It would be out of place here to talk of this or that defect in British business methods or to suggest possible amendments. Such matters may be left to business men. Mr Herbert Gibson, in the fascinating address which he lately gave in King's College, London, sets the matter on a higher plane. "I do not think," he says, "it is so much a question of this or that system of weights and measures, or of the insularity of our classes of goods, as a question of a more intimate and sympathetic understanding between the peoples themselves. Trade can no doubt go on without such an understanding; but, where it exists, commercial as well as political, social and intellectual relations are strengthened. It seems to me that where our relations with South America have weakened or at least where they have not progressively increased, is in that man-to-man understanding and sympathy that opened the doors of all South America to our grandfathers."
CHAPTER V
EFFECTS OF THE WAR ON THE REPUBLICS
El país de mañana, "the Country of Tomorrow." One may hear the proverb any day on the lips of Spaniard or Spanish-American in whimsical self-criticism concerning his own ways and those of his people and country. But the word applies in another sense to the Spanish-American republics. They are the countries of tomorrow, the lands of the future, the lands of promise, this score of Latin-American republics; for they are twenty in number. Owing to want of space and the comprehensive character of our subject, I have been obliged to speak of Latin America as a whole. This is not inappropriate, for Latin America does form a world in itself, as all Latin-Americans feel, and indicate in their intercourse with one another. Thus, one may quite rightly speak of Latin America as a whole, just as one used to speak of Europe as a whole. But this western world, which sprang from the Iberian Peninsula, is a group of twenty republics differing from one another in situation and character and, to some degree also, in ethnology and manner of language. These countries extend through every habitable latitude, and most of the republics contain within their own borders every habitable altitude. Their products are boundless, both in abundance and in variety, and these products might be multiplied indefinitely. Name any one of the republics, and you are naming a symbol of wealth, of existing wealth, and still more, of manifold future wealth.
Gast's pamphlet, summarised in the second chapter, speaks of eighty million people "reaching upward and now setting their feet on the first steps of their life-journey." The expression may seem a little inappropriate and, at first sight, even a little derogatory. But it is true: and, on reflection, no South American need feel hurt at this description, which is in fact a justification of the past history and present position of his country. These countries are young. They have known the turbulence of youth. Now they are pushing their way, vigorously enough, towards maturity and clearly developed form. The fact was distinctly stated by a Brazilian, lecturing lately in King's College, London, who said: "The Nineteenth Century was the age of experiment; the Twentieth Century will be the age of fulfilment." These countries still require interpretation to Europe. Hampered at their first start, at the epoch of emancipation, by the exhausting and confusing character of that long struggle, by want of political experience, by the ignorance of the masses and, in some parts, by ethnological difficulties, they were obliged to spend a generation or two in clearing up the aftermath of that revolution; and in most cases their political constitutions (although in form they are models of constitutional law) are in their actual working only now emerging from the stage of experiment, sometimes confused and shifting experiments, sometimes rough-and-ready expedients. For example, in the Argentine Confederation and also in the United States of Brazil, the relations between the Federal Government and the Governments of the States have not attained that regular equilibrium which prevails in the United States, an equilibrium which was there only procured at the cost of a tremendous civil war. In most of the republics the relations between the Executive and the Legislature have scarcely reached a stable adjustment. We should remember that Brazil only shook off the monarchical form of government in 1889, and that it was some years before that revolution was really completed. Again, in the republic best known to England, the Argentine Confederation, the multifarious and cosmopolitan mixture of immigration from all the Mediterranean lands has hardly yet coalesced to form a definite national type. The origin of these states, though superficially resembling that of the United States, was in fact fundamentally different. For every one of the thirteen British colonies of North America was, in a sense, grown up and a developed entity at the moment of emancipation, since they had all possessed local parliamentary constitutions of the British type from the beginning of their colonial days. The initial condition of the Latin-American states was much more formless and their early difficulties were much more complex.
Some of these lands show the character of youth in the tendency to imitation, the adoption of French and especially of Parisian ways, not realising how much better is a genuine native development than the imitation of even the best models. Another symptom of youth is the lavish and sometimes ostentatious spending of money. If the Spanish-American has money, he spends it like a schoolboy, and he likes a splash for his money. Another sign of youth is the rather exaggerated national or civic amour-propre, a lively touchiness concerning outside criticism—a sentiment which inclines one to be rather diffident and apologetic even about making such remarks as these. This is a local, not a racial characteristic in the South American, for the Spaniard is even more proudly indifferent than the Englishman concerning what the foreigner thinks.
These young states have hitherto acquiesced in their economic dependence upon Europe. European immigration (at least on the east coast), Government loans raised in Europe, provision of public utilities by European capital, importation of almost all manufactured articles from abroad—these have been to most South Americans the accepted conditions of life. Thus, all these republics felt a sharp and instant shock at the outbreak of the European war. The economic equilibrium was upset, and the machine ceased to work. The stream of European capital suddenly dried up: so also the stream of immigration. Indeed, the supply of labour in the Atlantic States, especially in the River Plate, dropped below the normal after Italy joined the Allies. Scarcity of shipping, together with the diversion to war purposes of all European energies, diminished the exportation from South America of all commodities not absolutely needed by the Allies for the prosecution of the war. Imports from Europe were restricted. Germany, which had ranked third among outside nations trading with the continent, dropped out altogether, with the exception of the devious and struggling efforts already noted. To the nations of South America what had seemed the natural and regular order of things was suddenly suspended. They were thrown upon their own resources; they were compelled to take stock of their position and to face an unprecedented situation. They must manage their finances without European help; they must provide their own labour. As to things hitherto imported from Europe, they must either provide these things themselves or go without. The shock was severe, but it must be allowed to have been a wholesome shock. It has stopped public over-borrowing and has put some check on extravagance of public spending. It has favoured private thrift and has compelled those who were perhaps over light-hearted and materialistic to take life more seriously. The Argentine family, which formerly provided separate motor-cars for father, mother and each son and daughter, has now to be content with one or none. The luxurious trip to Paris or London, with its corollary of mountainous shopping, is abandoned, and a more modest holiday is spent at the seaside or in the mountains at home. The daily story, flashed along the cables from Europe, of strife, of heroism, of self-sacrifice, conduces to reflection and grave judgment. Finally, the meaning of the struggle has been now brought home to every South American people. Every one of them is closely touched by the recent developments of maritime warfare. Every one is forced to come to a decision. Whatever that decision may be, whether it be for open war, or limited participation, or rupture of relations, or complete neutrality, that decision is expectantly watched by the whole world and adds its weight in the balance of the great trial. The effect must be a graver sense of national responsibility, a more sober consciousness of national dignity.
The economic recovery, which followed the first shock, favoured this national consolidation and development. Imports diminished, whereas the urgent demand of the Allies for foodstuffs and raw materials soon produced, in most of the states, a great expansion in the value, if not in the volume of exports. Hence a favourable trade balance and an increase in wealth. These conditions encouraged that movement of industrial enterprise which everywhere sought to supply, by the exploitation of home products and by the development of home manufactures, the needs which had been hitherto supplied by importation from abroad. Examples, taken mostly from the A.B.C. countries, will best illustrate this industrial movement, which has been one of the most notable effects of the war.
Argentina felt deeply the shock of August 1914. The outbreak of war fell like a bomb in the midst of a serious financial depression, due to speculation, extravagance and over-borrowing. The trouble was intensified by drought and by two bad harvests, and more recently by widespread strikes accompanied by destructive violence. But the crisis has compelled the Argentines to rely upon themselves, to restrict extravagances and to push forward the industrial development of their own resources. Thus, the diminution in the supply of English coal has led to the search for native coal, to the use of native petroleum and native fire-wood. Lessened timber imports mean the exploitation of native forests. A considerable quantity of native wool is now spun and woven in the country, and home manufacture generally is increasing. Thus the country is richer and more industrious than ever before. It is true that this wholesome recovery is not yet reflected in the national finances, which are still disordered by extravagance, over-borrowing, improvident budgets, and now by the diminished receipts from customs. However, one very interesting event deserves special mention—the credit or loan granted by the Argentine Government to the Allies for the purchase of the present harvest. Since Argentine Government loans are mostly held in Western Europe, the debt can be discharged with equal benefit to both sides, by simply taking over the obligations of the Argentine Government on this side of the Atlantic. Even more remarkable is the spontaneous offer made to Great Britain by the Uruguayan Government of a large credit for the purchase of the Uruguayan harvest. Thus, these two debtor nations have actually become creditors to Europe, and are proceeding to gather into national ownership a large part of the national debt. Uruguay is taking another and most striking step towards economic consolidation. She is preparing to avail herself of the growing national wealth and the increased value of the Uruguayan dollar in order to buy up enterprises owned by foreigners within her territory, particularly the railways, which are mostly in British hands. It may here be noted that this economic movement in Uruguay coincides with a radical and democratic reform of the constitution, a nearer intimacy with her Latin neighbours, an approach to the United States, and also closer relations with Europe through the abandonment of neutrality and the signature of unconditional treaties of arbitration with France and Great Britain.