As regards the travellers sent out by English firms, they are often inadequately equipped for the work they have to perform. Knowledge of the language, coupled with knowledge of the article whose sale they have come to promote, and an ability to quote credit terms offhand in terms of dollars and kilos, are important. Too much reliance is often placed on written matter which a busy merchant has no time to read. A descriptive pamphlet or book is an extremely valuable adjunct to an obvious price list and an intelligent traveller. But by itself it is of little value.
A further point, and one of some importance, is that Argentines expect immediate delivery of orders. Recently a large English motor car firm opened an agency in Buenos Aires. The cars were much admired, and as they were well boomed at an opportune moment, a great many orders were secured. Owing, however, to considerable delay in delivery, these were withdrawn, and the orders were transferred to French firms.
Finally, a word must be said of proprietary articles. In these no fault can be found with British manufacturers. Soap, lime juice, whisky, mustard, jam, and even soda water and ginger beer, are among the special products that may be seen almost anywhere throughout the country, and this branch of trade is capable of even greater development with judicious advertising. In particular, jam is invariably liked by Argentines of all classes, and were it pushed a very large consumption might follow. At present there is only one firm of any note whose products are seen in the shops. The same may be said of biscuits, although both in this and in the former case, the high tariff (about 50% to 60% of the value) would be a great restriction.
[CHAPTER VII.]
THE TARIFF.
Argentina is professedly a protectionist country. It is also professedly Republican, with a philosophic ideal of the greatest good of the greatest number. The two ideas, however, have not achieved a complete harmony. This was perhaps inevitable. Curiously enough, the vital industries of the country have not been favoured in any way by the fiscal system, which has been used to foster exotics and economic growths hardly suited to the conditions of the country.
In the Argentine there can be no question of “Back to the Land”; there has never been any departure. But until the present chief of the Department of Commerce began his campaign for a rational tariff, there seems to have been a tacit assumption that factories constituted wealth. That the country should remain permanently agricultural was never advised. It was assumed that it must manufacture, and on this assumption the national policy was directed. As a matter of fact, there was probably no reasoned determination at all. Some industries existed originally before communication was established on the present great scale with the rest of the world. As time went on these suffered from outside competition, and protection was invoked and secured. Other industries were then started speculatively and for them similar protection was granted. If prevailing opinion is of any value, it was even impossible for an industry to succeed except by political jobbery. Even now the evil appears to be very far from removed, and the difficulties experienced by the English Railway companies are partly attributable to this cause. These have consistently refused to bribe, and it may be said that almost without exception they have adhered to this rule. The nearest approach to this form of persuasion is the nomination of influential Argentines to the local board of the company, and the retention of prominent lawyers for nominal services at a fixed yearly fee. Except for this no attempt is made to secure support in congress, and in all probability no payment has ever been made or promised by an English company in return for particular support for a definite proposal. The great privileges which the railways enjoy, especially in the matter of tariff, were granted in pursuit of a declared policy of encouragement to railway enterprise—a policy which no one there has reason to regret, as without it the country would never have emerged from its former lethargy.
With the exception of railway material, which for the most part, comes in duty free, all manufactured articles pay a very heavy duty indeed. But, whereas in almost every other country of note, some portion at least of the raw material is procurable locally, or at least from no great distance, in the Argentine the most elementary of basic materials have to be imported. With the exception of wool, grain, cattle, a special quality of timber, and sugar, there are no raw materials at all available for industrial purposes. There are no minerals; cotton is a negligible quantity at present; and fuel is as expensive as labour. Coal does not exist (at least to a workable extent, if at all); petroleum, though reported in parts of the Cordillera, is non-existent for all practical purposes; while wood is found in any quantity only in the forests in the North, North East, in Entre Rios, and in parts of Córdoba and San Luis. The expense of carrying this to the capital would be prohibitive except by boat from the riverine forests. And, in any case, the wood being slow-growing and intensely hard, it would be manifestly uneconomical to use anything but the trimmings as firewood.
We have, then, a country with a highly protective tariff compelled to import by far the greater part of its fuel, which, though admitted free, is necessarily burdened with freights prohibitive to economic industrial development. The Argentine, indeed, may be said to be placed, geographically, in the worst position possible for such a purpose. Keeping, then, the question of fuel in mind, the possible advantage (from the purely economic point of view) must be examined of reducing at home to the state of finished commodities the raw materials mentioned above.
In every case of manufacture, the two obvious economic reasons are either the ability to produce better or the ability to produce cheaper. The former is out of the question in the Argentine, because there is no hereditary or traditional skill, nor special climatic conditions as in Manchester; the latter, for the same reason, can only be a question of freight. Any article to be consumed at home, and produced mainly from native raw material should, prima facie, be capable of production at home for that consumption, granted an adequate supply of labour. But, for export, general conditions being at best only equal to those in the importing countries, the only circumstances which could render home-manufacture profitable would be greater liability to deterioration in transit in the raw material than in the finished article, or a great saving in bulk or weight in the latter.
Taking the raw materials, therefore, in the order given above, the wool produced or procurable in Argentina is greatly in excess of the present local requirements. What skill there is in the country for spinning and weaving is insignificant for practical purposes, the articles produced being either extremely crude, or quite exceptionally fine, and consequently expensive. Both are the work of Indians, or half-castes—who are rapidly becoming a smaller and smaller proportion of the total population. Passing by as inconsiderable, therefore, the advantage of home production on the score of special skill, there remains the question of cheapness. For some goods, special lines of purely local popularity, which European houses would not make for other customers, there are points in favour of local production. But in such things as socks and articles of general clothing, that command a universal market (with differences only in design), it is found cheaper to import. It must be added that there is comparatively little demand for woollen goods at all in the Argentine itself. Though the tariff, therefore, does not impose a great burden on the people, from its protective aspect it is encouraging an unprofitable industry.