Before commencing a study of the financial and economic situation in the Argentine Republic, it is important to decide at the outset as to the spirit in which this examination should be pursued, and the method most proper to such an inquiry. We tread upon a novel and peculiar field, and any too rigid comparison with the events of other countries might easily lead us to errors of appreciation.
Above all we must practise the philosophical principle nil admirari; we must be astonished at nothing, and abstain from all too absolute judgments. Although, as the figures of foreign trade will show, the progress of the country has surpassed all expectation, it is, on the other hand, almost impossible to foretell how far the results of one year will be ratified by the year following.
Like all young nations, the Argentine progresses on its path to the unknown by leaps and bounds; it is as yet in an unstable condition, in which the oscillations of prosperity are still of great amplitude and exceedingly sudden.
It is easy to discern the cause of this essentially unstable condition.
The Argentine, in its present phase, is an agricultural country, whose principal sources of wealth are cereals and stock-raising; the result is that each year the whole life of the country is affected by the harvest.[13] On the harvest depends, in a great degree, the movements of external commerce; it produces those sudden changes which occur
from year to year, and which result occasionally in a variation of £8,000,000 to £12,000,000 above or below the average.
[13] We use the word harvest here in its widest sense, but we must ultimately distinguish the results of stock-raising from those of agriculture, since they do not necessarily vary in the same direction.
The harvest influences not only the exports, more than half of which consist of agricultural products, but has no less an influence on the value of importations.[14]
[14] The value of the exports in 1907 was £59,240,874, and according to the official figures the products of agriculture amounted to £32,818,324.
The national powers of consumption are, in fact, very intimately connected with the measure of the agricultural output; as the latter is bad or good, the home consumption absorbs more or fewer imported products. Thus the poor harvests of 1901 and 1902, which resulted in a fall of nearly £1,800,000 in the cereal exports, produced in 1902 a fall of £800,000 in the imports of iron and materials used for construction. The same depression was visible in the imports of textiles and beverages, and still more so in those of articles de luxe. The spending powers of the country being closely dependent on the facility of realising the products of the soil, it is easy to understand that in the case of a bad harvest or a poor market the consumers have no longer the same powers of purchase.