After all this accomplished in so short a space of time, who will continue to throw the reproach of “Mañana” at either Argentines or Uruguayans? A reproach long since unjustified by the attitude of the inhabitants of either of the River Plate Republics towards any matter the advantages of which they grasp.
No European Statesmen and Bankers could have more promptly realized and carried out the necessary measures for the economic protection of their country.
The present of Argentina and Uruguay was thus assured. What of their future?
Prophecy, which is generally counted as hazardous, is especially so when it is about to be printed, and may still be read by the light of the experience of several years hence. Still, some Commercial and Financial angels have not feared to tread the ground of prophecy as to the immediate and post-bellum future of Argentina and Uruguay; and not only has competent authority not feared to forecast results in this regard, but there is a remarkable unanimity of influential opinion as to the probably favourable effects of European affairs on the economy of the River Plate Republic. Always supposing, as there seems every reason to suppose, that these Republics continue to have the commercial and common sense to manage their internal affairs in such manner as to be able to derive the greatest possible pecuniary benefits from the troubles of European nations.
One, perhaps the chief, in his courage of declaration of these prophetic authorities is Mr. C. A. Tornquist; a man having very large financial and commercial interests on the River Plate and enjoying a very high local reputation for business acumen and honour. His whole life has been spent in the higher financial circles of Argentina.
Therefore the author has thought well to cite here some portions of an article published by him in the Argentine Press, a translation of which appeared in The Review of the River Plate, under date December 25th, 1914.
In this article Mr. Tornquist says:—
From this chaos (that of the European War) there will arise perhaps an Asiatic country, and, quite certainly, some American countries, and in the first place the Argentine Republic, which, on account of the class and special conditions of its products, is called upon to benefit from the situation more than any other country in the world, as even the United States cannot export in any quantity the noble products produced by Argentina as they require them for home consumption. This war not only does not create difficulties for our economic development, as will happen to nearly all the other countries in the world, but, on the contrary, it will stimulate it, and for this reason, the longer the war lasts the more our national economy will gain at the expense, sad as it is to say it, of the countries now at war. Whilst the war lasts the prices of the majority of our products will not decline, for many of the countries which produce the same goods as we do are at war, and on this account the demand is bound to increase. The first effects of this advantageous situation will bring about the disappearance of what we call here “crisis,” but which is nothing more than a “commercial indigestion,” brought about by excessive speculation, and which has principally affected speculators, and has done absolutely no harm to pastoral or agricultural industries, which are our principal sources of wealth. … It cannot be said that a country is in “crisis” when its vital forces are in full development. This does not mean, nevertheless, what many erroneously think, that if the next crop is good they will be able in 1915 to sell their lands in the vicinity of cities and summer resorts and speculative regions at the prices ruling when they purchased them. Nothing of this will occur, and only the value of revenue-producing property will normalize itself, and will be placed at a value corresponding to a return of 8 to 9 per cent per annum. On the other hand, I believe that several, perhaps many, years will pass before it will be possible to liquidate properties which do not give revenue at the prices which their owners desire. … A favourable factor which might become important, perhaps in the not distant future, is the immigration of the “capitalist” farmer from Belgium and other European countries, who prefer to liquidate their affairs there and come to Argentina with what remains to them, and so get away from the taxes which of necessity the Government of the conquering or conquered countries must impose so as to re-establish their finances. It is a very interesting fact for ourselves that after all large wars or revolutions in Europe in modern times there has been an enormous increase of good immigration in new countries, and especially to America, from which the United States has been the first to benefit, because in that epoch the future of South America was based solely on the gold mines of Peru and the coffee and diamonds of Brazil, whilst the Argentine Republic was only known by its “sterile Pampa and Patagonia,” and its internal revolutions. To-day these things have changed, and if any country is to interest the capitalist immigrant it will without doubt in the first place be the Argentine Republic, because it is in the best condition to receive them, especially if they are convinced that the value of property is not inflated. It is the duty of our Government to make all this known to future immigrants by means of serious propaganda. … Then we shall have to struggle against the lack of tonnage for exporting our crop, but we should not forget that whereas to export with regularity is for us an economic question, for the belligerent countries, purchasers of our produce, the matter is of vital importance, as it is a material question not to die of hunger, and of indispensable necessity to be able to carry on the war, so that those countries are even more interested than ourselves that we should be able to dispose of the necessary means of transport. We take as our basis of the probable assets of our balance of payments an exportation to the value of $580,000,000 gold. At first sight this figure appears high, but let us analyse it. Our record of exports was in 1912-13 $513,500,000 gold, of which $306,000,000 corresponded to cereals and the remainder to produce not affected by locusts, droughts, rain or frost, that is to say, the crop of that year represented $306,000,000 gold for produce exported, and we will suppose $104,000,000 remained in the country, making a total of $410,000,000. If the crop of this year should be 25 per cent less than our “record” crop we should have “at the prices of that time” $307,000,000 as the value of the harvest, and there would remain, deducting what the country requires for consumption and seed, over $200,000,000 for export. But the actual prices and those in perspective are 25 per cent higher than the others, so that would give $250,000,000 for exports of cereals, besides which there are the other products (meat, wool, hides, tallow, etc.), which then represented a value of $207,000,000 gold, and which to-day are worth 20 per cent more, that is to say, $250,000,000 gold, making a total of $500,000,000 gold. To this we must add the value of 2,500,000 tons of maize, the balance of last year’s crop which remained to be exported on October 1st, 1914; the possible value of the export of horses; the value of the sugar exported, which is more than 60,000 tons, and which will probably be duplicated; the export of woven goods (ponchos, cloths, etc.) and articles of saddlery and tanned goods for the European governments; alcohol and other products of lesser importance, which come under the heading of extraordinary exports. It would not therefore be at all extraordinary if we reached $600,000,000 or even passed that figure, which will be the case if our harvest exceeds our estimate. … If the crop turned out to be a “bad” one[6] (that is to say, that it failed in certain parts, as due to the great extension of area, it is not possible to-day for a whole crop to be lost) and it only results in 50 per cent of that of 1912-13, we should still obtain a total value of $205,000,000, and there would remain after deducting the necessities for home requirements $100,000,000 gold for export, calculated on prices of two years ago, but in this case the prices would rise much more than 25 per cent, and for this reason the consumption of cereals in the country, as well as imports in general, would show such a marked decrease, that the favourable superavit in the balance of payments would never completely disappear.
I take as my starting-point the sum of $460,000,000 gold, made up as follows:—[7]
(a) Imports $270,000,000 gold. (b) Service of the Public Debt payable abroad $50,000,000 gold. (c) Interest on Cedulas and on capital placed by foreign companies on mortgage $31,000,000 gold. (d) Interest and dividends on foreign capital in railways $42,000,000 gold. (e) Interest and dividends on other foreign capital $27,000,000 gold. (f) Savings of immigrants and emigrants $24,000,000 gold. (g) Expenses of Argentines abroad $6,000,000 gold.