Sugar cane was brought to the La Plata region by the Jesuits, and it appears in the records of the Santo Domingo monastery that sugar was manufactured in Tucumán as early as 1670. After the banishment of the Jesuits nearly one hundred years later, the industry quickly declined, in fact as late as 1871 the total production of Argentina did not exceed 1000 tons. Development in Tucumán followed the completion of the railway, which opened outside markets to the planters of the province in 1876. Railway transportation facilities brought in modern factory equipment and machinery. As a result numerous small primitive mills were eliminated and their owners turned to sugar-cane growing.
Stimulated by a heavy protective tariff, the cane-producing area in Tucumán increased from 12,000 to 104,000 acres between 1881 and 1896, and in other provinces the industry made substantial progress. By 1894 the output exceeded the country’s requirements. This led the government to concede an export bounty in 1896, and a syndicate called the Unión Azucarera was formed by the producers, who agreed to deliver to it 60 per cent of their product. From 1896 to 1904 exports of sugar varied from 15,000 to 50,000 tons per annum. Conditions changed, however. The other South American countries would not buy Argentine sugar, the United States had fixed a countervailing duty on all bounty-fed sugars, and Great Britain was contemplating their exclusion entirely. To save the situation, therefore, it was decided to curtail the output, and the following plan was adopted:
BATTERY OF BOILERS, INGENIO LA TRINIDAD, TUCUMÁN, ARGENTINA
HOME OF SUPERINTENDENT OF A SUGAR PLANTATION, TUCUMÁN, ARGENTINA
An arbitrary amount was fixed as the total production of the factories in operation, and this tonnage was prorated among them according to their capacity. Upon every 100 kilograms (220.46 lbs.) produced in excess of the allotment, a tax equivalent to 48¾ cents[80] was levied, and factories where operations were not started until after the passage of the law were taxed at this rate upon 25 per cent of their output. The fund raised in this way furnished the compensation for the growers who destroyed their cane crops or left them unharvested. A certain sum was applied to the payment of export bounty[81] and the remainder went into the national treasury.
The Brussels convention, by its provision for countervailing duties, nullified the effect of the export bounty and in 1905 the export privileges were withdrawn.
In 1912 the import duty was established at 3.85 cents gold per pound for 96-degree sugars and 2.977 cents per pound for sugars testing under 96 degrees. A yearly reduction of about one-tenth of a cent per pound was provided for until the rate of 96-degree sugars shall reach 3.0645 cents per pound, and that for those under 96 degrees 2.19 cents. Countervailing duties were also imposed on foreign bounty-fed sugars.