it has been found that that
which is cultivated is better than that which grows wild. Hence there
are enormous plantations for its culture which are called yerbales.
Large companies have been formed for its production and exportation,
that of Domingo Barthe being the best known. His brand is named
Asuncion. The next best-known firm is the Industriel Paraguaya. Both
are capitalized heavily and have their main offices in Asuncion and
Villa Encarnacion with branch offices throughout Argentina. Barthe is
a very wealthy man; he was formerly a French adventurer who struck it
rich through none too scrupulous means. His latest trick was to sell
a lot of his maté under the trademark of the Industriel Paraguaya.
This was done at Rosario. He was tried there and found guilty. He
was sentenced to one year in jail and to pay a fine of two hundred
thousand dollars. Before they could get him, he got into Paraguay
where he is immune from the Argentine law. He owns a fleet of steamers
plying between Montevideo and Asuncion which touch at Argentine ports.
On these he is safe since his steamship line is not incorporated
in Argentina. Nevertheless Barthe has helped advance progress and
industry in Argentina and this should not have been overlooked when
sentence was pronounced upon him. At that time he was about to build a
million-dollar hotel at Posadas. Although what he did was unprincipled,
his sentence was twenty-fold too severe, and shows plainly that the
Argentine bloodsuckers are out to exploit the foreigners for every cent
they can get out of them.
There are in Paraguay boundless tracks of virgin soil suitable for
yerbales. It requires but little expense to work them and there is
an unlimited market for Paraguayan tea. It is said that the Argentine
army is going to adopt yerba maté to be distributed among the soldiers
for their daily rations. This tea-drinking craze among the natives
is uncanny. To many of them it is life; the foreigner, however,
rarely acquires the habit, although he partakes of it for the sake of
sociability while in Paraguay.
Next in line among Paraguay's industries is the saladerias. The
whole country covered with a thick matting of grasses is a paradise
for cattle. Land is inexpensive, the pasturage is better than in
Argentina, and more stock can be raised to the acre. Here and in
Matto Grosso, a future stock country, the grazing lands come down to
the great waterways, and although the river boats are of low draught
necessitating a rehandling at the seaport towns, canned beef can be
shipped direct from the saladerias in the stock country.
Tannin is a more staple industry than in Argentina although it is still
in embryo. The writer had an opportunity to engage in this manufacture,
which he nearly took up; in ordinary times it would have been all
right, but at this particular time there was a change in Paraguayan
politics and the manufacture of tannic acid was handicapped by the
European War. A Barcelona Spaniard, Señor Andres Pujol, president of
the Banco Constructador del Paraguay and a friend of the writer, was
held in high esteem by the then dictator, Señor Eduardo Schaerer.
One of the large brick buildings owned by the Hernandarias and Frias
Brewery at Puerto Sajonia, on the outskirts of Asuncion, was vacated
in favor of a modern brewery plant in the city. Its machinery could be
used in the manufacture of tannic acid and the plant could have been
bought for a song. It was the idea of Señor Pujol for he and myself to
buy this building and erect, in connection with it, a sawmill. We were
to pay for quebracho logs delivered at the plant from which we were
to strip the bark, from which we were to extract the tannin. At that
time Asuncion was having most of its new streets paved with quebracho
blocks. We were to give Señor Schaerer stock in the company and in
return he was to give us a franchise to furnish the paving material
which we would manufacture by cutting up the logs at the sawmill. We
were also to be exempt from taxes for a number of years. Soon after
this Schaerer was succeeded in the presidency by Dr. Manuel Franco, a
native, and it was likely that he would undo everything that Schaerer
did, in which case our franchise would not amount to a picayune. This
combined with the present prospects of no shipment of tannic acid to
foreign parts caused me not to inaugurate this enterprise, which will
still be open to anybody. The best time to start this is soon after
the election of a popular president, because in the four years during
which he will hold office, there will be plenty of time in which to
accumulate a fortune.
The future manufacturing and commercial opportunities in Chile is
utterly different and far brighter than in any other South American
country. Chile has a decidedly bright future and at the present time
only lacks capital to develop her resources. Business conditions are
much better; there is more snap to her people; there is less graft
and it is a cheaper country to live in. To this is added the fact that
the climate is good. Topographically and geographically this republic
can be divided into three distinct zones. Beginning at its extreme
north and running down the coast one-third of its whole longitude is
the rainless zone. This is a vast forbidding desert, interspersed at
varying distances by a few oases. The mountains begin at the ocean
and gradually rise in steep ranges until a maximum of twenty thousand
feet is attained in a hundred and fifty miles at the eastern boundary
which is the Argentine frontier. Twenty miles back from the ocean are
plateaus averaging from two thousand to five thousand feet high which
furnish most of the world's nitrate supply. This nitrate is from two
to six feet underneath the surface of the soil and is supposed to be
the manure of birds that infested this region in pre-glacial periods.
From these fields is derived much of the wealth of the country. Many
of the older nitrate fields have become exhausted, especially those
farthest north on the Iquique Pampa, but new ones are constantly being
opened up to the south of the old workings and from them is due the
importance of Antofagasta. It was to acquire these nitrate deposits
that Chile declared war upon Bolivia and Peru in 1879 which caused them
to change hands. It is a blessing to that part of the country that it
never rains, because if it did, the nitrate deposits would be washed
away. This zone is hot.
The second zone is that which begins immediately south of the rainless
one and which extends another third of the length of the country down
the coast. It consists of a coast range of mountains timbered with
conifers and small hardwood trees, the mountain peaks rarely rising
above three thousand feet in altitude. Beyond them is the great
longitudinal valley from thirty to fifty miles in width. Here are
situated most of the towns and two thirds of the country's population.
This is the granary of the republic, and it is here that are located
the great vineyards, the fruit farms, and the small manufacturing
industries. This zone has a sufficiency of annual precipitation but
climatically is divided into two seasons, the dry and the rainy one.
During the winter months from May to October there are frequent rains
while the rest of the year it seldom rains, although showers are likely
to occur at any time, these being of more frequent prevalence the
farther south one goes.
The remaining zone which reaches the remaining distance of the coast
line as far as Cape Horn is an archipelago and a narrow strip of land
extending inland about fifty miles to the Argentine frontier. This
district is a mountainous mass, indented by many bays and fiords, well
timbered, but so steep are the mountains that come down to the water's
edge that there are no towns and but few places where habitations can
be built. A great part of this region is unexplored. It undoubtedly is
rich in mineral deposits but its inaccessibility has kept it from being
developed. The annual rainfall is great but this diminishes towards the
southern apex. In winter there are heavy snowfalls, while the tops of
the mountains possess innumerable glaciers.
Chile is rich in minerals. Some of its mines have been worked ever
since the Spanish conquest and new fields are constantly being opened.
In the arid north copper is found behind Gatico and at Chuquicamata,
the Guggenheim interests being at the latter place. There are copper
mines in the provinces of Atacama, and Coquimbo, and at the headwaters
of the Cauquenes River in the Province of Colchagua is the large
productive mine of the Braden Copper Company. There are iron mines at
La Higuera in the Province of Coquimbo and coal mines at Lota, in the
Province of Concepcion. Silver and gold is found throughout the whole
republic in paying quantities. Next to nitrate and minerals, vineyards
play the most important part. From the Province of Aconcagua southward
250 miles, grapes play a great rôle, yet but little wine is exported.
The southern provinces and the Central Valley produce an abundance
of wheat, rye, and barley, but owing to an inadequate market, it is a
gamble whether the farmer will lose or make a profit on his crops.
What Chile needs more than capital is immigration. Her increase in
population has been small, likewise her immigration. The European
immigrant lands at Buenos Aires and seeks employment in Argentina,
while if he crossed the Andes into Chile, he would find a land where
he could make a better living for himself and buy some of the most
fertile land in this universe for a cheap price. Southern Chile has a
large population of German descent who have done remarkably well, but
the great number of Spaniards and Italians who yearly immigrate to the
republics of South America's eastern littoral are here conspicuous by
their absence.
In manufactures, the breweries are Chile's largest industry. There
is a brewery trust in Chile, like in Argentina, but it is nowhere
near so strong nor so well capitalized. It consists of La Calera
Brewery at La Calera, the Valdivia Breweries Company at Valdivia,
the Andres Ebner Brewery at Santiago, the Floto Brewery at La Serena
and the Limache-Cousiño Brewery at Limache, which is the largest in
Chile. A fact which shows that the trust is not strong is that all
the independent breweries have done well. Aubel's Brewery at Osorno,
and Keller's Breweries at Concepcion and Talca are large ones. There
are many small breweries such as Petersen's at Punta Arenas, Julius
Jenson's at Chillán, and Horstmann's at Santiago. Much beer is drunk
in Chile, and there is plenty of grain, so after the war there will be
an excellent opportunity of starting a brewery. The only drawback has
been the supply of malt and hops which comes from foreign countries and
which the brewers have been unable to procure in sufficient quantities
in recent years owing to the freight shortage.
Santiago is a city of over four hundred thousand inhabitants yet only
has two breweries, that of Ebner which belongs to the trust and that
of Horstmann which does not. Horstmann before the war got a supply of
hops large enough to last him six years if his brewery ran at its full
capacity. He is an old man who has amassed all the money he wants,
and his heirs have no inclination to continue the business. In 1917 he
could have been bought out at a very reasonable price and I believe the
same holds true to-day. His business has been a family trade and his
beer is said to be the best in Chile. Since there is small likelihood
of Chile ever going prohibition, here is a chance for somebody.
Valparaiso has no brewery on account of its water being too hard. I
have no doubt but that a brewery at either Chillán, which has only one
small brewery, or at Curicó which has no brewery, would pay. Temuco,
Los Angeles, San Fernando, and Linares could support breweries. In
northern Chile there are no breweries excepting one at La Serena, yet
either Antofagasta or Iquique would be ideal spots for one. The water
in these cities has to be piped in from a distance of 150 miles, yet
since there is sufficient to supply other establishments there would
be enough to supply breweries. Copiapó is likewise well situated for
a brewery. It could be made the central distributing point for other
towns such as Antofagasta, Taltal, Chañaral, Vallenar, and Huasco.
The output could be shipped to its seaport Caldera, and thence along
the coast to the other towns in case of a shortage of freight cars. In
Chile as in the United States the breweries buy saloon licenses to put
into business men who handle only their goods, but unlike in the United
States, saloons play no part in politics, and with the exception of the
sailors' dives in the seaports they are run in strict accordance with
the law. The violations that I have mentioned in this book occurred in
Antofagasta which has the reputation of being a notoriously tough town.
A business with a future and which could be made profitable is an
enamel works and tin-ware factory. In all South America, business
signs, doctors' signs, street names, and house numbers are of enamelled
tin. Most of the kitchen ware, bathtubs, and chamber sets are of the
same article. There is an enamel ware works at Valparaiso and another
one at Santiago. The latter is the Esmaltadera Chilena, managed by Don
Federigo Reddoehl. This would be a paying proposition but so far lacks
capital. The heaviest interest is owned by a senator named Charme, but
the other stockholders could be bought out at par. Chile is dependent
upon the United States for its sheet-iron and tin supply; the war
has put a damper on this, but as soon as shipments can be renewed,
there is no reason why an enterprise of this kind would not be a good
investment.
Unfortunately Chile's timber is hardwood, so lumber mills would not
pay. It is dependent on its lumber for building purposes from the
United States. Although there is much hardwood, the floors are tile or
cement, which is much cheaper there than oak or maple, and since the
ordinary pocket-book cannot afford to pay the price of the latter, a
hardwood flooring plant would be negative.
In the south there are plenty of small flour mills but there are but
few in the Central Valley. Since much grain goes to waste and since
flour is in demand, more of these small mills could be started, but
none of the cities near to the grain supply are large enough to warrant
large mills.
Chile is not a stock country. Cattle are dear, likewise the hides.
Therefore a shoe factory would not pay.
The railroads of the Central Valley are owned by the state and do
not pay on account of it. The personnel is large and is made up
entirely of political henchmen of the senators and congressmen. The
government realizes this and there has been talk of renting the lines
or selling them to private companies. This would be good sense. This
Central Valley is crossed lengthwise by one main trunk-line touching
at the important towns. From these at right angles run branch lines
to places of minor importance. Yet so thickly settled is this valley,
and so productive is it, that another parallel line from Santiago
to Concepcion, touching points not on the government railway, could
possibly be made to pay a profit. From Talca it could run southwestward
through San Javier, and Cauquenes crossing the coast range between
Quirihue and Coelemu at no perceptibly steep grade, opening up a
new country, and saving a distance of seventy-five miles between the
terminals. The country is mostly level and there would be no difficult
engineering feats. The railroad from Santiago to Valparaiso is a
roundabout one and crosses the steep mountain pass of Tiltil. For years
it has been talked of to shorten this line making it go through Casa
Blanca, but the government has had no money for expenditures of such
a sort. I have no doubt but that it would give a private company a
concession if it meant business. An interurban electric line between
these two large cities might pay. It would be eighty-five miles long
and would also open up a new country.
Chile is in need of many first-class modern hotels built on the North
American style, but not cramped for room like in the United States, and
with the guests' rooms large enough for comfort. Santiago, Valparaiso,
and Concepcion have good hotels, but in the other cities they are
poor. It would not pay a North American to build a hotel south of
Concepcion because in that region German influence predominates, and
in many places the German population outnumbers that of the native.
For years to come after the war the North American would be boycotted
there. Antofagasta opens an excellent field in the hotel line. There
are four hotels there where it is possible to sleep and eat, but they
fall much below the standard for such a busy port. The trade is evenly
divided between them, but an up-to-date hostelry could easily shift
that to themselves. Arica is badly off in the hotel line. This is the
port of La Paz, Bolivia, and traveling men to and from that city are
often obliged to put in a few days in this most northern seaport of
Chile while waiting for their steamer. Coquimbo, Talca, and Chillán
need modern hotels, as well as Los Andes. The latter town which has a
population of 8097 is important because it is the jumping-off place for
Argentina. The narrow-gauge railroad from there to Mendoza is of such a
nature that the trip has to be made in daylight on account of curves,
bridges, and steep gradients which would be dangerous to traverse at
night. Passengers en route for Argentina leave Santiago and Valparaiso
in the evening arriving at Los Andes at night where they stop over,
and continue the next morning. The train coming from Argentina arrives
at Los Andes at night and as it is sometimes late, passengers prefer
to stop over there, continuing to Santiago in the morning, rather
than to change trains and arrive at Santiago at an unseemly hour.
The only hotel fit to stop at in Los Andes is the poor one owned by
the Transandine Railway, and it is nearly always overcrowded. It is
a flimsy frame structure, dirty, and with poor service. It is some
distance from the main part of the city, but another hotel built in
its neighborhood would catch all the transient trade, because most
of it focuses there instead of in the town. Rancagua has a floating
population comprised of the mining element from the Braden Copper
Company. Many of these are North Americans and Canadians, and every day
some of them are obliged to stop overnight at Rancagua to get a train
out the following day. Also Rancagua is the station for the Baths of
Cauquenes to which there is constant journeying to and fro during the
summer season. The city has a population of 10,380 irrespective of
transient trade with no hotel fit to stop at.
[Illustration: ARGENTINE PLAZAS DRAFTED BY HENRY J. STEPHENS
PLAZA PRINGLES SAN LUIS
PLAZA SAN MARTIN MENDOZA
PLAZA ARENALES SALTA
PLAZA INDEPENDENCIA TUCUMÁN
PLAZA SAN MARTIN CÓRDOBA]
[Illustration: CHILEAN PLAZAS DRAFTED BY HENRY J. STEPHENS
PLAZA O'HIGGINS CHILLÁN
PLAZA SANTO ALDEA CHILLÁN
PLAZA IN SAN FELIPE
SMALL PLAZA IN TACNA]
[Illustration: SOUTH AMERICA]
[Illustration: CHILE]
* * * * * *
Transcriber's note:
Inconsistent hyphenation and spelling in the original document have
been preserved.
Obvious typographical errors have been corrected.
On page 407, "cue" should possibly be "clue."