The Amazing Argentine: A New Land of Enterprise

When we were in the sugar-cane district we saw hundreds of tawny-skinned men cutting the cane. Armed with an instrument which seemed to be half knife and half butcher's chopper, the peon seized the top of a cane, cut it off near the root, gave it a swing in the air, and with rapid slashes removed the protruding leaves, and then pitched the stalk on one side, where a heap was lying to be gathered by women and children and carried to the waiting wagons.

Twice we halted to watch the dexterity of the cutters and to visit the mud huts. These were picturesque but not pretty. They looked like disreputable brick-kilns, and although possessed of a door, were deficient in windows. The interior was dark, but most of the family spend their time out of doors under the trees, where they have their fires and prepare maté, the native tea, which is served in a shell and sucked through a tube. Whenever the natives have nothing else to do you are sure to find them drinking maté.

Around Tucuman are twenty-five sugar mills, and it is reckoned they produce 200,000 tons of sugar, of which between 60,000 and 70,000 tons are exported. We went to the fine mills at San Pablo belonging to Nouges Brothers, and the senior partner was good enough to show me over the place, so that I could inspect the whole process, from the arrival of the cane until the sugar is loaded in sacks ready to be sent to Buenos Aires.

The stalks, as high as a man, are thrown into a machine which literally chews them up. As they pass through heavy rollers they crunch and crack, and yield their juice which runs in a nasty brown fluid into a trough. Again the mashed-up cane is subjected to further squeezings between rollers, until practically the last drop of the syrup is squeezed out. The treacle-like stuff is run into big basins beneath which furnaces are blazing, and is kept at a simmer until the sugar reaches the consistency of dough. After that it is sluiced into highly heated steel cups, which are constantly whirling.

It is interesting to stand by in the sickly-sweet atmosphere and watch how, in the constant spinning and evaporation from the heat, the stuff loses much of its brown appearance and becomes, when thoroughly dried, like the cheap brown sugar as we know it at home. It is further refined in other hot chambers until it is quite white. Then men with sacks catch the stream of sugar as it rushes from the mouth of the refinery. Much of it is spilt, and the men are up to their boots in sugar. But the bags are quickly filled, pushed on one side, sewn up, hastened on lorries to waiting carts, which, when loaded, convey the freight to the railway wagons close by. Señor Nouges told me that at that time his firm was turning out 175 tons of sugar a day.

The sugar-cane must have plenty of sun and water. The rivers I saw during harvest time were miserable, shallow streams, meandering their way through what looked like a broad boulder-strewn bed of what once had been a wide stream. I was there, however, in the dry season, but was told that in the rainy season these streams are increased a thousandfold in volume, are frequently a quarter of a mile wide, and, when the torrents are heavy, overflow their banks and inundate the land. Irrigation is carried to a high point, so that in times of flood the waters of the rivers can be conveyed many miles and utilised in providing moisture to the cane.

It has only been in comparatively recent years that the possibilities of the extensive region of North Argentina, of which Tucuman is the centre, in regard to sugar have been realised. There is the initial expense of clearing the ground of jungle, and providing irrigation. Once, however, this has been done, and the cane planted, a paying crop is obtained the first year. The same roots grow useful stalks for three or four years, and then comes the process of gradually planting new roots and removing the old ones so that the same soil can be made productive. Weeds are numerous, and in the early months of growth these have to be constantly removed, first of all to prevent their smothering the young shoots, and secondly to give the cane all the nutriment there is in the soil. There is also the danger of invasion by locusts, and the occasional possibility in the cold months – say about May and June – of frost doing injury to the saplings. Allowing, however, for these disadvantages, the advance in the sugar industry in Argentina during the last dozen years has been nothing short of amazing. Still, I could not help feeling that the industry is only in its infancy. As soon as the foreigner appreciates what northern Argentina can do – at present most of the sugar growing is in the hands of Spanish-Argentines – there will certainly be enormous development. One of the things which will appeal to the foreign capitalist who takes up sugar growing on an extensive scale is that there is a quick return on the money invested in development.

Though Tucuman is the capital of the sugar growing interest, it may be said there are plenty of areas equally favourable for raising the cane. Sugar growing at Tucuman began about thirty years ago, long before the railway ever reached the place, and to meet purely local demands; because in those days the transport of imported sugar, as of other goods, by cart was expensive. When the railway put Tucuman into near communication with other parts of the Republic, the possibilities of a great trade were at once recognised. Tucuman sugar, however, could not in those days compete, either in quality or price, with that which came from other countries. It was, therefore, decided to give encouragement to Argentine sugar growing by a tariff on sugar which came from across sea. As one who favours the saving of a struggling industry in a home country from being strangled by vigorous foreign competition, I believe this was the right thing to do. Sugar growing bounded ahead. Not many years elapsed before the sugar growers became a powerful combination, with much influence on the Government. The result was that, whilst at the start the duty on imported sugar was small, it was gradually increased until it became prohibitive. Therefore at the present time very little foreign sugar comes into the country, and the Argentine industry has gone ahead in a remarkable manner.

Mr. N. L. Watson, in his publication "The Argentine as a Market," describes how Tucuman became a veritable El Dorado. Two years sufficed to give a net return four times as great as the capital invested. As a natural consequence, labour and capital flowed into the sugar districts. Lawyers deserted their professions, workmen their tools, to throw themselves with a regular fever into an occupation so full of promise. Works sprang up as if by magic, palaces were constructed to house the staffs, capital was lavished on the industry by individuals and banking houses alike. While fortunes were being created in the cultivation of the sugar-cane, orchards, orange crops, pasturage, and arable land were being either transformed or neglected.

Something like a trust has been formed amongst the sugar growers, with the object of maintaining prices. But public opinion is becoming so pronounced that, whilst there is no disposition to let the foreigner come in and undersell the native production, the tariff should be reduced in order that there may be more competition between the native and outside growers, with a slight advantage always given to the Argentine grower. The Republic is quite capable of growing all the sugar its inhabitants may require; but fair competition from the sugar of other countries will do much to regulate prices.

CHAPTER XXI

THE INDUSTRIAL SIDE OF THE REPUBLIC

The main energies of Argentina must for some time be devoted to her most obvious source of wealth. Yet it would be unwise to neglect a consideration of her industrial possibilities. Naturally she is anxious to supply herself with the commodities essential to daily life and comfort. But up to the present the Argentine has relied chiefly upon the exchange of its products, even for commodities which might be produced at home. This is due to the tendency common to new countries of going in for the "big deal." In this sense the agricultural industry has still a long journey to go. Intensive culture has so far not become a necessity. Extensive culture has yielded such good profits that no impulse has been given to the full exploitation of Argentina's hidden resources. This partly explains why the casual observer is confronted with the apparent anomaly of vegetables, fruit, eggs, and other foodstuffs being dear in an agricultural country.

It is on the lines of finishing her existing industries, attending to by-products as well as main products, that the foundations of Argentina's industrial future will best be laid. The immediate obstacle is the scarcity of labour. The essential requirements already exist, a good climate, excellent means of communication, a growing population, an open Custom House for most of the machinery and implements required for national industries, and a stable credit.

Few countries have been able to inaugurate home industries under more favourable auspices. Nothing can deprive Argentina of her agricultural eminence. But how she will fare when embarking upon the more uncertain career of a home manufacturer depends upon many things. Necessity is already driving Argentina seriously to face the problem of producing for herself her more obvious needs. The comparatively high cost of living is a growing trouble. Infant though she may be industrially, Argentina has already experienced the evils of industrial unrest. The principal manifestations have been in Buenos Aires, which, in addition to being the port and the centre of national activities, has been the storm centre of the rush to exploit her resources. It is the pulse of the Republic. Like other great cities, it is crying out against the diminishing value of the dollar.

Argentina's readiness for home manufactures is an urgent problem confronting the Government. The Government wants a more all-round development of the country's resources. Interwoven with this problem are important considerations: a more equable distribution of the population; the provision of more centres for the exchange of commodities; the relation between taxes for revenue and protective tariffs; the selection of what industries are to be established at an economic profit; the extent to which foreign manufacturers can be induced to start their industries within the Republic.

So far, the only industries that have continued with success are those producing articles difficult of transport, or of an expensive character. With a greater mobility of trade in the country, and a more scientific manipulation of the tariff, there is no reason why Argentina should not provide herself with many of the things which to-day furnish the labour agitator with opportunities for tirades against "costly living." Backed by agricultural wealth, and supported by splendid railway facilities, Argentina should be able to make advance on particular lines. Take wool as an illustration. Argentina produces more than sufficient for her own requirements, and yet she obtains woollen goods from other countries. Is it to be taken as final that the absence of coal in the country makes the development of woollen industries at home an economic impossibility? It is not, perhaps, so much a question of labour and initiative as the absence of natural advantages.

It is necessary to look farther afield than Buenos Aires in considering the chances of a new industry. The concentration of trade in the capital has probably been a hindrance. The congestion of all interests, commercial, political, and social, in "B.A." has caused land to increase enormously in value, an important consideration in setting up factories. In turn, other charges are correspondingly increased. Trade rises and falls according to the season. There is less stability for the worker, more fluctuations for the trader.

But, with railways linking up the interior with the coast, there is now no necessity for the drama of Argentina's commerce to be confined to a single theatre. There must be more centres of exchange, fresh districts for production and manufacture. If the auxiliary industries to corn growing and cattle raising were better fostered there would be no necessity for inland towns to go to Buenos Aires for vegetables, eggs, cheese, butter, and poultry. The market garden, the dairy, the poultry farm, the orchard, and the auxiliary factories would pour their products into the provincial centres. Local needs would be met locally. The surplus would be sent on with the grain and the cattle to the markets at Buenos Aires.

These, after all, are probably the safest lines upon which a new country can travel in her march to greater economic independence. First the purely agricultural; then the by-products of agriculture as a supplement; then gradually the establishment of whatever manufactures are practicable and profitable. For the present Argentina has greater need for cheaper eatables than for cheaper motor-cars.

Countries doing a big trade with the Argentine are beginning to see the force of providing goods on the spot. The crowding of agents in the principal towns has increased competition to a point at which the next move by certain competitors must be in the direction of producing in the country or losing the trade entirely. This will be all the better for Argentina. She has long had justifiable cause for complaint against those who are sent to Buenos Aires and other parts to barter for her trade. A well-worn lament in the reports of the British Consul concerns the English trader's lack of adaptability to the peculiar conditions of Argentina. Mention is made of quotations in English, the sending of representatives unacquainted with the language and business terms of the country, the adherence to methods applicable only to England.

On the other hand, the British exporter has grumbled at economic conditions calling for long and sometimes exaggerated credit; the taxes levied on commercial travellers; the difficulty of dealing direct with customers. Between the two points of view is the fact that commercial enterprise has stopped with the arrival of trade representatives in Buenos Aires.

The Argentine has already made shots at industry building. Tangible signs of an industrial future were visible on many occasions during my tour. Tall and smoking chimneys and busy factories for tinned meats, clothing, and boots were evidences of the start already made. Before, however, an advance can go towards full development there must be a more definite scheme of working, and a clearer apprehension of the end in view. There are, for example, greater possibilities for brewing and distilling. A recent census showed that these two activities engaged about 160 factories. Sugar, too, has proved for itself that when worked on proper lines it is a most profitable industry. Sugar-canes, formerly exported for others to refine, are now refined in the country, where the product finds a ready market.

It would be well-nigh hopeless for Argentina to attempt the introduction of industries to compete in her own market with well-established foreign industries of the same kind without the aid of tariff protection. This might mean a temporary loss in revenue by checking imports; but compensation would come through the success of the home industry. At the present time Argentina exports in raw wool over £10,000,000 worth annually. She imports woollen goods worth nearly £3,000,000. Her imports are increasing and her export of raw material decreasing. In ten years the latter fell considerably in actual bulk, through the rush to make quicker money from meat. Meanwhile, the question arises as to why Argentina should not prepare and manufacture woollen goods for home needs? The existing market is a large one. Textile industries already exist. They are few, but the fact that the number of establishments has increased is a clear proof that textile industries can be profitable. The opportunities here presented for the investment of capital are invaluable. There is room for new and increasing enterprises in a growing country with many years of growth before it.

It is essential to all industrial expansion that a country's credit should be good and its currency stable. Argentina is well off in this respect. Contrasted with some other American republics, in which revolution, revolt, and financial distress are painfully frequent, Argentina is a political and financial paradise. This stability, if not in itself an inducement to the investment of capital, is at any rate a guarantee that capital may be invested with safety. And in these days safety itself is a big inducement. Paper dollars form the everyday currency of the country. Careful provision has been made to establish the paper in circulation on a definite gold basis. Since the Caja de Conversion, the Government institution for the issue, exchange, and conversion of the paper currency, was established in 1899, the paper dollar has always been worth $.44 gold (between 1s. 8d. and 1s. 9d.). Certain specified resources are appropriated for the formation of a conversion fund, which guarantees the paper currency.

During the latter part of 1913 there was a considerable shipment of English sovereigns to the Republic. Under the Pellegrini Law passed in 1902 the Caja de Conversion must hold in gold an equivalent to the paper money in circulation. Indeed, the National Conversion Office, the National Bank of Argentina, the London and River Plate Bank and other banks had in June, 1913, an accumulation of gold amounting to £67,188,039. The gold in the Caja de Conversion began with the insignificant sum of £568 on December 31st, 1902; in 1904 it was just over £10,000,000; the next year it was up to over £18,000,000, and on June 30th, 1913, it was £53,306,866.

Argentina has a number of well-established banks, affording many facilities for the development of trade and industrial enterprise. One of the principal, the Banco Hipotecario Nacional, makes a feature of special loans for building and land improvements. Its loans are made on the mortgages of property by the issue of bearer bonds in lieu of cash to persons mortgaging properties to the bank. It need not be feared, therefore, that industrial enterprises of reasonable prospects will starve for the want of financial credit during the difficult years of inauguration. On the contrary, there is a good supply of money waiting fresh outlets. Bankers realise that it is to their own as well as to the country's advantage to have a wide field of financial operations. They have the money if others have the enterprise and the initiative.

The point has now been reached at which manufactories might well be harnessed to agriculture not only for the fuller working of Argentina's resources, but for remedying some of the social difficulties that have arisen through her relying too much upon one source of wealth.

CHAPTER XXII

THE NORTH-EAST COUNTRY

Although travellers in the Republic usually visit Rosario, it is seldom they devote much time to studying the full capabilities of the province of Santa Fé, of which Rosario is the chief town. Yet Santa Fé and Corrientes to the north, and Entre Rios to the east, deserve much more than passing recognition.

Though in the north of Santa Fé, towards the region of the Chaco, there are thick forests, the southern part is treeless, except for the ombu, and is a plain with rich pasturage and soil. Along the side of the province runs the Parana River, which can be ascended by flat-bottomed stern wheel vessels for many hundreds of miles; and from ports like those of Santa Fé and Villa Constitucion much agricultural produce in maize, wheat, linseed, and barley are dispatched. The sugar industry is gradually creeping into Santa Fé province. Nearly fifty flour mills have been erected, and there are also sawmills, meat preserving factories, and works for quebracho extracts. Though railways are penetrating in all directions through the province, having at the present time 3,000 miles of lines, the River Parana is, and long will be, the chief highway, because circumstances in the old times led to the principal towns being constructed on its banks, and because some of its tributaries are also navigable for a considerable distance.

The Parana River stretches away north into Corrientes. There are places with tremendous areas of well-watered pastures; but the farther north one journeys the more the country becomes swampy and covered with heavy forest. The vegetation is tropical, and parrots with gay plumage disturb the silence of the woods with their shrieks.

It is here that the forest Indians are to be found, particularly the Tobas and the Matacos. Formerly the tribes kept to their own territory; but with the coming of the white man, and particularly the importation of Russians, Poles, and Scandinavians to work in the lumber camps, this custom has gradually been broken down. The Indians resent the presence of the intruders, and there is many a black story of massacre. The forest Indians cannot be induced to work in the hewing of timber, but missionaries are doing a great deal in persuading them to take to farming and raising crops of maize or bananas.

The Indians near the towns on the Parana River are taking to wearing European clothes. In the time of the sugar harvest in the west they will work for a month or so, but on their tramp back of several hundred miles they frequently fall out with one another, and there is fierce fighting and murdering of which the outer world never hears. Far in the forests, up to the present but little penetrated, the Indians are found in their original state, naked save for a loin cloth, producing fire by the rubbing of sticks, still utilising bows and arrows in warfare, and following the practice when an enemy has been slain of cutting off his head and using the skull as a drinking bowl.

All this may seem to suggest that Corrientes is a somewhat forbidding province, especially as much of its territory is marshy. For instance, Lake Ibera and its marshes covers an area of something like 15,000 square miles. The vegetation is dense, the climate is bad, and there is little to attract man unless he be a sportsman. But so vast is the province that there are wide areas which are very productive, because the province is well provided with rivers and streams.

There are in the province about 5,000,000 head of cattle, over 3,000,000 sheep, and about 600,000 horses. Besides cattle, there are the timber trade and the sugar industry, also tobacco growing, to be counted amongst its sources of revenue.

It was only in 1908 that the province of Entre Rios entered the Republic. As will be gathered from its name, the province lies "between rivers," the Parana and Uruguay, both of which are navigable for many hundreds of miles. There are many smaller rivers which, although not much good for traffic, are most useful in watering the country. Entre Rios has as fertile a soil as will be found in any part of the Republic. The country is more picturesque than can be said of Argentina as a whole, and with its many farms it is often reminiscent of England. In the north there are extensive forests; indeed, one-fifth of the province is covered with valuable timber. Agricultural products and live stock are, as elsewhere, the chief source of prosperity.

In the more pleasant undulating parts of the province there are many prosperous estancias, often in the possession of Englishmen. Here, more than in any other place in the Republic, are to be found small freeholds owned by Austrian, Poles, Russians, and Scandinavians. The Spanish and Italian Argentines seem to have left most of this area to north Europeans, who in many cases retain the costumes of the countries from which they emigrated. Formerly Entre Rios had a bad name because of the stories of the way in which the old settlers shot every Indian on sight. That, however, is a page now far back in the history of the land.

Until comparatively recent times the only communication with the outer world was by means of the rivers. Now, as mentioned, Entre Rios has a fine railway system. The capital of the province, Parana, is a happy-looking, clean town, with exquisite gardens and, of course, the usual theatre and band.

Most of the meat extract supplied to the world by the Liebig and Bovril companies comes from Entre Rios. Both these companies own great estancias to breed cattle for the purposes of their business. Liebigs, which afterwards changed its name to Lemco, practically built the town of Fray Bentos, where there were schools, public halls, and, altogether, a model settlement. Subsequently, however, the works were removed to Colon. The Lemco company own eighteen great estates, covering 1,750,000 acres with nearly 400,000 head of cattle. The area of their estates is nearly equal to that of Kent and Surrey.