CHAPTER I
THE ARGENTINE BUDGET
The financial situation—Continual increase of national expenditure—Great and rapid progress since 1891—Insufficiency of the means adopted to moderate this increase—The Budget Extraordinary and the Special Legislation Budget.
Causes of this increase of national expenditure—The increase of administrative requirements caused by an increasing population; this is the most natural cause, and that most easily justified—Increase of the public debt—The intervention of the State as the promoter or guarantor of important public undertakings—Exaggerated military expenses.
The total sum of national, provincial, and municipal expenses. The proportion per inhabitant—Comparison with other foreign countries in the matter of administrative expenses.
The national revenue—The revenue as organised by the Constitution, and its analysis—Indirect taxation—The customs the chief source of revenue—Direct taxation; its origin in the Argentine; its justification; its yield—Revenue of the industrial undertakings belonging to the State: railways, sewers, posts and telegraphs—The exploitation of the State lands.
Elasticity of the receipts, which follow the development and progress of the country—The accelerated increase of expenditure, and the resulting chronic deficit—Necessity of serious reforms.
The phenomenon of an increase in the national expenditure: a phenomenon which makes itself felt under monarchies as well as under republics, in those countries which have long centuries of life behind them, as in those whose independent existence has barely begun: this phenomenon is felt in the Argentine Republic more keenly than in the older nations of Europe. Our book would present a serious lacuna if we did not, before speaking of the increase of the Argentine budgets, inquire first of all, as closely as we can in a work of information, what are the causes which have led to this continual increase in the national expenses. We must know, in short, whether this increase is due to general causes, produced by administrative necessities, and connected with the mere progress of the country, or whether on the contrary it arises from special factors, peculiar to the social and political conditions of the country, and to the
practical defects of its Government. If we examine the amounts of the Argentine budgets for a number of years, we shall see that, with a few rare exceptions, they have always increased, and at a more or less extraordinary rate. Even in the years when the country was groaning under some profound economic or financial crisis the same thing was to be observed.
Not to go back too far in our retrospective study, let us take as a point of departure the year 1891, which year is a veritable landmark in the history of the Argentine people, since it was in that year that the political and financial crisis which broke over the country attained its greatest intensity. We find that in 1891 the expenditure authorised by the national budget—not the expenditure actually effected, with which we shall deal further on—amounted to $41,230,349 paper and $20,315,446 gold, or some 31 millions in gold, or £6,200,000.
Five years later—in 1895—this expenditure had increased to $76,000,000 paper and $15,000,000 gold, or $37,000,000 in gold, or £7,400,000. Since then, with rare exceptions, the budgets have followed an ascending scale. If, indeed, we concern ourselves with the sums actually realised, instead of those proposed by the budgets, we find that the amounts of the later budgets are these: in 1898, $75,000,000 gold and $119,000,000 paper, or $121,000,000 in gold, or £24,200,000; in 1899, $31,000,000 gold and $104,000,000 paper, or $77,000,000 in gold, or £15,400,000; in 1900, $24,000,000 gold and $105,000,000 paper, or $69,000,000 in gold, or £13,800,000. Reducing to gold the sums estimated in paper, we find that since 1901, that is, since the time when the value of the currency was established on a fixed basis, the following sums have been expended: in 1901, £14,200,000; in 1902, £17,600,000; in 1903, £15,600,000; in 1904, £17,200,000; in 1907, £20,200,000; in 1908, £20,200,000; there has thus been a rapid progress.
The budget for 1909 amounts to $270,000,000 paper, or £23,812,800. In this total are comprised two items: one of 15 millions of piastres in paper, value £1,320,000; the other of 3 millions, or £264,000, which are set aside to meet the expenses of the fêtes of the first Centenary of the National
Revolution. If we subtract these two items, which are necessitated by extraordinary expenses, we find that the increase of the administrative expenditure over that of 1908 amounts to £1,760,000.
We ought here to remark that these figures do not include the sums realised by the Government by means of the issue of stock: a procedure which constitutes an interesting chapter of Argentine finance.
We see, from these data, that the increase of the national expenditure is a constant, almost an inevitable factor, which occurs year by year in the Argentine administration. It now remains for us to inquire if unavoidable causes exist which force the State to spend without reflection, and, when funds are lacking, to contract loans which grievously burden the future; or whether, on the contrary, we have here a fault rooted in the soil of new countries which have no serious administrative traditions, and in which the spirit of order and economy has not yet grown to the stature of a national virtue. In the Argentine Republic the increase of public expenditure responds to causes which differ from those which are active in the countries of Europe; though we do not say that the latter do not also exercise their influence. A new country, inhabited by a sparsely-settled population, in possession of a rich but desert territory, its economic organism as yet barely developed, the Argentine has not yet produced a class of men practised in and prepared for practical administration. It is, on the contrary, afflicted with undisciplined political parties, full of impatience and of ideas of progress which cannot be immediately realised. It is not surprising that in the Argentine the increase of public expenditure responds to causes unlike those to be observed in other States, which number the years of their lives in centuries; which enjoy perfected administrations, possess a large class of men prepared for the science of government and finance, and whose needs, far from increasing, tend to restrain such expenditure.
So, considering the question under its most general aspect, we believe we shall not depart very far from the truth if we suggest, as the causes which produce the constant increase of the Argentine budgets, the following facts:
(1) the increase of administrative requirements, caused by the increase of the population; (2) the increase of the public debt; (3) the depreciation of the currency until a recent period, and the increasing dearness of the necessities of life; (4) national and foreign wars (which causes now belong to history, and have happily ceased to exercise their influence in the Argentine); (5) the intervention of the State as manager or promoter of expensive public works; (6) the cost of an imperfect and expensive administrative machinery, and the wastefulness of the Government and of Congress; (7) a lack of control in the handling of revenue and expenditure; (8) increased military expenditure. Under this last heading we may include the heavy expenses which the Government has been forced to meet in order to maintain the integrity of its frontier and to avoid a war with Chili. Between 1889 and 1903 it has employed for this purpose a sum of £13,000,000.
A brief examination of each of these causes will suffice to show that they have been truly presented, and will also demonstrate the degree in which the phenomenon we are studying exhibits itself.
The influence of the first factor is assured and indisputable; it is enough to enounce it; it will be admitted without further criticism. The increase of the Argentine population, although it is not precisely all that might be desired, because it is not equally distributed, being larger on the coast than in the interior, is none the less considerable. The first national census of 1869 gave a population of 1,877,000 for the whole country; that of 1895 gave 4 millions; an increase of more than 2,100,000, or of 4·8 per cent. per annum.
Since 1895, although the Constitution orders a ten-yearly census, no census has actually been taken. But according to the most reliable calculations, the population of the Argentine amounts at present to more than 6 millions of inhabitants.
It is obvious that an increased population must also mean an increased administrative expenditure, as more telegraphs are needed, more bridges, roads, and railways, a larger police service, more lawyers and judges, and more schools
and teachers. No sensible person would pretend that the national expenditure could remain unchanged, while all else was developing and prospering. If the national revenue increases at an extraordinary rate, on account of the development of the population, it is only logical that the expenditure should increase likewise; but in a less proportion, it is true, as is proper under a good administration.
But this is not to say that it is permissible for administrators entrusted with the annual duty of presenting an estimate of public expenditure to do what is occasionally done, with such deplorable results—to estimate also in an exaggerated fashion the increase of the population, in order all the more to inflate the budget. The profound financial crisis, which affected the country in 1890, had no other cause. Everything is risked by the abuses of official expenditure. We have the proof of this in the fact that the economic possibilities of the country have never been so great as in these moments of financial crisis.
The continual increase of the public debt is another of the causes of exaggerated budgets. Since the first loan of £1,000,000, contracted by the Province of Buenos Ayres in 1822, which was later transferred to the account of the nation, until the present time, when, if no new loans have been contracted, at least the Government has put into circulation millions of stock which it was holding in reserve, the public debt has done nothing but increase, and in considerable proportions, attaining in 1909 to an amount of $371,000,000 gold and $237,000,000 paper, or £95,000,000 in all; and this, without including the last loan of £10,000,000 contracted by the Government in March 1909.
Another permanent cause of the increase of public expenditure is that which arises from the intervention of the State, as guarantor or promoter of costly public works.
The Argentine Constitution has very wisely instructed Congress to “promote the introduction and the establishment of various industries and of immigration; the construction of railways and navigable waterways; the colonisation of the lands belonging to the nation, and the importation of foreign capital and the exploitation of the rivers of the interior, by
means of protective laws, temporary concessions, privileges, and awards, which shall be an incentive to emulation.”
In these sentences the writers were inspired only by the embryonic condition of the country for which they legislated. In the old-established European nations, where great accumulations of capital exist, where everything is done by personal initiative, where the commercial and industrial spirit is highly developed, many of the prescriptions of the Argentine Constitution would be useless or out of date. But here, where capital is only beginning to exist, as a result of the large commercial balance left over from each year of international trade; here where, to use the phrase of an Argentine thinker, “we are naturally rich but economically poor,” the State has to turn to all trades; it has to go into business as contractor, encourage the establishment of industries by means of premiums or bounties, and stimulate the introduction of capital and of immigrants.
The last of the causes we have cited as determining the increase of public expenditure in the Argentine, is the increase of military expenses. We do not here refer to the extraordinary expenses which the Government had to support for a number of years, in order to acquire the elements of naval and territorial defence wherewith to meet the possible aggressions of a neighbouring State, but the ordinary annual expenses for the upkeep of the army and the navy.
Up to 1902 these expenses followed a scale of accelerated increase, and the country met them as a necessary sacrifice, dominated by the conviction that by this means it could evade the greater calamities of a war; and quieted at the same time by the promises which were given that once the danger had passed the expenses would naturally decrease.
Unhappily it was not so. Although the international horizon was clear of the cloud which had threatened to disturb the tranquillity of the country, the army and navy estimates showed no signs of abatement; on the contrary, they showed a tendency to increase. Thus in 1902, when the international question was in an acute stage, and a rupture was momentarily expected, these estimates amounted to £2,816,000.
Now, in 1909, with peace and tranquillity reigning on all sides, the war-budget still amounts to £1,980,000, and the naval budget to £1,452,000; or to more than £3,400,000 in all. We repeat that these are ordinary, not extraordinary budgets, whose amount is always considerable, and which have to be met by means of sums raised by special financial laws, or authorised by simple resolutions of the Cabinet or Council of Ministers.
To these military expenses we must add the sums required to pay the retiring gratuities of officers, and these already amount to a veritable army. These gratuities, granted under the provisions of an irrational law, have contributed to deprive the army of a large number of soldiers who might still be serving with honour and distinction.
But large as these expenses are, they are altogether eclipsed by the exorbitant sum of £14,920,000 voted by Congress in 1908, which, divided into eight annuities, is destined for the purchase of munitions of war, ships, etc.
The Argentine, by consenting to such expenses, which are as excessive as they are unjustified, is thus deliberately entering upon the policy of armed peace, which has produced such lamentable results among the nations of Europe.
The figures we have already given, which relate to the National Budget, represent a portion only of the expenses which weigh upon the inhabitants of the country; for they do not include those amounts requisite for the support of the provincial and municipal administrations of the entire Republic. The amount of all the budgets together—national, provincial and municipal—amounted, in 1908, to £29,200,000.
Each one of the six-million inhabitants of the Argentine must thus annually contribute nearly £5 towards the support of the public administrations. But in reality this contribution is still heavier, as the expenses which figure in the budget are only a part of the administrative expenses, and we must still add the expenditure authorised by special laws or resolutions of the Cabinet.
This proportion of £5 per inhabitant is enormous; to understand how large it is, we must compare it with the amounts charged in other and more advanced countries. On
the other hand it is stated that some 30 per cent. of the whole national expenditure is absorbed by the salaries of the administrative employés, functionaries, ministers, etc., and by pensions and retiring gratuities.
Commenting upon this abnormal situation, a sometime Minister of Finance remarked some years ago, in an official document which attracted attention by the energy and sincerity with which it was written:—
“Our budgets have constantly increased of late years. It is notorious that the personnel of the Administration is excessive, just as it is notorious that useless and expensive sinecures have been created, with the sole object of giving places to persons whose influence has been such that the State has undertaken to support them. Bureaucracy is increasing; industry, commerce, and all the spheres of free endeavour and of individual effort are abandoned by the sons of the country, who seek salaried employment or the exercise of intermediary professions which demand no effort. The number of young men who waste their time in seeking a place, instead of devoting their activities to work, in a country which offers wealth to all who will employ a little energy, a little perseverance, is surprising. But all want an easy life, even though it be poor and without horizon; all wish to live on the budget, and in order to gain their object they exhibit all kinds of ingenuity; they go seeking recommendations, and employ every means at their disposal.
“This host of pertinacious beggars of place results in the creation of new employments and new services, all equally useless. The national and provincial administrations pay more than $65,000,000 in salaries and pensions. Each inhabitant contributes six golden dollars—£1, 4s.—towards the upkeep of an army of employés, which is an enormous sum. The public services of other countries cost, per inhabitant: in Switzerland, 4s. 9·6d.; in the United States, 6s. 4·8d.; in England, 8s. 2·88d.; in Holland, 9s.; in Austria, 11s. 2·88d.; in Belgium, 12s. 0·48d.; in Germany, 12s. 0·96d.; in Italy, 15s. 9·6d.; and in France 19s. 2·88d. These figures, taken from Paul Deschanel’s work on Decentralisation, show us that we have outstripped all other nations in the matter of expenditure on the administration; even France and Italy,
where bureaucracy is regarded as a calamity and as one of the causes of their economic decadence.
“We must check this avalanche by suppressing all useless employments and all superfluous services. It is essential to turn our young men aside from their present path, in order that necessity shall force them to exercise their energies in the vast field which is offered them by a new country, full of natural wealth, with a fertile soil and a benign climate.”[96]
[96] See Mémoires des Finances de 1889, by J. M. Rosa, Vol. II., p. 174.
The reaction which Señor Rosa, in his genuine patriotism, had hoped for, took place a little after his departure from the Ministry of Finance; but unhappily its direction was the reverse of that he anticipated.
We have examined the expenses of the public administrations; we have measured the weight of the public debt; we must now examine the treasury receipts, in order to discover what are the most important sources of the revenues which fill it, and what elasticity they possess.
The Argentine Constituents, after having explained, in the sententious preamble which serves as a preface to their great political code, what place was theirs who were building the great edifice of the State, turned to consider from what sources the revenues for the Treasury might be drawn, in order to satisfy the necessities of the administration of the country.
To this effect they enacted that these resources should be: “The taxes upon imports and exports; the sale or allocation of lands forming part of the national territory; the postal revenues, and the other taxes, which the General Congress will impose equitably and in proportion to the population; also such loans and credit operations as the same Congress shall decree for the urgent needs of the nation, or for undertakings of national utility.” (Article 4).
Has the foresight of the Constituents in establishing these sources of revenue been justified? or, in other words, were the elements of revenue created by the fundamental charter efficacious? A little study of the system of Argentine revenue will show that of all these sources enumerated, the only ones that have a permanent and fertile existence
are those relating to the customs receipts; that is, to the duties of export and import. The others either give poor and uncertain results, such as the sale and allocation of national lands; or are of a perilous nature and to be used with restraint, such as loans and transactions on credit; or they are drawn from services which produce revenue only within narrow limits, such as the Posts.
Besides the sources appointed by the Constitution for normal requirements and ordinary periods, the same charter enumerates another source to be resorted to in exceptional cases or for purposes of defence, when the common security and the general welfare of the State may demand it. This source is the imposition of “direct taxes, during a fixed period, and equally proportioned all over the Republic.”
It follows from these limits that the principal effective source of revenue intended by the Constitution to form the Federal Treasury is that of indirect taxation. So far the new fundamental code has not only followed the example of the principal nations, and hearkened to the counsel of economic science, but has also put into effect an eminently practical and far-seeing procedure.
Señor Alberdi, who of all writers has most profoundly studied the system of revenue established by the Argentine Constitution, has stated that indirect taxation is the most fruitful fiscal resource, as is proved by the customs revenues, which are relatively greater than those of all other taxes put together. The indirect tax, adds Señor Alberdi, is relatively the most equitable, as every one pays according to his tastes and his powers of consumption; the foreigner as well as the son of the soil.[97]
[97] See Sistema económico y rentístico, Obras de Alberdi, Vol. IV, p. 419.
As we have seen, the Constitution was far-seeing and lucid in its definition of the character of the revenues of the National Treasury: that is, in fixing upon the customs duties, the sale and allocation of land, the products of the Posts, and other contributions to be imposed by Congress for normal situations in a proportional and equitable manner; and also in deciding upon the imposition of direct taxation for determined periods, and relatively equal all over the country, for exceptional and abnormal times.
According to the commentator quoted above, when the Constitution left Congress the faculty of establishing, equitably and in due proportion, taxes of other kinds, and abstained from naming them or limiting them to a fixed number, it was because it wished to give the legislature the right of adopting all those recognised by economic science, in order that they might be imposed according to the principles of the Constitution itself.
If we now cast an eye over the table of the national revenue, we shall see that in 1908 the nation collected, in the form of direct taxes, the sum of £583,344; in the form of indirect taxes, £4,803,920; for the remuneration of services, a sum of £1,023,440, which had not the character of direct taxation; as the usufruct of land belonging to the national domain, and the profits of national undertakings, £2,510,240; and as capitation fees, £8,000. We must also include in the receipts the sums contributed by some of the provinces, and by the National Bank, to the service of the national debt; guaranteed, on their account, by the National Treasury. If we add together all these sums, which for one reason or another were placed to the account of the nation in 1908, we arrive at a general total of £22,392,160.
This revenue may be analysed as follows:—
The group of direct taxes is formed by the land-tax of the city of Buenos Ayres and of the National Territories, which figures in the balance-sheet as a sum of £320,320. In reality the product of this tax is greater—amounting to more than £616,000—but the nation is by law compelled to give a certain proportion of this sum to the Municipality and another to the National Council of Education; what remains when these obligations are satisfied belongs to the Government. The commercial and industrial licences of the Federal capital and the National Territories form the second class of direct taxes, their yield being £245,520; but, as in the case of the land tax, the Government has to give part of this sum to the city and part to the Council of Education.
The indirect taxes are those which produce the largest yield: they include the customs duties upon imports, which in 1908 yielded £12,036,000. The consular duties brought in £100,000; stamps and fees accounted for £118,000.
Besides the resources furnished by the indirect imposts of the customs, there has since 1891 existed in the Argentine another kind of indirect internal duty, which is charged upon consumption, and which every day acquires a greater importance, in proportion as the country is developed and as wealth and population increase.
These duties were established at a critical moment of the country’s history, and they mark a degree of evolution in the financial system of the country. In 1891, when the liquidation commenced of the great financial crisis which had completely overturned the economic organisation of the Argentine, the strength of the country was broken, the Treasury was empty, and there existed a public debt which was all the more grievous in that the paper currency was absolutely inconvertible, and decreased in value daily, in the midst of all the difficulties which characterised that terrible time.[98]
[98] See Memoria del Ministerio de Hacienda, 1890, p. 72.
This overwhelming situation resulted in the establishment of indirect internal imposts; that is, the branch of taxation which is levied on the national industry and national production; but which is, in all contemporary nations, one of the most fruitful sources of revenue; the more so as its collection demands few sacrifices on the part of those who pay it.
The realisation of this fortunate idea, which effected an important innovation in the revenue system, was due to the administration of Señor Carlos Pellegrini, in which Vincent-Fidel Lopez was Minister of Finance, and was perhaps the most important and meritorious act of the administration.
During this first year of 1891, the receipts furnished by this branch of taxation did not attain to the expected results; they amounted only to £224,682, distributed as follows: Alcohols, £123,511; beer, £23,549; matches, £76,617; banks and companies, £982; total, £224,660. Out of a total collection of $75,501,077 paper and $497,120 gold, or £6,743,518, the yield of internal duties amounted only to 3.29 per cent. Four years later, after the administration of internal duties had undergone considerable modifications and improvements, so that the system of collection had become more exact, these imposts furnished the Treasury with £676,946, which out of
a total collection of $29,805,651 in gold and $28,958,460 in paper, or £11,571,076, amounted to 5·85 per cent. of the whole.
In 1897 the budget voted by Congress increased the general revenue to be collected to $33,492,000 in gold and $47,835,000 in paper (deducting from this last sum 12 millions of paper produced by the shares of the National Bank and 2 millions as the profits of the Bank of the Nation), or in all $148,000,000. The yield of internal duties had increased to $19,360,000, or 13 per cent. of the whole revenue.
In 1908 the domestic imposts produced £4,000,000, or 17 per cent. of a total collection of £22,400,000. The chief element of this revenue was furnished by the duty on the consumption of alcohol, which produced £1,496,000. The tobacco duty came second with a yield of £1,760,000. Matches yielded £269,000; beer, £308,000; insurances, £61,600. These figures show how rapid has been the increase of the revenue from internal duties on consumption.
If we disregard that portion of the revenue which is raised by imposts, and examine the yield of the industrial undertakings exploited by the nation, we shall find that as yet they are far from constituting any real resource for the Treasury, and far from compensating the large amounts of capital employed. Comparing the yield of these undertakings with the working expenses, we find that the balance, as a general thing, is on the losing side.
This is the case with the four railways belonging to the nation, whose yield, in 1905, was £1,012,000. The working expenses, the renewal of rolling-stock, and repairs of the permanent way, completely absorbed the revenue. We must hope that this ruinous state of things will disappear presently, when the network of State railways is completed, and the lines unite important centres of production, and the system of administration is perfected.
After this miserable result we may point with relative satisfaction to another important industrial undertaking of the Government: the sanitation works of the city of Buenos Ayres. Apart from the hygienic advantage, which is already very evident, the financial results are worthy of attention, as they show that this undertaking will very shortly cover, if
not the whole, at least a portion of the interest on the capital employed.
The ordinary working expenses of this undertaking amounted in 1908 to £258,202, while the revenue amounted to £673,200. This left a balance in favour of the Treasury of £415,000, of which a great part was employed, by virtue of special laws, in the enlargement of these works, which enlargement will still further increase the revenue. The financial result of this undertaking is a conclusive proof that such enterprises, when directed with method and intelligence, are always profitable to the State.
The Postal Service, which the authors of the Constitution expected to be a considerable resource, has hitherto given only negative results; the receipts have not hitherto covered the working expenses. The ordinary expenses of the Department of Posts and Telegraphs were £1,144,000 in 1908, while the effective receipts for the same year were only £936,320; giving a deficit of £207,680. In reality this deficit was far greater, because fresh expenditure was necessitated by the construction and repairs of telegraphic lines, and certain purely nominal receipts, arising from the franking of official correspondence, were put on the credit account.
If we now proceed to examine the revenue derived from the national estates, we find that its most important item proceeds from the sale and allocation of the public lands. This revenue, which figures among those enumerated by the fundamental charter as forming the resources of the Treasury, has by no means produced what it should, owing to the lack of method or foresight in the management of this important administrative department. In 1908 this source produced only £278,080; and this sum represents a considerable increase over previous years, especially over the year 1904, when the revenue was only £27,368. But when we take the fact into account that the nation still possesses 212 millions of acres of land, which are situated in territories whose population is rapidly increasing, and which will shortly be well served with railways, we perceive at once that these lands, which are a powerful source of attraction to immigrants, may also in time become a very important source of revenue.
The revenue derived from the exploitation of industrial
undertakings and from the national domains being thus eliminated from the list of effective revenues, as being nominal or insignificant, we see that the nation has no other positive resources than the customs duties and imposts upon consumption. This explains the development of the budgets of the last few years, in which the domestic and indirect duties have increased the fiscal receipts.[99]
[99] See Memoria del Ministerio de Hacienda, 1895, Vols. IX. and XI.
One of the characteristics of the present situation of the Argentine is the remarkable elasticity displayed by the increase of the fiscal resources. At the present time few countries in the world present a similar spectacle. Here, more than in any other country, the official revenues are in direct relation to the result of the harvests and the exportation of the products of the ranch; so that the table of fiscal receipts is a kind of infallible barometer, which measures the degree of wealth and prosperity of the general population.
If—not to go back too far in our investigations—we take the thirteen years from 1895 to 1908 as an example, and if we convert into gold the sums received in paper, according to the average rate of exchange for each of these years, we find, in the first place, that in 1895 the Treasury received £7,600,000. Since then these figures have increased in rapid progression; passing from £7,600,000 to £8,600,000; thence to £10,000,000; thence to £10,600,000; thence to £14,600,000; but in 1900, through economic causes such as the loss of harvests, anthrax, the closing of English ports to Argentine live-stock, joined to such political causes as the fear of complications with Chili, the revenues fell to £13,000,000. But progress was not long in establishing itself anew; in 1904, the revenue was £15,200,000; in 1907, £21,200,000; and in 1908, £22,400,000, which is the highest figure the administration has ever known.
To appreciate this enormous progress at its true worth, we must take the fact into account that it was precisely during these years that the nation released several sources of revenue which had previously been taxed; such as duties levied on the export of natural products, and on natural or artificial wines, and additional duties levied on importations,
all of which represented a respectable number of millions per annum.
Thus in thirteen years, from 1895 to 1908, the fiscal receipts have increased by £14,800,000, or by 194 per cent.
Such a result cannot but be satisfying, and it would be the most eloquent proof of the intense vitality of the Argentine finances were it not for the still more rapid increase of official expenditure. This also has increased, rapidly and enormously, more often than not exceeding the revenue, and leaving each year a more or less important deficit, which, accumulating from one year to another, has finally to be converted into a consolidated debt, whether foreign or domestic. “The practical result of the budgets from 1863 to the present time,” says an official document, “has been an uninterrupted series of deficits.”[100]
In the face of this situation the patriotic advice which the Minister of Finance, J. M. Rosa, gave the Government and the Congress in a memorable document some years ago, is more than ever applicable.
“We must do our utmost to economise,” he said, “by restraining ourselves and reducing our expenses to the absolutely indispensable. It is only by applying ourselves to the work of simplifying our administrative services, by suppressing useless formalities and superfluous employments, by scrutinising the least details of the public expenditure, that we shall succeed in making large economies. It is certain that to purge the administration of its ancient vices, to sweep away all useless appointments, to refuse to find vacant places at the bidding of power and influence, and to establish the strictest rules of economy, is a task of no mean difficulty; but we cannot stop to think of the animosity and the vindictive temper which it may arouse when duty renders such conduct necessary.”[100]
[100] See Memoria del Departamento de Hacienda de 1899, by Joseph M. Rosa.
If Argentina truly wishes, not to compromise her lofty destinies, but to remain a centre of attraction to the labourers or the disinherited children of fate to whom she offers the resources of her fruitful soil; if she aspires to be, in the twentieth century, the great centre of the world’s emigration, as were the United States in the nineteenth
century, she must obtain an administration both methodical and economical; careful of the public moneys, and at the same time open to all material progress. It is thus that she will win the confidence of men and of capital; that is, of the two elements which she must still multiply in order to become a great nation.