CHAPTER XVI
BUSINESS PROSPECTS IN ARGENTINA, PARAGUAY, AND CHILE
The object of these travels was not to see the country dealt with as much as it was to study the business conditions and future possibilities in those lines in Chile, Argentina, and Paraguay.
Although there are undoubtedly great opportunities at the present time and in the future to enter into business enterprises in the northern republics of South America, which as yet, only have their surface towards development, the republics farther south which are partially developed, offer better inducements owing to their forms of government, the character of the races who inhabit them, and the incentives which are offered to the foreigner who wishes to start a new industry. With the exception of Argentina and Uruguay there is practically no manufacturing done on a large scale, such as we are accustomed to see on all sides in the United States and in Europe. There are many small industries employing from three to twenty men, providing the employers with not much more than a good living, and the employees with a mere subsistence, but there are no really large ones which are a credit to their country.
To start anything in any of these countries, the matter of prime importance is for the proprietor and his foreign employees to be able to converse fluently, read, and write in Spanish. Next he should understand the character of the Latin races which is not at all easy if he is prejudiced. Their ways of doing business are totally different from ours. Also owing to the scarcity of money in some of these republics, the new firm should have plenty of ready capital, and should never organize with a limited amount, the outstanding balance being made up of notes. To sell preferred stock to the natives would be nearly impossible, because no Latin would buy any unless he is "shown" first, and this "showing" would have to cover a period of a great many years, so susceptible are they of making investments. The company should be entirely capitalized with the cash paid in before the first stroke of business is begun. Many firms in South America have come to grief by being only partially capitalized, and their example is always before the native mind. Competing trusts and grafting politicians should be reckoned with. Many large firms give as a present to the governor of a province, or to the deputy in congress, a few shares of their stock. These men in turn make laws which benefit their company, and make it impossible for competitors to transact a legitimate business.
As Argentina offers less opportunities in the manufacturing line than its neighboring sister republics, it is best to deal with it first. To begin with, the country is a great expanse of land, for the most part in appearance a level plain, gradually rising as one travels westward. This rise is but two feet to the mile and is imperceptible. This plain is traversed by quite a few rivers, but so slowly does the land rise, that these streams are nothing more than sluggish watercourses, muddy, and affording no drainage. They often overflow their banks, forming muddy ponds and lakes a few inches deep. On account of the slowness of their flow they are valueless for waterpower. This part of the country is therefore not adaptable for factories; its sole use is for the growing of grain and stock-raising. Although this is one of the greatest wheat belts in the world, it has no flour mills, and but few grain elevators. The wheat is shipped a long distance by rail to the seaport towns, whence it is exported to Europe. That which is needed for local consumption is ground into flour in the seaports which have mills; much of it is shipped back over the same road that it went out on to be distributed over the sections where the grain was grown. The towns here are small and far apart. Their only excuse for an existence is that they are the distributing points for an agricultural section and to them the necessities of life are shipped which eventually find their way to the large estancias as the farms are called. To these towns grain is hauled to be shipped out by the railroad. Stores spring up, a hotel or two is built, a few professional men such as doctors and lawyers establish themselves, but nobody ever thinks of starting a factory. It would be folly to do so, because there is no future besides agriculture and stock. There is no fuel, no iron, and no waterpower.
West of the great Argentine plain we reach the mountains. The Andes here are the highest peaks in all America. They rise abruptly from the plain like a barrier and have no foothills. There are but few rivers in this section, and those which do exist are swiftly flowing, turbulent streams. They can furnish waterpower and some of them do for electricity. Yet there are no factories. It is again the question of the scarcity of fuel. So poor is Argentina in her fuel supply that most of the locomotives burn wood. The coal used for those which run in the eastern provinces is imported from Europe and the United States. Oil fields have been opened in Patagonia with a view of decreasing the price of fuel, but as yet they are in the embryo stage. It is not known whether they will ever be made an economic asset, because the quality of the oil is said to be poor. The country at the foot of the Andes near the latitudinal center of Argentina which is watered by the mountain streams is called the Zona del Riego. It is here that are located the extensive vineyards and fruit orchards. There are three separate belts each of which is fed by its own river. The two southernmost of these are in the Province of Mendoza, at San Rafael and Mendoza respectively, while the northern one, is at San Juan in the province of the same name. Factories which do not require an excessive amount of fuel could be started, but nobody has ever turned over their hands in that direction excepting in fruit-canning plants, which have not paid well.
In the city of Mendoza a flour mill could be made to pay. There are immense flour mills in Argentina, but with the exception of a few small ones of no importance and the large one of the Minetti Brothers at Córdoba, all are located on the seaboard. The Molino del Rio de la Plata at Buenos Aires has a capital of $14,945,000. It is the largest in South America. Nearly as large are two flour mills in Bahia Blanca; Rosario also has a couple of large mills. For a quarter of a million dollars a flour mill could be established at Mendoza, which the manager of the Molino del Rio de la Plata, told me would pay forty per cent. on the capital from the start, and which would be dependent on no other trade than that of the city of Mendoza. At San Juan, one hundred miles north of Mendoza, there is a small flour mill which is a lucrative investment. The beauty of having a mill in Mendoza is the fact that the wheat grown there, although inferior to that which is grown on the plains on account of its having to be irrigated, runs forty bushels to the acre and would be in close proximity to the mill, thereby saving freight. People in the Province of Mendoza who grow wheat ship their product to Buenos Aires where it is ground. The flour is then shipped back seven hundred miles to Mendoza where it sells for a high price, the freight rate being enormous. Tucumán is a city of over one hundred thousand inhabitants but has no flour mill worthy of the name. One would pay in that city but it would require much more capital both on account of the size of the city and its distance from the wheat fields. Mercedes, Bragado, Olavarría, Junin, and many other towns of their size (twenty thousand population and upwards) could all support flour mills. They have none and are in the heart of the grain belt. Wood would have to be used for fuel which would be expensive, but the profits derived from the flour would offset it. Pergamino is a growing town in the grain belt between Buenos Aires and Rosario, with good railroad facilities, yet it has not a single manufacturing enterprise. It has a population of forty-three thousand inhabitants. Personally I think that the flour mill proposition would be the best paying enterprise in Argentina. It would pay at all times, war or no war.
One of the leading manufacturing industries in Argentina is that of the beef-canning factories, here called saladerias. This is the chief industry of Uruguay, and the second in importance in Paraguay, and the state of Matto Grosso, Brazil. These saladerias not only can beef, but they manufacture beef extract, tallow, and the by-products of the hides and fat. They likewise ship cold-storage beef to Europe and even to the United States. The River Plate basin is where these factories are situated, and in no other parts of South America are they to be found. Armour & Company, and Swift have large ones at La Plata. At Fray Bentos, in Uruguay, on the Uruguay River a short distance above where it flows into the River Plate is the great establishment and headquarters of the Liebig Company, the largest of its kind in South America and one of the largest in the world. There are beef-canning plants at Montevideo, at Colon, Argentina, and at many of the ports on the Uruguay, Paraná, and Paraguay Rivers. These plants require much capital, especially in Argentina, because here the river is at quite a distance from the stock country, necessitating the shipment of cattle by rail. It would be prohibitory as far as expense goes to establish a beef-canning enterprise inland; by having them at the seaports, ocean-going freighters can anchor at the docks and be loaded there. This is true about many of the river ports owing to the depth of the water which permits ocean steamers to reach them. None of the Argentina and Uruguayan saladerias are far enough up the rivers to be beyond ocean navigation. The Uruguayan plants have it on those of Argentina, because the stock country of the former republic lies directly behind the saladerias and is contingent to the river. In Argentina the stock have to be transported to the seaboard upwards of one hundred miles, and in most cases from two to four hundred miles.
Regarding stock-raising, it is done in Argentina on a large scale. The large estancias are owned by people who have inherited their lands through several generations and have in the past decades accumulated great fortunes which have been sufficient to well stock their estates with cattle, sheep, and other live stock. The stock roam the prairies the year around, are not winter fed, and require but little care. As many of these estancias are forty miles square, the only expense incurred are the wages of the herders. Land is held high in Argentina, from $15 an acre upwards in the stock country, the average being $35 an acre. It would require much capital to buy enough of it for a fair-sized ranch. Fifteen hundred acres would cost $45,000. If he put 1000 head of stock on it, which would be a small ranch, his outlay for the investment would be about $90,000. A drought would be likely to occur and he would be up against it. The man, however, who has a 50,000-acre ranch could make money. He could have 10,000 head of cattle and if there was a drought he could keep moving them about. Twenty thousand acres is but a medium-sized ranch in Argentina and Uruguay. It is not uncommon for a man to have 100,000 acres, while in Patagonia there are ranches of 1,000,000 acres. Stock-raising is the most important industry in Argentina, but the men who have made a success of it and those at present engaged in it, started this business years ago. Excepting in the Province of Salta, it is well for a company or an individual to keep out of this line of business unless he has enough money to buy a large tract of land. The figures here are the average for estancias contiguous to the average plains towns.
-----------------+---------------+-------+---------+-------+-------- _Town_ | _Ranch_ |_Acres_| _Horses_|_Sheep_|_Cattle_ -----------------+---------------+-------+---------+-------+-------- Olavarría |Santo Domingo | 12,500| 1,000 | 3,000 | 700 |La Victoria | 18,375| 1,700 |17,000 | 6,000 |San Antonio | 12,500| 700 | 2,500 | 1,500 | | | | | Coronel Suarez |La Curamalan | 43,750| 4,000 | 8,000 | 5,000 |San Jose | 25,000| 400 |10,000 | 300 | | | | | General La Madrid|La Colina | 80,000| 400 |60,000 | 20,000 |El Huascar | 31,250| 200 | 5,000 | 3,000 |La Fe | 31,250| 300 | 6,000 | 15,000 | | | | | Saavedra |La Turigueta | 30,000| | 5,000 | |La Landade | 12,500| | 2,000 | | | | | | Dorrego |Tres de Febrero| 37,500| |16,000 | 3,000 |Las Cortaderas | 52,500| |13,500 | 15,000 |La Sirena | 50,000| |20,000 | 16,000 | | | | | Lobos |La Florida | 3,750| | 3,000 | 1,000 |La Morada | 18,750| | 7,000 | 3,000 | | | | | 25 de Mayo |Huetel |162,500| 2,000 |10,000 | 15,000 |Santa Clara |100,000| 1,000 |10,000 | 1,500 | | | | | Bolivar |La Carmelita | 87,500| 80 |17,000 | 14,000 |La Florida | 43,750| 1,000 |12,000 | 5,000 |Miramar | 25,000| 150 | 2,000 | 600 |El Cardon | 18,750| 250 | 7,000 | 3,000 |Bella Vista | 12,500| 300 | 5,000 | 2,000 | | | | | Junin |La Pastoril | 37,500| | | 15,000 |El Cisne | 75,000| | | 25,000 |Las Dos Marias | 6,250| | | 4,000
The Province of Salta is about one thousand miles from Buenos Aires and the seaport towns. On account of its distance and nature of its land it has nothing in common with the provinces farther south. It is a hilly and mountainous region bordering on the tropics abounding in forests which have a thick matting of grasses. The cattle are large and lean, and although their beef is rather tough, there is plenty of it, and there is but little shrinkage in transportation. The market for this stock is the nitrate region of Chile. The cattle are driven across the Andes and lose but little weight on the way. In Antofagasta they bring a good price. There are no large ranches in the province and there is not much capital. Here a man with moderate means could raise stock at a profit, if he dealt only with the Chilean market. If he shipped them to the saladerias in the Province of Buenos Aires he would lose money on account of the freight.
An embryo industry in Argentina is that of tannin or tannic acid, used for dyeing and tanning. The northern part of the provinces of Santiago del Estero and Santa Fé, and the greater part of the territories of Formosa and the Chaco, are covered with a forest of small trees, named _quebracho_. They are too small for saw logs, their wood is hard and is used for fuel on the railroads, and they have a reddish bark. This bark before the European War was shipped to Germany in great quantities where its extract was used in dye stuffs. Unfortunately but little of it was exported to other countries. Some tannin factories were inaugurated in the Province of Santa Fé, but those controlled by foreign capital went haywire. This was due mainly to grafting provincial officials who put these companies out of commission by their annoyances. A tannin factory would pay in Argentina if the government would give it protection. It is a deplorable fact that in many new industries in Argentina, they are induced to locate there. Once established, the manufacturer is subjected to a burdening taxation from the federal government, the province, and the district. There is a continuous drain of contributions which have to be handed to congressmen, and their henchmen; titles are found to be imperfect; law suits are started; the outcome is that the company is apt to go into insolvency. This once happened to a large tannin factory that started in the Province of Santa Fé. A Buenos Aires bank loaned them money; but the owners ran up against so many snags when they started to operate, that they were unable to pay their indebtedness and the bank had to foreclose. It would be a different story if the company was Argentine owned. The Argentino from the highest to the lowest looks upon the North American as a person to exploit from. They welcome him mainly to relieve him of his money. When we talk about grafting in our American cities we do not know what grafting is; one must come to Latin America to get the interpretation. George W. Crichfield in his two volumes, _American Supremacy_ (Brentano's 1908), gives the true version. He says that our best diplomats are to the South American ones in comparison as what jackasses are to foxes. This is particularly true about Argentina and could apply to the grafting officials as well. Although under proper government protection, a tannin factory in Argentina would pay, it would be useless to wait for that protection to come, and the manufacturer would be far better off if he would start his factory in poor, benighted Paraguay where the grafting would be much less than in Argentina.
In Argentina there is no such thing as prohibition and local option, and there probably never will be. Such issues are not in common with the Latin make-up, and the long-haired stump orators and hypocrites who advocate this question in the United States for their own personal enrichment, would undoubtedly land in insane asylums if they started this propaganda anywhere in South America. One might think it strange that there is no whiskey distillery there, yet such is the fact, and I do not know of any in entire South America. Whiskey is not consumed there in anywhere near the quantity that it is consumed in the United States and Great Britain, yet enough is indulged in by the higher stratum of society who ape the North Americans and the British to warrant the establishment of one. There is plenty of grain and there is no competition. There are several liqueur factories which seem to pay, one of which at Buenos Aires puts out a cordial named Aperital, which has a great sale.
There are thirteen breweries in the republic, but lest a person should think of starting another one, he should forget the idea at the same time that he conceives it. There is a brewery trust heavily capitalized, composed of Argentine and British stockholders. Much of this stock is in the hands of senators and congressmen, who see to it that laws are made which protect them and work to the detriment of their competitors. The Argentine Brewing Company at Quilmes, a suburb of Buenos Aires, heads this trust, the other members of which are the Bieckert Brewing Company at Llavallol, another suburb of Buenos Aires, the Palermo Brewery at Buenos Aires, the San Carlos Brewery at San Carlos, and the Del Norte Brewery at Tucumán. Those not belonging to the trust are the Córdoba Brewing Company at Córdoba, the Rio Segundo Brewing Company with breweries both at Córdoba and at Rio Segundo, the Ahrens Brewery at Córdoba, the Santa Fé Brewing Company at Santa Fé, the Schlau and the Germania Brewery at Rosario, and the Correntino Brewery at Corrientes. Both the Ahrens and the Correntino breweries are small establishments and only cater to local and family trade and therefore have not fell foul of the trust.
Since much beer is drunk in Argentina I have often wondered why there were no more breweries. I wondered why Mendoza, Salta, Bahia Blanca, Mercedes, Pergamino, Paraná, Concordia, and other towns did not have any. I mentioned this fact to the mayor of Salta. "It would not pay," said he. "An old German named Glueck once had a brewery in this town, whose product took well with the public. His was a small brewery with limited capital. The Quilmes Company, through their representatives in congress, had taxes formulated so that only those breweries with much capital could stand up under them. Glueck had to go out of business. The trust then built the Del Norte Brewery in Tucumán which is so large that if all the other breweries in Argentina should shut down, it could supply the whole republic with beer. The trust also bought a piece of property in Salta and threaten if another brewery starts up in this city to put up one that will swamp it. The trust has millions of pesos capital, so what can one do?"
While in Córdoba I was a guest of Mr. Douglas, president of the Rio Segundo Brewing Company. This company started a brewery on a small scale at the town of Rio Segundo, hence the name. The water used for the manufacture of its beer came from an artesian well, and the product was so superior to that of the other breweries that it was necessary to build another brewery, which was done at Córdoba, twenty-three miles away. The water in this is also artesian. The output of the Rio Segundo Brewery at Córdoba is only sixty thousand barrels a year, but it is taxed more than those whose output is six hundred thousand barrels in the United States. It has kept its head above water on account of the quality of the beer. A former brewmaster of this company started a small brewery in Corrientes, the Correntino, but this like that of Ahrens at Córdoba have not been molested by the trust because they are too small to interfere with the business of the Quilmes Company. With the exception of the output of the Rio Segundo breweries, all the Argentine beer is vile and not fit to drink. Hops are difficult to get, and injurious chemicals are used for its preservation.
Two automobile factories have been started in Buenos Aires but their existence was of but a short duration. The parts were shipped there to be assembled, but the stockholders thought that it would be more lucrative if they manufactured their own parts. Since there is no iron in the republic, it was found that its importation was too expensive to allow the companies to ship it in, therefore they went out of business.
Hides are not expensive. There are many small so-called shoe factories which in reality are but shops; the shoes manufactured in them are good and cheap, and are made by hand. They likewise have class, and a shoeman from Toronto told me that the shoes manufactured there were superior to ours, and the United States has the reputation of making the best shoes in the world. This Canadian said that he could see no reason why a fair-sized shoe factory would not pay in Buenos Aires and was very optimistic about the idea.
In the Province of Tucumán there are considerable sugar factories, some of them large ones. The cane is inferior to that of Cuba and the West Indies; most of the available land for its growing is taken up, and the sugar market is often poor. None of the sugar is refined in the district where it grows, there being only one refinery in Argentina and that is at Rosario. The product is shipped to England and France to be refined. It is doubtful if another mill would pay, but another refinery and that in the city of Tucumán might be profitable. There are no beet-sugar factories, but much of the land, especially that in Entre Rios and Corrientes, is adaptable for beet culture, so there is no reason why an establishment of that kind could not be made to pay.
Although Argentina has a great network of railways running throughout the republic so that practically no place of any importance is in lack of transportation facilities, yet interurban street-car lines are nonexistent. The only one in operation is that which runs between Buenos Aires and Quilmes, a distance of fourteen miles. One is being built to Tigre, twenty-two miles from Buenos Aires, but is not yet in operation. There should be electric lines between Buenos Aires and La Plata, Buenos Aires and Rosario, either via San Nicolás or Pergamino, Buenos Aires and Mercedes, Bahia Blanca and Puerto Belgrano, Mendoza and San Rafael, Tucumán and Tafí Viejo, and also a network of lines of which Tucumán should be the center of the hub.
There are quite a few cigarette and a few cigar factories. The cigarettes manufactured are vile, likewise the cigars. This trade is in the hands of Turks, Spaniards, and Italians, and the tobacco used is grown in Brazil. There are good tobacco lands in the provinces of Salta, Jujuy, Corrientes, and in the Territory of Misiones, but none is grown excepting in gardens from which the owner makes cigars for his own personal use. The price paid for cigars is exorbitant and a good live factory well capitalized might pay. Nobody smokes a pipe nor chews tobacco, therefore a tobacco factory would be unsuitable.
There is no field in the newspaper or periodical line in all South America. This and the publishing business is overdone. Some towns of ten thousand people have four or five daily papers. Every politician that can afford it is the proprietor of his own newspaper, in whose columns he attacks everybody who does not hold his own political views. These newspapers often run foul of the government and wind up by having their publications suppressed and the editor thrown in jail.
Paraguay, on account of its small population and scarcity of money, offers a much less diversified variety for future enterprises than does Argentina. The leading industry is the culture of yerba maté, and the exportation of its leaves. This republic lies close to the tropics and is covered with a dense vegetation. In the southeastern part of the country in the neighborhood of the Alto Paraná River, there grows in its native state the plant yerba maté, from whose leaves from time immemorial the Indians brewed a tea. The leaves are first dried, and then steeped in a kettle or pot. Calabash gourds grow wild in abundance. These are dried, the top is cut off, and the insides scooped out. The hot tea is poured into these gourds which every individual possesses, and the infusion is sucked from them by means of straws and reeds, by the poorer classes, and by bombillas by the upper and middle classes. A bombilla is a metal tube with a small covered spoonlike head which is perforated with small holes. This maté drinking habit, which is considered beneficial, is indulged in universally by everybody in Paraguay, Argentina, Uruguay, and southern Brazil. There are several different varieties of yerba maté, and it has been found that that which is cultivated is better than that which grows wild. Hence there are enormous plantations for its culture which are called yerbales. Large companies have been formed for its production and exportation, that of Domingo Barthe being the best known. His brand is named Asuncion. The next best-known firm is the Industriel Paraguaya. Both are capitalized heavily and have their main offices in Asuncion and Villa Encarnacion with branch offices throughout Argentina. Barthe is a very wealthy man; he was formerly a French adventurer who struck it rich through none too scrupulous means. His latest trick was to sell a lot of his maté under the trademark of the Industriel Paraguaya. This was done at Rosario. He was tried there and found guilty. He was sentenced to one year in jail and to pay a fine of two hundred thousand dollars. Before they could get him, he got into Paraguay where he is immune from the Argentine law. He owns a fleet of steamers plying between Montevideo and Asuncion which touch at Argentine ports. On these he is safe since his steamship line is not incorporated in Argentina. Nevertheless Barthe has helped advance progress and industry in Argentina and this should not have been overlooked when sentence was pronounced upon him. At that time he was about to build a million-dollar hotel at Posadas. Although what he did was unprincipled, his sentence was twenty-fold too severe, and shows plainly that the Argentine bloodsuckers are out to exploit the foreigners for every cent they can get out of them.
There are in Paraguay boundless tracks of virgin soil suitable for yerbales. It requires but little expense to work them and there is an unlimited market for Paraguayan tea. It is said that the Argentine army is going to adopt yerba maté to be distributed among the soldiers for their daily rations. This tea-drinking craze among the natives is uncanny. To many of them it is life; the foreigner, however, rarely acquires the habit, although he partakes of it for the sake of sociability while in Paraguay.
Next in line among Paraguay's industries is the saladerias. The whole country covered with a thick matting of grasses is a paradise for cattle. Land is inexpensive, the pasturage is better than in Argentina, and more stock can be raised to the acre. Here and in Matto Grosso, a future stock country, the grazing lands come down to the great waterways, and although the river boats are of low draught necessitating a rehandling at the seaport towns, canned beef can be shipped direct from the saladerias in the stock country.
Tannin is a more staple industry than in Argentina although it is still in embryo. The writer had an opportunity to engage in this manufacture, which he nearly took up; in ordinary times it would have been all right, but at this particular time there was a change in Paraguayan politics and the manufacture of tannic acid was handicapped by the European War. A Barcelona Spaniard, Señor Andres Pujol, president of the Banco Constructador del Paraguay and a friend of the writer, was held in high esteem by the then dictator, Señor Eduardo Schaerer. One of the large brick buildings owned by the Hernandarias and Frias Brewery at Puerto Sajonia, on the outskirts of Asuncion, was vacated in favor of a modern brewery plant in the city. Its machinery could be used in the manufacture of tannic acid and the plant could have been bought for a song. It was the idea of Señor Pujol for he and myself to buy this building and erect, in connection with it, a sawmill. We were to pay for quebracho logs delivered at the plant from which we were to strip the bark, from which we were to extract the tannin. At that time Asuncion was having most of its new streets paved with quebracho blocks. We were to give Señor Schaerer stock in the company and in return he was to give us a franchise to furnish the paving material which we would manufacture by cutting up the logs at the sawmill. We were also to be exempt from taxes for a number of years. Soon after this Schaerer was succeeded in the presidency by Dr. Manuel Franco, a native, and it was likely that he would undo everything that Schaerer did, in which case our franchise would not amount to a picayune. This combined with the present prospects of no shipment of tannic acid to foreign parts caused me not to inaugurate this enterprise, which will still be open to anybody. The best time to start this is soon after the election of a popular president, because in the four years during which he will hold office, there will be plenty of time in which to accumulate a fortune.
The future manufacturing and commercial opportunities in Chile is utterly different and far brighter than in any other South American country. Chile has a decidedly bright future and at the present time only lacks capital to develop her resources. Business conditions are much better; there is more snap to her people; there is less graft and it is a cheaper country to live in. To this is added the fact that the climate is good. Topographically and geographically this republic can be divided into three distinct zones. Beginning at its extreme north and running down the coast one-third of its whole longitude is the rainless zone. This is a vast forbidding desert, interspersed at varying distances by a few oases. The mountains begin at the ocean and gradually rise in steep ranges until a maximum of twenty thousand feet is attained in a hundred and fifty miles at the eastern boundary which is the Argentine frontier. Twenty miles back from the ocean are plateaus averaging from two thousand to five thousand feet high which furnish most of the world's nitrate supply. This nitrate is from two to six feet underneath the surface of the soil and is supposed to be the manure of birds that infested this region in pre-glacial periods. From these fields is derived much of the wealth of the country. Many of the older nitrate fields have become exhausted, especially those farthest north on the Iquique Pampa, but new ones are constantly being opened up to the south of the old workings and from them is due the importance of Antofagasta. It was to acquire these nitrate deposits that Chile declared war upon Bolivia and Peru in 1879 which caused them to change hands. It is a blessing to that part of the country that it never rains, because if it did, the nitrate deposits would be washed away. This zone is hot.
The second zone is that which begins immediately south of the rainless one and which extends another third of the length of the country down the coast. It consists of a coast range of mountains timbered with conifers and small hardwood trees, the mountain peaks rarely rising above three thousand feet in altitude. Beyond them is the great longitudinal valley from thirty to fifty miles in width. Here are situated most of the towns and two thirds of the country's population. This is the granary of the republic, and it is here that are located the great vineyards, the fruit farms, and the small manufacturing industries. This zone has a sufficiency of annual precipitation but climatically is divided into two seasons, the dry and the rainy one. During the winter months from May to October there are frequent rains while the rest of the year it seldom rains, although showers are likely to occur at any time, these being of more frequent prevalence the farther south one goes.
The remaining zone which reaches the remaining distance of the coast line as far as Cape Horn is an archipelago and a narrow strip of land extending inland about fifty miles to the Argentine frontier. This district is a mountainous mass, indented by many bays and fiords, well timbered, but so steep are the mountains that come down to the water's edge that there are no towns and but few places where habitations can be built. A great part of this region is unexplored. It undoubtedly is rich in mineral deposits but its inaccessibility has kept it from being developed. The annual rainfall is great but this diminishes towards the southern apex. In winter there are heavy snowfalls, while the tops of the mountains possess innumerable glaciers.
Chile is rich in minerals. Some of its mines have been worked ever since the Spanish conquest and new fields are constantly being opened. In the arid north copper is found behind Gatico and at Chuquicamata, the Guggenheim interests being at the latter place. There are copper mines in the provinces of Atacama, and Coquimbo, and at the headwaters of the Cauquenes River in the Province of Colchagua is the large productive mine of the Braden Copper Company. There are iron mines at La Higuera in the Province of Coquimbo and coal mines at Lota, in the Province of Concepcion. Silver and gold is found throughout the whole republic in paying quantities. Next to nitrate and minerals, vineyards play the most important part. From the Province of Aconcagua southward 250 miles, grapes play a great rôle, yet but little wine is exported. The southern provinces and the Central Valley produce an abundance of wheat, rye, and barley, but owing to an inadequate market, it is a gamble whether the farmer will lose or make a profit on his crops.
What Chile needs more than capital is immigration. Her increase in population has been small, likewise her immigration. The European immigrant lands at Buenos Aires and seeks employment in Argentina, while if he crossed the Andes into Chile, he would find a land where he could make a better living for himself and buy some of the most fertile land in this universe for a cheap price. Southern Chile has a large population of German descent who have done remarkably well, but the great number of Spaniards and Italians who yearly immigrate to the republics of South America's eastern littoral are here conspicuous by their absence.
In manufactures, the breweries are Chile's largest industry. There is a brewery trust in Chile, like in Argentina, but it is nowhere near so strong nor so well capitalized. It consists of La Calera Brewery at La Calera, the Valdivia Breweries Company at Valdivia, the Andres Ebner Brewery at Santiago, the Floto Brewery at La Serena and the Limache-Cousiño Brewery at Limache, which is the largest in Chile. A fact which shows that the trust is not strong is that all the independent breweries have done well. Aubel's Brewery at Osorno, and Keller's Breweries at Concepcion and Talca are large ones. There are many small breweries such as Petersen's at Punta Arenas, Julius Jenson's at Chillán, and Horstmann's at Santiago. Much beer is drunk in Chile, and there is plenty of grain, so after the war there will be an excellent opportunity of starting a brewery. The only drawback has been the supply of malt and hops which comes from foreign countries and which the brewers have been unable to procure in sufficient quantities in recent years owing to the freight shortage.
Santiago is a city of over four hundred thousand inhabitants yet only has two breweries, that of Ebner which belongs to the trust and that of Horstmann which does not. Horstmann before the war got a supply of hops large enough to last him six years if his brewery ran at its full capacity. He is an old man who has amassed all the money he wants, and his heirs have no inclination to continue the business. In 1917 he could have been bought out at a very reasonable price and I believe the same holds true to-day. His business has been a family trade and his beer is said to be the best in Chile. Since there is small likelihood of Chile ever going prohibition, here is a chance for somebody. Valparaiso has no brewery on account of its water being too hard. I have no doubt but that a brewery at either Chillán, which has only one small brewery, or at Curicó which has no brewery, would pay. Temuco, Los Angeles, San Fernando, and Linares could support breweries. In northern Chile there are no breweries excepting one at La Serena, yet either Antofagasta or Iquique would be ideal spots for one. The water in these cities has to be piped in from a distance of 150 miles, yet since there is sufficient to supply other establishments there would be enough to supply breweries. Copiapó is likewise well situated for a brewery. It could be made the central distributing point for other towns such as Antofagasta, Taltal, Chañaral, Vallenar, and Huasco. The output could be shipped to its seaport Caldera, and thence along the coast to the other towns in case of a shortage of freight cars. In Chile as in the United States the breweries buy saloon licenses to put into business men who handle only their goods, but unlike in the United States, saloons play no part in politics, and with the exception of the sailors' dives in the seaports they are run in strict accordance with the law. The violations that I have mentioned in this book occurred in Antofagasta which has the reputation of being a notoriously tough town.
A business with a future and which could be made profitable is an enamel works and tin-ware factory. In all South America, business signs, doctors' signs, street names, and house numbers are of enamelled tin. Most of the kitchen ware, bathtubs, and chamber sets are of the same article. There is an enamel ware works at Valparaiso and another one at Santiago. The latter is the Esmaltadera Chilena, managed by Don Federigo Reddoehl. This would be a paying proposition but so far lacks capital. The heaviest interest is owned by a senator named Charme, but the other stockholders could be bought out at par. Chile is dependent upon the United States for its sheet-iron and tin supply; the war has put a damper on this, but as soon as shipments can be renewed, there is no reason why an enterprise of this kind would not be a good investment.
Unfortunately Chile's timber is hardwood, so lumber mills would not pay. It is dependent on its lumber for building purposes from the United States. Although there is much hardwood, the floors are tile or cement, which is much cheaper there than oak or maple, and since the ordinary pocket-book cannot afford to pay the price of the latter, a hardwood flooring plant would be negative.
In the south there are plenty of small flour mills but there are but few in the Central Valley. Since much grain goes to waste and since flour is in demand, more of these small mills could be started, but none of the cities near to the grain supply are large enough to warrant large mills.
Chile is not a stock country. Cattle are dear, likewise the hides. Therefore a shoe factory would not pay.
The railroads of the Central Valley are owned by the state and do not pay on account of it. The personnel is large and is made up entirely of political henchmen of the senators and congressmen. The government realizes this and there has been talk of renting the lines or selling them to private companies. This would be good sense. This Central Valley is crossed lengthwise by one main trunk-line touching at the important towns. From these at right angles run branch lines to places of minor importance. Yet so thickly settled is this valley, and so productive is it, that another parallel line from Santiago to Concepcion, touching points not on the government railway, could possibly be made to pay a profit. From Talca it could run southwestward through San Javier, and Cauquenes crossing the coast range between Quirihue and Coelemu at no perceptibly steep grade, opening up a new country, and saving a distance of seventy-five miles between the terminals. The country is mostly level and there would be no difficult engineering feats. The railroad from Santiago to Valparaiso is a roundabout one and crosses the steep mountain pass of Tiltil. For years it has been talked of to shorten this line making it go through Casa Blanca, but the government has had no money for expenditures of such a sort. I have no doubt but that it would give a private company a concession if it meant business. An interurban electric line between these two large cities might pay. It would be eighty-five miles long and would also open up a new country.
Chile is in need of many first-class modern hotels built on the North American style, but not cramped for room like in the United States, and with the guests' rooms large enough for comfort. Santiago, Valparaiso, and Concepcion have good hotels, but in the other cities they are poor. It would not pay a North American to build a hotel south of Concepcion because in that region German influence predominates, and in many places the German population outnumbers that of the native. For years to come after the war the North American would be boycotted there. Antofagasta opens an excellent field in the hotel line. There are four hotels there where it is possible to sleep and eat, but they fall much below the standard for such a busy port. The trade is evenly divided between them, but an up-to-date hostelry could easily shift that to themselves. Arica is badly off in the hotel line. This is the port of La Paz, Bolivia, and traveling men to and from that city are often obliged to put in a few days in this most northern seaport of Chile while waiting for their steamer. Coquimbo, Talca, and Chillán need modern hotels, as well as Los Andes. The latter town which has a population of 8097 is important because it is the jumping-off place for Argentina. The narrow-gauge railroad from there to Mendoza is of such a nature that the trip has to be made in daylight on account of curves, bridges, and steep gradients which would be dangerous to traverse at night. Passengers en route for Argentina leave Santiago and Valparaiso in the evening arriving at Los Andes at night where they stop over, and continue the next morning. The train coming from Argentina arrives at Los Andes at night and as it is sometimes late, passengers prefer to stop over there, continuing to Santiago in the morning, rather than to change trains and arrive at Santiago at an unseemly hour. The only hotel fit to stop at in Los Andes is the poor one owned by the Transandine Railway, and it is nearly always overcrowded. It is a flimsy frame structure, dirty, and with poor service. It is some distance from the main part of the city, but another hotel built in its neighborhood would catch all the transient trade, because most of it focuses there instead of in the town. Rancagua has a floating population comprised of the mining element from the Braden Copper Company. Many of these are North Americans and Canadians, and every day some of them are obliged to stop overnight at Rancagua to get a train out the following day. Also Rancagua is the station for the Baths of Cauquenes to which there is constant journeying to and fro during the summer season. The city has a population of 10,380 irrespective of transient trade with no hotel fit to stop at.
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Transcriber's note:
Inconsistent hyphenation and spelling in the original document have been preserved.
Obvious typographical errors have been corrected.
On page 407, "cue" should possibly be "clue."