AUTHOR’S PREFACE TO THE THIRD EDITION
Three years have elapsed since the appearance of the first edition of this book, and we have to-day the satisfaction of being able to state that the development of the country has fully responded to our optimistic forecast. Short as such a period is in the life of a people, it has been extraordinarily full; the ground covered is so considerable that it is of a larger Argentine that we now have to revise the picture, while recording its pacific victories in the economic field.
No country in the world has ever in so short a time realised so rapid a progress, in respect of the produce of the soil. In 1904-1905 the area under culture was as yet no more than 221⁄2 millions of acres, while to-day, in the agricultural year of 1908-9, it attains the figure of 35 millions of acres, representing an increase of nearly 75 per cent. In the same period the value of cereals, which was about £1,600,000 in 1904-5, has also increased in very large proportion.
Taking as basis the figures furnished by the Division of Rural Economy and Statistics of the Ministry of Agriculture, we may estimate that the harvest of 1908-9 will give a yield of, 13,811,000 (metric) tons,[1] which may be divided as follows: Wheat 5,760,000 tons, flax 1,228,000, oats 823,000, and maize 6,000,000 tons. The value of the harvest, according to the prices ruling in 1908, will amount to 1045 millions of paper piastres, or £92,000,000.
[1] Reducing the above quantities to bushels of 56 lbs. weight, the cereal harvest is estimated at: wheat, 230,000,000 bushels; oats, 33,000,000; maize, 240,000,000. The metric ton is 34·5 lbs. lighter than the English.
To appreciate these figures at their true value, one must remember that twenty-five years ago the Argentine was still importing foreign flour to make her bread, while to-day the
production of grain represents nearly a ton per head per inhabitant.
It is the same with maize: twenty years ago it was hardly grown, and to-day the harvest amounts to 6 millions of tons; furnished almost entirely by two provinces—those of Buenos Ayres and Santa Fé.
As for stock-raising, we cannot make a comparison with any very recent statistics—since the last available date back to 1895—but we may say that the general census which has just been undertaken, under the direction of Señor Alberto B. Martinez, has revealed a wealth whose magnitude surpasses all conception. To-day the Argentine counts 29,116,625 horned cattle, 67,211,754 sheep, 7,531,376 horses, 750,125 mules and asses, and 3,945,086 goats; which is equivalent, at the present time, to a capital of 1481 millions of paper piastres, or £130,000,000. By referring to the figures for 1895, which give us 21,701,526 horned cattle and 4,446,859 horses, we may judge of the immense progress which the Argentine has realised in a few years, thanks to the transformation of 33⁄4 millions of acres of soil into magnificent pastures of lucerne.
On the other hand we must, it is true, note a decrease of 7,167,808 head of sheep, which are gradually falling back before the advance of agriculture and the increasing numbers of cattle. This harmless animal contents itself with a poorer soil, and does not fear the intemperance of the seasons; also sheep-raising is now giving place, in our central provinces, to other more remunerative industries, and the sheep are taking refuge in great quantities in the southern regions.[2]
[2] Patagonia, and even Tierra del Fuego, with its terrible winds and drenching rain, is now being occupied by the sheep-rancher, to the destruction of the guanaco and the natives; frost being rare save on the ranges, and the pasture luxurious.—[Trans.]
If we consider these facts with a view to noting the precise direction in which the Argentine is to-day evolving, we shall observe a marked tendency towards the extension of agriculture proper, and a check in the progress of stock-raising, which appears—at least for the moment—to be developing more slowly than of old.
This characteristic change is perceptible each year in the
statistics of foreign trade. The exportation of agricultural products amounted, for the year 1907, to the value of 164 millions of piastres (gold), or £32,800,000 as against £32,400,000 and £34,000,000 for the two preceding years. As for the products of stock-raising, the value in 1907 amounted only to £24,800,000, while in the two preceding years it was £24,800,000 and £28,200,000; and ten years ago it exceeded by more than £10,000,000 the value of the agricultural exports.
Many causes are contributing to this transformation of a pastoral into an agricultural country; their action is progressive, and they are profoundly modifying the aspect of the land, by gradually substituting, for the monotonous horizons of the ranchero’s prairies, the variety of cultured fields.
While the prices of cereals have always attained a remunerative figure, those of the bestial, on the contrary, have now and then suffered sensible depression; and, what is still more serious, the ranching industries have also suffered, as they did in 1908, by a lack of demand for hides and wool, and simultaneously for an insufficient outlet for meats.
The dried-meat (saladeros) industry, which used to absorb annually nearly two million beasts, has by now been almost entirely removed in the direction of Uruguay, or the Brazilian province of Rio Grande do Sul, and is little more than a memory; as this primitive and rudimentary method of preparation had perforce to give way before the more hygienic and progressive chilled and frozen meat trade. The chilled beef industry, however, upon which such hopes were founded, has not of late years made any conquest of new markets, England being almost the Republic’s only customer.
As for the exportation of cattle on the hoof, it is greatly impeded in Europe by prohibitive measures, which diplomacy, by means of commercial treaties, is endeavouring to remove. Yet were the desired advantages obtained, the result would be doubtful on account of the considerable rise in the price of cattle and the high freights which are charged for the transport of living stock. It therefore results that this particular species of exploitation is at an obvious disadvantage in the face of the refrigerating trade.
If the raising of stock and its dependent industries have not, in these last few years, realised a progress comparable to that of agriculture, we must by no means conclude that this department of production has ceased to be an element of national prosperity. Quite on the contrary: thanks to the efforts made to better affairs by happy selections in the breed of animals, the value of live stock has increased in surprising proportions, and the Argentine still retains its rank as second to the United States as a stock-raising country.
What we have endeavoured to emphasise, as a new manifestation of the national activity during the last few years, is that the development of the country has been in especial along agricultural lines; an incontestable proof of progress, and an index of a higher degree of civilisation.
Agriculture, as compared to stock-raising, is, from the economical point of view, a source of wealth having quite a different bearing upon the general prosperity and welfare of a nation. It is the fairy which little by little transforms the vast plains of the Argentine pampas into a more animated landscape, peopled by numerous homesteads, foci of colonisation, which then develop into villages, which in a score of years may perhaps be important cities. Agriculture summons the railroad, stimulates emigration, promotes the division of the soil, creates the small proprietor; it influences even the manners and morals of the inhabitants, for it demands more labour, more intelligence than ranching; nimbler wits, more method, greater foresight.
The comparison between the two great industries of the Argentine is summed up in the following fact: a property comprising 25,000 acres of pasture can be put into working order and managed by a staff of ten to twelve men. For an estate of 1500 acres under culture, one may estimate that forty to fifty persons, grouped in families, may easily live upon the soil and prosper. We may perceive by this the great superiority of agriculture from the point of view of the general interest of the country. It demands and supports a denser population; it permits the grouping of this population in villages and cities, it creates, in proportion, with a smaller capital, a great wealth of produce; in short, it contributes on
the one hand towards increasing the wealth of the country by participating largely in its exports, and on the other it increases its power of consumption, by absorbing a greater number of imported products.
Thus the evolution of the Argentine towards agriculture constitutes a real progress, and if the country continues to follow the same path, its development will assuredly not be arrested by lack of soil. The 35 to 37 millions of acres already reclaimed, and at present under culture, represent at the most a tenth of the total area of cultivable land, which is estimated roughly at 375 millions of acres, of which at least 125 millions are perfectly adapted to the culture of cereals. The four Provinces of Buenos Ayres, Santa Fé, Córdoba, Entre Rios, and the Territory of Pampa Central alone contain some 321⁄2 millions of land under the plough, while there remains about 170 millions of acres of land which is just as fertile, and which without manuring or preparation would yield a splendid crop from the first year of tilth.
This transformation into an agricultural country has already borne fruit. The figures relating to external commerce, compared with the world’s statistics of cereal production, show the present position of the Argentine among the great exporting nations.
It is the Argentine which to-day, after the United States, occupies the second rank in the matter of cereal exports; and this is a significant event in the economic history of the nations, to which the attention of Europe should be directed. At the present moment the Argentine, with her 4 million tons of corn available for exportation, is not as yet mistress of the grain markets, but she represents, to those countries whose production is insufficient, a notable reserve, which has become indispensable since the United States, Canada, and Russia seem to have reached their limit of exportation.
The year 1907-8 was for the Argentine, thanks to the results of a good harvest, a period of exceptional prosperity. The average yield of wheat was 18·7 cwt. per hectare—14 bushels per acre—and in the Province of Buenos Ayres it amounted to over a ton per hectare—or 15 bushels per
acre—although the average was only 11 per acre in 1906-1907, and 13 in 1905-1906.
As for the prices, they ruled higher than any the country had so far known, even during its most prosperous periods. Wheat had been selling at 6 or 7 piastres the 100 kilos—that is, approximately, at 3s. to 3s. 6d. per bushel—and at that price agriculture still yielded a fair profit. In 1908, as a result of the bad harvests in several European countries, the sales rose to 6s.; at which price the profits on the cost of production amounted to 25% or 30%.
After this cursory glance at the present situation in the Argentine, we must also express our views of the future. Optimism is certainly permissible in the case of a country which has advanced so far in so short a time, and where prosperity is founded on a diversity of products which can never be affected by a universal crisis.
However, one well might wonder whether the Argentine might not, in the Biblical phrase, know lean years following the fat; whether she is not destined to suffer the onset of plagues, such as drought and the locust, which latter is to her, as to Egypt in the time of the Israelites, a veritable scourge. Certainly here we have one of the great risks to which the country is exposed: a country wherein all depends upon the harvest, the earth being the principal source of wealth, and the mother of all industry. Yet this danger, so real a few years ago, is greatly lessened to-day by the fact of the distribution of cultivated lands and pastures over a far greater area. A bad harvest could not compromise both agriculture and stock-raising over a stretch of more than 15° of latitude.
Yet the country is subject to a very real danger, but one of another kind. From the very exuberance of development may arise a crisis of growth; for her prosperity depends not only on plentiful harvests; it may be influenced by other factors on which it is far more difficult to pronounce.
The country must continue to require considerable sums of capital for her agricultural necessities, for her stock-raising, for commerce, and for industries; and it may be asked whether the European markets, from which, in great measure, her capital derives, can continue to afford her an ever-increasing
amount of assistance which will keep pace with her development in all directions.
The Argentine is not so far self-sufficing. The soil is, to be sure, a source of immense national wealth, but this wealth is not in the form of a reserve to be drawn on; it is, as a rule, converted into real estate directly it is produced; unless, indeed, it goes abroad. For a farmer who makes a profit, say, of £8000 or £10,000, will immediately employ his capital to acquire another holding or to start a different kind of culture, instead of clearing off the debts which already burden his property. He is contented with his position as a borrower; for if money, even on mortgage, costs him 8 to 9 per cent., he can, on the other hand, obtain a far higher interest by sinking it in the purchase of land.
From all this it results that in the Argentine rural and even urban property is largely hypothecated. It must be understood that this capital is well guaranteed, as its security rests not upon pure speculations but on the yield of the property, which is far in excess of the charges; however, since the general tendency is not towards redemption, one may wonder if, sooner or later, there may not be a lack of equilibrium between the impulse given to the country and its financial needs. The crisis which arose in the wool market in 1908, the drop in the prices of quebracho timber, and the restricted outlet for cattle on the hoof, and even for refrigerated meat,—all these partial misfortunes are salutary warnings, and we must not lose sight of them, nor allow ourselves to be hypnotised by the high prices of wheat, maize, or flax, or the heavy yield of the lucerne pastures.
For our part, in considering the future of the Republic no less than its present interests, we hope to see it enter upon a period of consolidation, rather than continue indefinitely the discussion of further progress. Before entering upon another stage of development the country must, for a while, mark time, in order to gain leisure to assume its own liabilities, rather than continue incessantly to absorb new capital.
But there is still a cloud in the serene skies of the Republic; a cloud that might be the precursor of a truly national catastrophe, if the measures necessary to avert it
were not taken in time. The peril arises neither from the economic situation, which is excellent, denoting an ever-increasing vitality, nor the relations of the Republic with the neighbouring nations, which are conceived in a spirit of peace and concord. Although a short-sighted diplomacy has attempted to envelop the relations between the Argentine and Brazil in an atmosphere of jealous distrust, there is no fundamental cause which might trouble the friendly relations of these two countries, which formerly fought side by side on the field of battle for the redemption of a sister nation. They have no conflicting economic interests which might divide them, and are destined to afford a great example of progress and of civilisation to the other States of South America.
The peril to which we refer is of a totally different character: it is caused exclusively by the exaggerated expenditure of the public administrations, and the dangerous paths of armed peace upon which the country has entered; thus implanting, in young and free America, a ruinous system, which is ruining the nations of the Old World, burdens them with insufferable taxes, and diverts from production and labour too large a proportion of citizens. In order to face imaginary dangers, Congress and the Government have lately decreed that a sum of £40,000,000 shall be expended upon armaments.
As for home politics, they form a domain which we do not desire to enter, and on which the world of affairs bestows little enough attention, so long as they do not compromise the public peace. The Argentine, in fact, is still under a system of personal power; the Presidency of the Republic is the focus about which all the political life of the country gravitates. In default of a people as conscious of its rights as of its duties, and possessed of the virtues necessary to a course of perseverance in democratic practices, it is the Government that manages the elections; and it is difficult to say whether it does so because there is no public opinion, or whether there is no public opinion because the Governments usurp the functions of the electorate. From this point of view there has been no change in the political morale of the country; the only progress to be noted is that the parties
resort less often than they used to violence as a solution of their quarrels.
As for the administrative expenses, they are increasing with a rapidity only equalled by the growth of the fiscal resources of this fortunate country. Proposals for public works accumulate in the various Ministries, while waiting for the funds necessary for their execution; their total amounts to-day to the respectable figure of nearly £40,000,000.
To sum up: from our re-examination of the Argentine situation for 1909, we obtain an impression of great progress and of actual prosperity, an impression confirmed by the statistics of foreign trade, in which the entire activity of the country is reflected. For the year 1907 the total of imports and exports amounted to £116,000,000; for 1908 the total receipts and outgoings represented £133,000,000: with a commercial balance of nearly £24,000,000 in favour of exports.
Among the other manifestations of national progress we have still to take into account the development of the network of railroads, of which 13,660 miles are in actual working, representing a capital of £158,000,000, while 3259 miles are projected or in process of construction, representing a capital of more than £25,000,000. These new lines have been conceded by Congress either to companies already existing, or to new companies which are able to offer all desirable guarantees, so as to assure the prompt realisation of the schemes accepted. The Government, on its own part, has solicited and obtained from Congress the necessary sanction for the execution of a vast plan for the colonisation of the Southern Territories, which is based on the construction of numerous railroads. This continuous extension of the railway system has greatly favoured the valorisation of the new Territories, and has contributed powerfully to the movement of colonisation and emigration which is the indispensable condition of a wider future.
To-day, then, all is for the best in the best, or at least the richest, country in the world. But if science teaches us that Nature takes no leaps—natura non facit saltus—history also teaches us that nations in their progress must not progress too rapidly. For this reason the Argentine
Republic, in especial, has need to-day to consolidate her prosperity under a régime of foreign and domestic peace, of prudence and economy, and to avoid speculation and the abuse of credit, which have ended, before now, in inevitable reaction.