RAILWAY CARRIAGE, BUENOS AIRES CENTRAL RAILWAY.
Of the remaining lines the most important are a group of northern railways. The Cordoba Central Railway is metre gauge and is divided into two sections. The "Original Line" is 128½ miles long and was formed in 1887 to connect Cordoba with San Francisco. The latter is an important town half-way between Cordoba and Santa Fé. Shortly afterwards the Company bought the Central Northern Railway from the Argentine Government at a cost of £3,174,603, and also spent about a million sterling on improving the line which runs from Cordoba to Tucuman and has a length of 550 miles. In 1899 the purchase was effected of the North-Western Argentine Railway, a loop-line from Tucuman to La Madrid, length 87 miles. The "Original Line," after leaving Cordoba, passes through a poor and sparsely inhabited country, and this section could be of little value but for the terminus at San Francisco. However, it is economically managed and shows a profit of £800 per mile. The longer section also, between Cordoba and Tucuman, runs through a poor country, but in compensation it has the valuable sugar traffic of the latter city. Sugar forms a quarter and timber nearly two-fifths of its goods traffic. Closely connected with it is the Cordoba and Rosario Railway, which is also metre gauge and connects Rosario with Frontera on the "Original Line." There is also a branch line to Rafaela, which links up with the Central Argentine and the French lines. In 1895 the capital had to be reorganised, and there can be no doubt that it has not yet seen its best days, for it will have to wait for the development of the auxiliary lines which form the connecting links between Tucuman and the capital. But in any case they have to face very severe competition from the Argentine Central and the French lines. It is open to doubt whether the connection with Buenos Aires itself is necessary, for there are already a bewildering number of lines serving the district between Buenos Aires and Rosario, and at harvest-time there is immense congestion at the former place. In fact, the trend of commerce seems to be rather towards the diversion of bulky exports from the capital and the directing of them to Rosario and Bahia Blanca. This criticism receives point from the position of the newly opened Cordoba Central Buenos Aires Extension Railway, upon which the up-country allied lines largely depend for their success. This cumbrously named Company was formed in 1905 to acquire a concession granted by Government to the Cordoba Central Railway to build a metre-gauge line of 187 miles. It runs parallel with the Central Argentine system between Buenos Aires and Rosario, and it was only recently opened. Its district is, of course, one of the very richest in the country, consisting of fine agricultural and grazing land in the zone of black soil. But, as already stated, there is strong competition, and this not only from the other lines, but also from the river, which follows it from end to end. Now the dock of this Company at the capital will not be finished till the end of 1910, and the Company is at present renting accommodation and therefore suffering considerable inconvenience. The work of reclaiming land and dock building is being done by the Buenos Aires and Pacific, and the cost will be about a million sterling. The office of the Company also is to cost £225,000, but a large part of this will be let off. Every large company naturally wishes to have its headquarters in Buenos Aires, but in this case the question arises as to whether the game is worth the candle. Few lines have had to pay more heavily for obtaining their extension privileges; the ordinary stock has been watered to a considerable degree and bonds of the value of three and a half million sterling have been issued. To meet the interest upon these bonds alone its profits will have to be £175,000, and thus a profit of £935 per mile is postulated. To obtain such a profit under economical management the gross receipts will have to be £389,000, or nearly £2,100 per mile, and no broad-gauge line in Argentina has yet reached this figure. In 1909 its gross receipts were only £1,613, its net £654 per mile, but as the line is only in its infancy these figures must not be taken as a criterion. However, the payment of a large dividend on the ordinary stock appears to be a remote eventuality.
VIEW OF MARSHY COUNTRY, BUENOS AIRES CENTRAL RAILWAY.
Numerous small lines, chiefly Government or French, have been incidentally mentioned, but they do not require detailed description.[95]
No account of the railways would be complete without a reference to the important Mitre Law, which was introduced some two years ago. Some of the railway concessions were expiring, and several provincial Governments (which are not always as enlightened as the Federal) were believed to be planning increased taxation. Legislation was accordingly introduced to put matters upon a proper footing. Such companies as accept the Law are granted exception from all kinds of taxation and allowed free importation of all materials till 1947. In return the companies must pay a tax of 3 per cent. upon net receipts, which, however, will be applied by the Government in constructing and maintaining bridges and roads which give access to the lines. Certain rights of tariff revision are given to the Government, and no watered capital is recognised. The Law is most valuable to the railways, and the expenditure on roads and bridges will be highly beneficial. The effect will be to limit working expenses, for when the gross earnings for three consecutive years exceed 17 per cent. of the recognised share and debenture capital, the Government has a right to revise the tariffs. The Law has been accepted by all the English companies except the Entre Rios and the Argentine North-Eastern.
The above account will show that competition is very severe. This tends to bring down profits, and the cost of labour and coal and materials also makes the working expenses high. The extensions of the broad-gauge companies are, it is estimated, to cost £9,000 per mile for track and stations alone. Another fact which adds to the expenses is the necessity of keeping a very large rolling stock for use during harvest-times. This must, in part, stand idle for the rest of the year, and as a corollary to this the great bulk of the traffic is to the sea, and thus many wagons have to return inland empty. Passenger traffic, again, is light, owing to the sparse population. The Government naturally encourages competition; but its attitude has also a very favourable side, for it puts no obstacles in the way of construction, and does not attempt to bleed the companies. Of this the Mitre Law is an example. On the whole, it may be said that the great ability which has hitherto been shown in railway policy will have to be maintained at the highest point if profits and dividends are to be kept up.