TO-DAY AND TO-MORROW IN THE ARGENTINE
Although there is a great deal in South America to appeal to the sense of
the historic, to render the study of the past interesting and profitable,
in the Argentine the past does not greatly engage anybody. There is a
general concurrence with the Oscar Wilde dictum that the best thing about
the past is the fact that it is past. Here and there native scholars
devotedly tend the lamp of History, and from time to time remind the
populace of past events worthy of celebration, whereupon the populace,
nothing loath, celebrates, and every electric light in the country blazes
forth, though it might be difficult to obtain from the average citizen a
really intelligent appreciation of the event thus commemorated.
Speaking broadly, everybody in the Argentine is looking forward; few
indeed are they who pause to take a backward glance. To-day and to-morrow
are the things that matter; not yesterday, nor the day before. And to-day
matters less than to-morrow. I have already mentioned the propensity of
the landowners and venders of “lots” to discount the future in their
sales. This was confirmed to me by various gentlemen acting for large
English and French syndicates in land purchases in different parts of
the Republic. All were agreed that it was well-nigh impossible to find
a landowner prepared to talk business on the basis of current market
values. Yet I was told by those in whose judgment I have the fullest
confidence that agricultural land, enormously though it has increased
in value of late years, is not yet inflated beyond its intrinsic
possibilities. Certain lands examined with the greatest care by two
Australian experts were, they assured me, though offered much above their
present market value, obtainable at little more than half the price of
similar land in Australia. Hence they reasoned that, even allowing for
the likelihood of having to pay more than a legitimate price according
to actual conditions, the possibility of buying agricultural land in the
Argentine which would depreciate in value was very remote.
Mention of these Australian experts reminds me that a very interesting
movement was noticeable in 1912 and has probably increased in volume
since. Owing to the excessive and vindictive restrictions which the
Labour Government of Australia had imposed upon property holders, many
of the large Australian landowners and agriculturists were beginning in
1912 to look abroad for new fields where they might invest their capital.
The Argentine naturally attracted them, similar as it is in many ways to
Australia in soil and climate. The gentlemen above mentioned represented
between them a potentiality of some $20,000,000 of investment in
Argentine lands, and so favourably impressed were they with the splendid
possibilities of the soil that I do not doubt they will yet become—if
they have not already forwarded their negotiations—owners and developers
of large tracts of Argentine territory, the folly of the Australian
Labourists driving their millions of money forth from the land where
it was earned to fructify a foreign country, and incidentally to earn
greater increase for its owners.
It is not to be supposed, however, that everybody who engages in land
speculation in the Argentine makes money thereby. In all countries that
have passed through a period of “land boom” there will ever be a larger
proportion who lose than gain. Many English residents in Buenos Ayres
engage in a small way in land speculation as a “side line” or hobby, with
an eye to the possibility of adding to their incomes. But those with
whom I discussed this matter nearly always concluded by admitting that,
so far as they were concerned, the game was not worth the candle, as the
anxieties incident to the speculation, and the necessity of watching the
market day by day, constituted a serious interference with their ordinary
business, which in the end the profit hardly justified. At the same
time, one heard many stories of fortunes rapidly realised by successful
“deals,” that seemed to make all honest work for payment a futile farce.
Here is one of many instances.
A young English dentist—one of the most lucrative professions in the
Argentine, by the way—was doing very well in Buenos Ayres. He did not own
his premises, nor did he even rent them direct from the owner. He was no
more than a lodger, and possessed only the instruments and appliances of
his profession. But his services were in large request and well rewarded,
so he ventured upon matrimony, his sweetheart going out to be married to
him, as he was too busy to come home. The young wife took with her a
considerable quantity of furniture, including a fine dining-room suite,
the gift of her parents. A house was taken and furnished, and the dentist
still continued to carry on his work at the old address where he rented
rooms. Business continued excellent. Meanwhile, a friend had mentioned
to him that a certain plot of land was for sale in a part of the town
where values were bound to rise. The purchase of this required the total
savings of the dentist, but he bought it. Soon afterwards, an adjoining
plot came into the market, and this he wished also to acquire, but lacked
the capital. Here the young wife suggested that they should sell off
their furniture, for which they could secure a much higher price than it
had cost in England, give up their house, and go into lodgings. This was
done, a good profit being realised on the sale, and the new plot bought.
So, for a year or two the young man went on increasing his property as
he was able, from the profits of his profession. In the course of six
years, the land he had thus acquired had not only increased substantially
in value, but being let out for building purposes, provided him with an
income which enabled him to retire to a beautiful home and small estate
near London. This is no fairy tale of a land vender, but a brief record
of fact, the beginning of which does not date back more than fifteen
years.
[Illustration: THE “RAMBLA” OR PROMENADE AT POCITOS, MONTEVIDEO.]
[Illustration: BATHING-PLACE AT RAMÍREZ, MONTEVIDEO, SHOWING THE PARQUE
HOTEL IN BACKGROUND.]
The tales of fortunes made by the purchase of land in Buenos Ayres
during comparatively recent years, which one heard on all hands, were
bewildering in the dazzling possibilities they held out for “getting
rich quick.” I was shown properties that in ten or fifteen years had
not merely doubled in value, but had increased from five to tenfold. One
particular site I remember near Recoleta, which had been valued at about
$30,000, on the occasion of the owner’s death in 1907, was sold in 1912
for upwards of $200,000. The secretary of an important mortgage company,
that rigidly refrained from all speculation, mentioned to me several
instances in which his company had foreclosed and sold off properties to
recover its mortgages, where, had it bought the property at its auction
price, it would, in the course of a very few years, as events proved,
have earned upwards of 500 per cent. on the capital invested.
With all these alluring facts before me, and with every opportunity
to acquire Argentine land and wait for it to treble or quintuple its
value, I own not one square inch—not even an 8 per cent. or 10 per
cent. mortgage, which I was told was as easy to acquire as a 4½ per
cent. mortgage in England! But, acting on the most reliable “inside
information,” I did become the owner of a considerable number of
Argentine railway shares, and at the time of writing I have the pain of
seeing these being sold on the London Stock Exchange at 30 per cent. less
than I paid for them. This reminds me, by the way, that an old English
lady whom I met in Buenos Ayres, on a business visit to the city, had
brought with her some hundreds of pounds to invest in Argentine railways.
She was much surprised, and not a little disappointed, when I advised her
to take her money back to London, where the shares could be purchased to
better advantage. From bitter personal experience, I can state that on
all financial matters affecting English investments in South America, a
London stockbroker can give one better information than can be obtained
“on the spot.” The Stock Exchange of Buenos Ayres I found ridiculously
ignorant of possibilities in respect to shares of Argentine enterprises
whose registered offices are in London. Thus the investor in Argentine
public companies controlled from London can do a great deal better if he
lives in Hampstead than if he lived in Belgrano.
On the other hand, investment in mortgages and the purchase of land
can only be satisfactorily transacted by those who are resident in the
country or have secured a thoroughly reliable person to hold their power
of attorney. That fortunes are still to be made in land purchase, and
that splendid incomes are being derived from mortgages, are facts that
cannot be disputed, but the nonsense that gets into print in American and
English journals about lucrative investments to be secured by the simple
act of sending out your check and receiving in return fat half-yearly
dividends, is of the most reprehensible character. Some one sent to me
an English daily paper with an article entitled “A Safe Eight Per Cent.
Argentine Investment.” On the face of it, all looked in perfect order,
but on careful analysis, the 8 per cent. dwindled to 6 per cent., after
allowing for bank collection charges and the fluctuations of exchange,
and the investment was in nowise “gilt-edged.”
It may be possible to get from 8 per cent. to 10 per cent. on a mortgage
on agricultural land in the Argentine, but if the mortgagor is resident
in the United States or in England, by the time he has met a variety of
charges for the collection of said interest, the return beyond what would
have been obtainable from the same money invested in a home industrial
concern, is not likely to reach an extra 2 per cent. More, there are
all sorts of little difficulties and peculiar customs to be noted in
connection with Argentine mortgages. For instance, a mortgage that is
continued beyond eight years may become illegal, and repayment be a
matter for the discretion of the mortgagee! It is thus a common custom to
effect a mortgage for five years, with a clause providing that it may be
re-inscribed by the judge for a further period at the end of three years.
An important consideration is the provision that the mortgaged land shall
not be rented for a period longer than the duration of the mortgage.
And in every instance, no matter where the mortgagee may reside, or
even if his land be a thousand miles distant from the federal capital,
he should give an address in Buenos Ayres, as otherwise any question of
legal difficulty is intensified to the point of impossibility. I have
already hinted sufficiently at the difficulties of securing justice in
Argentine Courts, but the absentee mortgagor who becomes involved in any
legal question with a native, resident remote from the capital, and has
not provided for the right to sue that native in the federal capital,
may as well give up hope of securing satisfaction, no matter how patent
his rights may be. There are many other difficulties in the handling of
mortgages which arise to cloud over the bright prospect of investing
one’s capital in that way and so deriving a snug income to keep one in
comfort at home.
Nor is it all that fancy paints it to be owner of land in the Argentine.
Several persons of my acquaintance are in that supposedly enviable
position. In one case a lady is receiving upwards of $10,000 a year from
a piece of property, exactly the same as her sister ten or twelve years
ago sold for a sum that does not yield her $1000 per annum in a 5 per
cent. investment. This lady is one of the fortunate. A gentleman owning
a far larger property has had to spend as much as eighteen months of his
time at a stretch in the Argentine trying to let it to advantage, and
has suffered all sorts of losses from bad tenants. Yet the gentleman in
question is a well-known authority on Argentine land, and in his time
must have bought and sold property aggregating many millions of pesos.
He is now resident in England, and if anybody goes to him for advice
about investing money in Argentine land (except as a shareholder in a
land-investment company), he will pronounce an emphatic “Don’t.”
During my stay, there was every evidence of a coming “slump” and since I
left it has come with a vengeance. Old-established firms which hitherto
had enjoyed the highest reputation for stability have gone bankrupt in
dozens. This was entirely to be expected; was inevitable. I have already
given sufficient reasons to show why the country must from time to
time pass through financial crises; that of 1913-14 is no more than a
momentary pause in its onward progress. It has been largely influenced
by conditions of universal depression, for in the world of finance, even
more obviously than in that of humanity, “We are every one members one
of another,” in the Pauline phrase. The Argentine, whose development has
depended entirely upon European faith in its possibilities, whereby
colossal sums of European capital have been placed at its disposal, has
suffered from a sudden tightening of the European purse strings. It is
like a young, go-ahead business, which has gone ahead a trifle too fast
for its financial resources, and, unless it can raise some fresh capital,
is in imminent danger of bankruptcy. Thoroughly sound at bottom, nothing
can well stay the progress of the Argentine, and the millions of European
gold that have been poured into it have served to create new sources of
wealth, whose ultimate increase an hundredfold is as certain as most
things mundane.
Apart from natural risks, such as failure of crops from drought,
excessive rains, or locusts, destruction of cattle and sheep in millions
from protracted periods of heat, there is another danger to which the
Argentine is peculiarly exposed. That is the lack of a settled policy
in agriculture and cattle-raising. So many of the estancieros are still
experimentalists, that they are apt to show a certain affinity with their
sheep in following the mode of the moment rather than in maintaining an
individual and well-conceived working policy for their lands. From all
that I could gather, the country is essentially one for stock-raising.
In the early colonial days, so stupendous were the herds of wild cattle
roaming the plains, that settlers were permitted to possess themselves
of three thousand head—but not more! This will indicate how cattle may
multiply on these sunny plains.
It is doubtful if there is in all the world a similar territory so
admirably adapted for stock-raising, and on its live-stock its modern
prosperity has been based. But, not content with the profits derived from
this great business, estancieros during more recent years have turned
their attention to agriculture rather than to cattle-raising. The reason
for this entails but little searching. Provided huge crops of grain may
be secured from land which else were pasturage, the relative profits are
vastly greater. Hence it became the fashion to devote more attention to
agriculture and less to cattle. With what result? The most deplorable.
During 1912 and 1913, the public press was voicing the national alarm
at the tremendous decline in _ganadería_. In such wise was the supply
of cattle shrinking that large numbers of cows were being sent to the
meat chilling establishments (_frigoríficos_) to fulfil contracts. The
destined mothers of future herds were being slaughtered. The Argentine,
whose supplies of cattle ought to be without limit, was actually in 1913
importing live-stock from the neighbouring Republic of Chili, where the
cattle industry is comparatively in its infancy!
Here is a state of things that might well spell disaster. It is primarily
the result of the imitative habit in following a new craze, and the lack
of an established policy.
If alongside of this declining activity in stock-raising there were
an enormous countervailing increase in agriculture, there would be no
occasion for criticism. But owing to the uncertainty of the seasons,
agriculture must remain in the Argentine—at least until “dry farming” has
been perfected—a more speculative industry than cattle. Government has
recently taken measures to establish the North American dry farming,
and this may go some way to insure the agriculturist against seasonal
conditions which at present make him a highly nervous observer of the
barometer. Even so, and admitting that the agricultural possibilities of
the country to be enormous, its essential industry, that which nature
seems to have marked out for it, is cattle-raising. So, after some four
or five years of crop failures, and faced with a scarcity of animals,
estancieros are again feverishly turning their attention to live-stock.
The imminent danger is that in making haste to recover their pre-eminence
in cattle-raising, they may undo something of the progress they have
made in agriculture. And so they see-saw from policy to policy. This is
bad, and so long as it continues we shall see these periodic panics. A
more settled system is bound to emerge, more individualised, and based
upon a nicer appreciation of local conditions, for the climate differs
throughout the Argentine as widely as it does between the South of Spain
and Siberia.
The future prosperity of the country is not a matter of doubt to any
person who has travelled across its fertile plains, but all Argentine
prosperity, whether of to-day or to-morrow must rest upon agriculture
and cattle-raising, the latter, perhaps, bearing the greater proportion.
Here lies its limitation. He is no true friend of the Republic who paints
highly coloured pictures of a coming day when workshops in the great
cities will hum with myriad crafts, and industries flourish as we see
them now in the great industrial centres of the Old World and the United
States. The mechanical arts and sciences will be relegated to a very
humble position in the Argentine activities of the future, as they are
in its industrial life to-day. You cannot make bricks without straw, nor
can you work machinery without power. If the Andes were made of solid
coal, still would the progress of the Argentine be slow in the textile
and mechanical industries. It would cost more to carry the coal to the
Atlantic seaboard, where the industries must needs have their centres,
than it now does to bring coal thither from England to-day. But there is
no reason for supposing that the Andes contain coal in any considerable
quantities, while we do know that the only coal beds at present being
worked on the Chilian side with some degree of success produce coal of so
inferior a kind that it is only useful for mixing with imported coal.
Already I have had occasion to point out these limitations, and here I
do no more than reassert that in my opinion the future of the Argentine
is indissolubly bound up with the proper adjustment of its two great
national industries. Nature has intended it to rear cattle almost without
limit, and to produce grain for the teeming populations of Europe, and
it never pays to fight against nature. It may be that some day rich gold
deposits shall be discovered in still unexplored corners of the Andes,
where we know that copper, tin, and silver are to be found in abundance.
But in these things there is no permanence. For a generation or two, gold
discoveries might modify a country’s progress, and might eventually do a
great deal more harm than good, as it is to be feared the rich nitrate
fields, of Chili will yet do to the sister republic. The real gold is
the fruitful soil, and this is the Argentine’s ample dowry.
[Illustration: MAIN BUILDINGS OF MONTEVIDEO UNIVERSITY.]
[Illustration: THE SOLIS THEATRE, MONTEVIDEO.]
The future of a country, however, is not merely a question of commercial
possibilities. In treating of all new and essentially commercial
countries, the tendency is to forget that there are other factors to be
taken into consideration. The immediate past of the Argentine had very
little to do with commerce. Its history is little but a story of more or
less sanguinary squabbles between political parties, or the struggles of
individuals to secure a temporary ascendency over the mass. It is really
not an inspiring story, the political development of the Argentine, or
of any South American Republic. It has its great moments, but they are
few compared with the long unedifying periods of petty bickerings. All
that, the Argentine put behind it when it suddenly awakened to the fact
that if it behaved itself it could secure substantial loans of European
money wherewith to develop its resources and so enrich its citizens.
The revolutionary era is past, not entirely because the spirit that
informed it has disappeared, but because other considerations of personal
prosperity are now involved in any movement that would tend to discourage
the faith of foreign financiers in the country’s future. The energy which
found expression in the days of revolution has not ceased to exist, but
has suffered a change and, transformed, it is at work in the political
world of to-day, either for good or for evil. On the whole, I think for
good, if I have read the signs of the times correctly in my endeavour to
define “the spirit of the country.”
Only the youthful jingos foresee for the Argentine an imperial era, with
the country lording it over heaven knows what other countries of old
Earth. The sane and stable mind of the nation is set upon the development
of sound nationalism, the welding of the whole cosmopolitan population
into a composite people. Such dangers as beset it are very similar
in kind and degree to those that vex European politics—international
jealousies. Brazil and Argentina do not understand each other any
better than Britain and Germany; and probably less. When in April
1912, ex-President Roca went as Argentine Ambassador to Brazil, and
ex-President Campos Salles as Brazilian Ambassador to the Argentine,
there seemed to be a wiping out of old jealousies, but these will only
completely disappear with increase of intercourse between the two
republics, and conditions are not markedly favourable to that, as a
curious feature of the political life of these Latin-American peoples is
that all maintain a more direct intercourse with the Old World than with
one another.
Although the Argentines under San Martín helped the Chilians to throw off
the Spanish yoke, there lingers something of old rivalry and distrust
between the two nations, notwithstanding such diplomatic courtesies as
each government presenting the other with a fine house for its embassy in
their respective capitals. Peru and Chili, too, while making much parade
of cordial relationships, are still existing in a state of veiled enmity.
In fine, South American politics are just as full of international
jealousies and complications as those of Europe, and the Argentine, as
the most progressive of these powers, must depend upon her strength and
preparedness for the maintenance of her position among them. The Christ
of the Andes, that giant statue on the Cordillera frontier of the two
republics, is a pious expression of the hope that Chili and the Argentine
may never go to war again, but we know that these pious expressions
are no more binding than inconvenient treaties. Hence the question of
armaments is an important one with most of the republics—with Chili
probably most of all, but only in a lesser degree at present with the
Argentine.
There is another reason for this, and one which in Europe is little
understood. The North American menace. While the Monroe doctrine is
not entirely despised among the Latin Republics, the Drago doctrine,
formulated by the great jurisconsult of Buenos Ayres, which asserts
the independence of their nationalities and maintains the principle
that no power by force of arms may impose itself upon any of them,
is much more acceptable to Latin America. The Republic of the United
States, comparatively little known, and exercising very small influence
throughout South America, is looked upon with increasing suspicion. The
making of the Panama Canal, instead of appealing to South Americans as a
great new factor in their economic lives, is viewed in many quarters as
the first step towards attacking their existence as independent nations.
The United States are suspected of an aggressive policy towards the
South, and with such diplomatists as Mr. Theodore Roosevelt publicly
stating at Rio that the United States, in alliance with Brazil, could
dominate the whole western hemisphere, the road to a better understanding
is not made unnecessarily smooth.
The great protagonist of the “anti-Yankee” movement, which is steadily
gaining ground throughout all the republics, is a Buenos Ayres gentleman
of some local celebrity as a litterateur, Dr. Manuel Ugarte. He has
stumped the whole of South America, and everywhere he has been received
with open arms. As a prophet, he warns the nations of the danger that
threatens in the North; he sees in the Panama Canal an instrument
deliberately prepared by the United States, not so much for her own
commercial expansion, but the better to impose _yanqui_ authority on
the Southern Continent. He has no difficulty in making out an excellent
case, as he need do no more than quote from some of the ravings of those
American senators who publicly talk of “one flag from Pole to Pole and
from Ocean to Ocean.” A South American politician may be excused if he
does not readily discriminate between such insensate bombast and the
saner United States opinion which realises very well the impossibility
of bringing the mighty Southern Continent into the Union, and knows what
a handful the little Philippine Islands have proved. The excuse for
such agitators as Dr. Ugarte is the greater so long as Mr. Roosevelt is
allowed at large to make speeches wherein he can undo in five minutes the
work of years of diplomacy.
The distrust of North America is a very real thing throughout these
republics, and when in the autumn of 1913 Mr. Robert Bacon, formerly
American Ambassador to Paris, was engaged at considerable expense by Mr.
Andrew Carnegie and sent to deliver lectures in all the South American
capitals on behalf of “Universal Peace,” his mission was looked upon
in most quarters with suspicion. True, he was received with much pomp
and circumstance, and treated with great display of cordiality, but a
metaphorical finger was laid to the national nose at his departure, and
the national eye winked knowingly. As one gentleman rather cogently
observed to me, when the said Mr. Bacon was present as the evangel of
peace in Lima, “Why doesn’t he pack off with his lectures to Mexico
just now? That’s where he might be of some service, as we’re all quite
peaceful down here.” It is quite useless to endeavour to convince a South
American that the United States have not as deliberately engineered the
revolution in Mexico as they are supposed to have done that quaint little
affair in Panama.
This of the future is certain—that the surest way to produce an alliance
of all the South American powers, in which their national differences
would for the time vanish and the whole join together as one great
nation, would be for the United States to pursue a policy of aggression
in respect to any single one of them. To an extent little appreciated
either in North America or in Europe, these South American republics have
each their racial distinctions, and in all there is an intense feeling
of nationality, which, rather than diminishing, is steadily growing,
and is the object of the most assiduous cultivation on the part of the
leaders of the people. But the Drago doctrine is vital to their national
destinies and the very reasons that make them district entities would
unite them as a whole to confront a common enemy.
In the development of South America, the Argentine has an important rôle
to play, and as that country has been the pioneer in putting a stop
to the old foolish era of revolutions and internecine strife, turning
towards Europe not only for ideals of political advancement, but for
that material help which at once places the country under an obligation
and calls forth its own best energy, and is the best pledge of peaceful
intentions, it is safe to assume that, despite such temporary set-backs
as the commercial crisis through which it is passing as these lines are
being penned, the Argentine will maintain undismayed her political and
commercial expansion to splendid issue.