The colonist, whether breeder or farmer, is not left to himself. Colonization is sustained and directed by speculation in land, and is influenced by it. Speculation discounts the work of the colonist, and attaches to the land a value which is not based upon the revenue it has produced, but upon that which the speculator calculates that it may produce in the future. If the speculator is audacious, he does not let himself be discouraged by initial bad experiences; it takes repeated checks to exhaust his optimism. The colonist, even if his farming accounts do not show a profit, may nevertheless gain something if the value of his land goes up. The increase of his capital conceals from him the smallness of his returns, especially as he can easily get advances on the value of his property from the banks, and this enables him to draw upon his wealth every year.

Speculation is concerned with new lands on the fringe of the area already colonized, where the soil is, as a general rule, already in the hands of the exploiters themselves. The speculators, having paid a high price for these lands, try to organize the development of them. It is partly owing to their influence that colonization continuously enlarges its domain, instead of concentrating its labour in the older districts where it might sometimes be more productive. In fine, speculation in land has a profound influence on the conditions of colonization, making it more difficult for the colonist to buy the land he is developing. The owner who grants him the use of the land means to keep for himself any increment of its value. He rents, but he will not sell.

Thus the history of colonization cannot be separated from the traffic in land. The special features of this traffic in the Pampean region—its concentration at Buenos Aires; the creation of a land-market resembling a stock market; the practice of selling on the instalment plan, which enables small capitalists to enter the market; the repeated transfers of pieces of land which the buyers have never seen and which they know only from plans—are one of the most original aspects of modern Argentina. They are partly due to a fact of a geographical nature—the uniformity of the Pampean plain, on which every piece of land is worth about as much as the adjoining piece.

Colonization is easy and rapid in proportion as it requires less capital and labour. The expansion of breeding in the west between 1880 and 1890 was facilitated by the low market price of cattle at that time. Breeding has the advantage over farming of not needing so large a staff, but it requires a larger capital. Of the crops, assuming that the conditions of soil and climate are equally favourable, wheat is better than maize for colonization, because the preparing of the soil and the harvest can be done more speedily, and the same number of hands can plant a larger area with wheat than with maize.

The action of the Argentine Government and the provincial authorities has been restrained, apart from the earliest period of the establishment of the Santa Fé colonies, both as regards the securing of immigrants, the distribution of lands, and the administration of the colonies.[101] Colonization has been, on the whole, a private affair. The work of organizing colonization has at times been undertaken by the proprietors themselves; they leased pieces of land and got a good price for them, at the same time increasing the surplus value of the plots they kept for themselves by promoting the increase of population. Sometimes it was undertaken by Colonization Companies, which bought land to divide and sell. More frequently it was undertaken by merchants who advanced credit to the colonists they settled, on condition that the colonists bought what they needed of the merchants, and entrusted them with the sale of their crops. The migration of the Santa Fé colonists was partly due to, and sustained by, a corresponding migration of merchants who had acquired wealth in the older colonies, and who thus got a larger body of customers. The merchant who organizes colonization often acts as the intermediary between the owner and the colonist, guaranteeing the owner a fixed rent for his land and receiving so much per cent. of his harvest from the farmer. This system is very widespread in the corn belt, but it is found all over the plain of the Pampas. It tends to disappear when the colony is older and deeper-rooted, as the colonist gradually earns his independence; he buys his lease, his equipment, and his furniture, and controls the sale of his own crops. In the districts where he has not become owner, the leases are generally variations of two types: farming leases, where the colonist has capital enough for working, and renting leases, where the capital is provided by the owner or the middleman.

Lastly, colonization can make no progress unless it finds markets on which it can put its produce. Up to the present western Europe has been the chief market for the wool, leather, meat, and cereals of the Pampean region; tropical America absorbs part of the output of the saladeros, flour, and dry fodder; and North America has recently begun to compete with Europe for wool, leather, and frozen meat. The facility with which the products of the Pampa have found their way into the world's markets, as is seen in the comparative stability of the returns, explains the continuous advance of colonization and the short duration of the crises which have disturbed it.

The home market, however, has had an importance in connection with colonization that must not be overlooked. When wheat-growing spread at Santa Fé the crop was at first devoted to supplying Buenos Aires, and as late as 1883 Zeballos thought that the essential result of agricultural colonization was the fact that Chilean flour was beaten off the Argentine market. Even to-day the districts on the outskirts of the cereal area depend upon the home market. The Villa Mercedes mill supplies Mendoza. Córdoba and Santa Fé send their flour to Tucumán. The price of cereals still shows slight fluctuations in these parts as compared with prices in Buenos Aires.

19011905191019131914
Wheat9042,8681,8832,812980
Maize1,1122,2222,6604,8063,542
Flax3386546041,016841
Flour7114411512467
Wool228191150120117
Salted hides2840616563
Dried hides2624292114
Chilled beef44152253306368
Chilled mutton6378754558