Produced by Adrian Mastronardi, René Anderson Benitz, and
the Online Distributed Proofreading Team at
http://www.pgdp.net (This file was produced from images
generously made available by The Internet Archive/American
Libraries.)
Transcriber's Note: Obvious typos have been amended. Variations in
spelling in the original text have been retained, except where usage
frequency was used to determine the common spelling. These amendments
are listed at the end of the text. Minor printer errors have been
amended without note.
* * * * *
PUBLICATIONS OF THE UNIVERSITY OF MANCHESTER
ECONOMIC SERIES--No. IX.
GARTSIDE REPORTS ON INDUSTRY AND COMMERCE. NO. 6
_The Argentine as a Market_
SHERRATT & HUGHES
Publishers to the Victoria University of Manchester
Manchester: 34 Cross Street
London: 60 Chandos Street, W.C.
[Illustration: (graph of imports, exports, and population)]
The Argentine as a Market
A REPORT
_To the Electors to the Gartside Scholarships on the Results of
a Tour in the Argentine in 1906-7_
BY
N. L. WATSON, B.A.
_Gartside Scholar_
MANCHESTER
AT THE UNIVERSITY PRESS
1908
UNIVERSITY OF MANCHESTER PUBLICATIONS
No. XXXIII.
THE GARTSIDE REPORTS.
The Gartside Reports are the reports made by the Gartside Scholars at
the University of Manchester. The Gartside Scholarships were established
in 1902 for a limited period, by John Henry Gartside, Esq., of
Manchester. They are tenable for two years and about three are awarded
each year. They are open to males of British nationality who at the date
of the election shall be over the age of eighteen years and under the
age of twenty-three years.
Every scholar must enter the University of Manchester for one Session
for a course of study approved by the electors. The remainder of the
time covered by the Scholarship must be devoted to the examination of
subjects bearing upon Commerce or Industry in Germany or Switzerland, or
in the United States of America, or partly in one of the above-mentioned
countries and partly in others, but the electors may on special grounds
allow part of this period of the tenure of the Scholarship to be spent
in study and travel in some other country or countries. It is intended
that each scholar shall select some industry, or part of an industry, or
some business, for examination, and investigate this comparatively in
the United Kingdom and abroad. The first year's work at the University
of Manchester is designed to prepare the student for this investigation,
and it partly takes the form of directed study, from publications and by
direct investigation, of English conditions with regard to the
industrial or commercial subjects upon which research will be made
abroad in the second year of the scholarship. Finally, each scholar must
present a report, which will as a rule be published.
The value of a Scholarship is about £80 a year for the time spent in
England, £150 a year for time spent on the Continent of Europe, and
about £250 a year for time spent in America.
EDITOR'S NOTE.
MR. N. L. WATSON's sudden departure to fill a commercial position in the
East has prevented him from seeing this Report through the press
himself.
TABLE OF CONTENTS.
PAGE.
Chapter I. The Economic Basis of the Argentine 1
" II. The Railways 6
" III. Industries and the Labour Question 12
" IV. Foreign Capital and Public Debt 16
" V. Argentina from the Immigrant's
Standpoint 20
" VI. English Trade. Its Position and
Prospects 25
" VII. The Tariff 41
Statistical Appendix 53
CHAPTER I.
THE ECONOMIC BASIS OF THE ARGENTINE.
The first thing that strikes the new arrival in the Argentine, and the
last thing that he is likely to forget when he leaves the country, is
the extraordinary inflation of prices. With the exception of meat, and
perhaps bread, there is no article of common consumption which does not
cost considerably more than in England, every allowance being made for
freight and tariff charges. The reason for this excess is doubtless to
be found in the concentration of trade in the capital. All imports, for
reasons that will be dealt with later, pass through the hands of the
large houses in Buenos Aires, who act as sole agents for the whole of
the Republic north of the Rio Negro. [While, owing to the precarious
nature of all business, dependent entirely on the grain and cattle
yield, much higher prices are charged in fat years than would be
justified if these times of prosperity were regarded as permanent.]
Because of this concentration of business in the capital, and in the
centre of the town in particular, rents have risen to an immense extent,
greatly increasing all establishment charges, and in turn the price of
commodities sold--a cause which acts again of course in retail trade and
neutralises the freight charges to outlying districts. But the essential
fact in Argentine Economics, and one which seems more than obvious, but
apparently escapes the comprehension of Argentine legislators, is that
the country is naturally, and must remain for some considerable time, a
producer of raw material exclusively. The country is still considerably
under-populated for the development of its natural resources, while
only a small portion of the settled area is yet producing even half
the yield of which it is immediately capable. Immigration of a certain
class--capable agriculturalists with some capital--is still required.
But with a strange perversity politicians have persistently advocated
a high protective tariff for the purpose of fostering industrial
development. The result has been that certain industries have cropped up
under this system, which are quite incapable of independent existence,
and, while satisfying neither the employers nor their men, constitute a
very heavy drain on the national purse. The chief objection, however,
to the policy is that it invites a class of immigrant who is really not
required in the country and who has taken to settling in the capital
instead of scattering into the camp.
The immigrant required is the "colonist," to whom the country is already
beginning to owe much of its prosperity. There are two distinct types of
colonist--the one who buys his land on a permanent colony, and builds a
decent house, and the temporary tenant whose economic principle is to
break the soil of new land, and moves to a new district at the end of
his term. The latter owes his origin to the cultivation of "alfalfa,"
the wonderful clove-like plant that will grow on sand, and requires no
rain, but thrives on the surface water which abounds in the country's
flat, low-lying plains. Alfalfa will not grow in hard unbroken ground,
and where the land is such, cereal cultivation is necessary for three
years to reduce it to a fit condition. This work requires labour which
is not available among the gauchos, the horsemen who act as hands on
the estancias, and the estanciero himself probably does not possess
the knowledge requisite for the cultivation of grain. A contract is
therefore made with colonists, usually Piedmontese or Basques, to break
the soil and grow cereals for three, or more usually five, years, either
at a fixed rent or for a percentage of the crop, the stipulation being
that with the last year's seed alfalfa is sown as well. When the last
crop has been cut, the latter grows through the stubble. The growth of
this plant is such that as alfalfa is more cultivated, the stock-bearing
capacities of the country will easily be trebled.
The main supports of the country are, therefore, cereals and cattle, the
latter being undoubtedly the more profitable investment, but requiring a
much larger capital. By Argentine, as by French, law property at death
is compulsorily divided, and this tends to split up the now immense
tracts of land occupied by individuals. Whatever the social advantages
of such a system may be, it is not conducive to the most economic
working, nor yet to the breeding of the finest strains of stock, for
which a large capital is required. A form of evasion, however, has been
found in the formation of limited liability companies, often private,
to run big estancias. These have everything to recommend them from the
economic point of view. A capable manager is put in charge of the work
on the spot, and, as capital is usually forthcoming, the estancias are
run in such a way as to yield the greatest possible return. They are
usually well-maintained, up-to-date in management and fittings, and
supplied with good home-bred strains.
There are, however, other natural sources of wealth in the Argentine;
notably, the forests of hard-woods (of the acacia order) which abound
in the Chaco, in Corrientes and Entre Rios, and are also found in the
province of Córdoba and elsewhere; the sugar industry in the north-west
(of which more will be said under "The Tariffs"); the hitherto
undeveloped fruit cultivation in all parts of the country (this in
the sub-tropical and central provinces would be especially liable to
suffer from the depredations of locusts); perhaps, too, cotton growing
in the Chaco, where, however, the supply of labour is much questioned,
and some pests peculiar to the cotton-bole are reported as existing;
and, lastly, the minerals, as yet wholly undeveloped. Although these
are undoubtedly much more scarce than in Bolivia and Chile, the absence
of an impartial geological survey has rendered the flotation of bogus
companies easy, and practically prevented any genuine development, in
spite of their greater accessibility than in the former country. The
recent boom and collapse in gold ventures was the result of stock
exchange transactions, probably fraudulent, as, with the exception
of the sea-bed to the very south of the country (where it cannot be
recovered), gold is probably one of the few minerals which does not
exist to a workable extent.
A curious feature in the Argentine is the absence of navigable rivers.
With the exception of the treacherous Paraná and the Uruguay, enclosing
the provinces of Entre Rios and Corrientes, there is not a single
waterway, natural or artificial. The result of this has been an enormous
network of railways spreading over the central provinces with isolated
offshoots north and west. The consequent great influx of capital would
naturally have encouraged a large import trade; but the prohibitive
tariff has succeeded in retaining the money in the country, while the
revenue derived has, almost without exception, been uneconomically
employed. The result is that, apart from an occasional monopoly that has
succeeded, the only large gainers from this policy have been the town
property holders.
A large part, however, of the province of Buenos Aires is liable to
periodic inundation, and, to obviate this, an extensive system of
drainage has been planned, a work of great difficulty owing to the
small difference of altitude between the land and the sea. Some canals,
however, are in course of construction of which advantage might possibly
be taken, if they were made of sufficient depth, for local transport.
If this were done, a large and important part of the country would
be provided with a cheaper alternative to the railway. In a volume
descriptive of the Republic (published, in English, by the Department
of Agriculture) this possibility is foreshadowed, stress being laid on
the slight fall from the Andes to the coast, and a scheme, chimerical
on the face of it, of a system of trans-continental canals is vaguely
outlined. But, being so wildly improbable, it seems to have no existence,
even problematical, outside the pages of that advertisement.