A factor that makes these freights seem even higher is a comparison with the maritime freights, which fell in 1908 to a very low figure. The transport of a ton of cereals to a port of embarkation 3000 miles distant would cost a farmer four or five times as much as the freight from that port to Europe.
In a country like the Argentine, presenting an immense level surface to the eye, which can hardly distinguish the slightest landmark or difference of level, it would seem as though the building of railways should have been particularly inexpensive, especially as for ten to twenty years all materials could be imported free of duty. As a matter of fact, however, the cost of construction has been very high in the case of certain lines; either on account of the land speculation which has followed their establishment, or because the estimates were exceeded having been established without any serious control on the part of the State. This explains how it is that these companies, having an enormous capital to redeem, cannot at the present moment lower their rates.
In the Argentine the railway companies are not established as in France, by right of a concession limited to a certain number of years.[24] The concession is granted without conditions, excepting the reserve that it may be redeemed by the State; and this reserve may be applied at any time
whatever, conformably with the expropriation law. The conditions of redemption are in most cases established on the basis of the revenues of the last five years, increased by 20 per cent., so that the clause can scarcely be carried into effect to the profit of the State in the case of lines yielding good profits.
[24] A clause fixing the term of the concession—that is, the date upon which the line, with all its buildings, etc., will pass into the hands of the Government without any payment on the part of the latter, was inserted in the case of two railways only, and for a term of fifty-five years. These two lines are the railway from Villa Mercedes to La Toma (the old North-Western Argentine), to-day a section of the Andean National, and that from San Cristobal to Tucuman, to-day the Southern Section of the Central Northern. Both are guaranteed by the nation; but the nation having become the proprietor, the above clause has of course not taken effect.
The State and the Provinces have guaranteed dividends in various ways. These guarantees were granted very liberally when the Argentine was seeking to create and develop its railway system, but the Governments have not shown the same readiness to honour their signatures in times of crisis. We shall see in the financial section of this book that the State has had to contract loans in order to redeem its obligations, and to liberate itself from engagements it had been unable to keep.[25]
[25] The French company of the Santa Fé Railways, which had a guarantee from the Province, which guarantee was never paid, obtained in exchange, by arrangement, the complete ownership of its lines.
At present the Government no longer gives guarantees—not even to encourage the construction of lines in regions which offer little attraction from the point of view of traffic. It prefers to build them itself, in order to increase the extent if not the value, of the systems it already owns; or has recourse to companies or private individuals for the construction of new lines, but without guarantees of any sort.
Having given these details of the railway system, we have still to consider of what expansion it is still capable. In comparison to other American States—excepting the United States, whose colossal progress in this department permits no comparison with other countries—the Argentine is in the first rank in the matter of its railway mileage. With its 13,250 miles in operation on 1st January 1909, it surpasses both Mexico (with 8390 miles) and Brazil (with 10,080), the two American States which, being the wealthiest and having the largest populations, possess very extensive railway systems. If from the same standpoint we then compare the Argentine with France, Italy, Spain, Belgium, England, Germany, and Austria-Hungary, we find that it occupies the fourth rank. But it goes without saying that these figures do not mean anything very precise, except in conjunction with
those denoting the area and the population of the Argentine. They are indications rather than exact comparisons.