The Argentine in the Twentieth Century

by Alberto B. Martínez; Maurice Lewandowski

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.