PART IV.

ARGENTINE FINANCE.

I. THE ARGENTINE BUDGET 295

The financial situation——Continual increase of national expenditure——Great and rapid progress since 1891—— Insufficiency of the means adopted to moderate this increase—— The Budget Extraordinary and the Special Legislation Budget.

Causes of this increase of national expenditure——The increase of administrative requirements caused by an increasing population; this is the most natural cause, and that most easily justified——Increase of the public debt——The intervention of the State as the promoter or guarantor of important public undertakings——Exaggerated military expenses.

The total sum of national, provincial, and municipal expenses. The proportion per inhabitant——Comparison with other foreign countries in the matter of administrative expenses.

The national revenue——The revenue as organised by the Constitution, and its analysis——Indirect taxation——The customs the chief source of revenue——Direct taxation; its origin in the Argentine; its justification; its yield—— Revenue of the industrial undertakings belonging to the State: railways, sewers, posts and telegraphs——The exploitation of the State lands.

Elasticity of the receipts, which follow the development and progress of the country——The accelerated increase of expenditure, and the resulting chronic deficit——Necessity of serious reforms.

II. THE PUBLIC DEBT 312

Statistics of the public debt on the 1st January 1909——History of the public debt——The first loans.

The financial crisis——Consolidated loans——The Romero arrangement—— Loan for the redemption of guarantees——The internal public debt——The total of the Argentine public debt, and its annual cost in dividends and redemption——The proportion of financial charges as compared to other budgetary expenses.

The burden of the public debt is heavy, but not unduly heavy in relation to the productive power of the country——The necessity of restraining further issues and of converting old debts——The efforts of the Argentine to improve her credit.

III. THE DOUBLE CURRENCY 330

The persistence of the double currency——The history of paper money——The origins of the premium on gold, and its almost continual increase——The year 1890 and the depreciation of the currency——The causes of this depreciation; abuses in the issue of paper, caused by a bad financial and administrative policy.

Remedies suggested——Rosa’s law fixing the value of paper money and establishing a _Caisse de Conversion_——Opposition to this law——Its beneficent effect upon agriculture and stock-raising, which had especial need of a stable medium of exchange——Reserve fund created with a view to converting paper money; its vicissitudes in the past and its present constitution——The present monetary situation.

IV. THE _CAISSE DE CONVERSION_ 342

The principles on which the establishment of this institution is based——The necessity of a rapid redemption of fiduciary money——The doubtful success of this programme——New issues of notes——New attributes of the _Caisse_ dating from 1899——The exchange of paper for gold and _vice versa_——The development of this system of exchange——The authority attaching to the _Caisse_.

V. THE BALANCE-SHEET OF THE ARGENTINE ACCORDING TO THE INVENTORY OF SECURITIES 349

THE INVENTORY OF MOVABLE PROPERTY OR SECURITIES——The capital represented by movable properties, stocks, bonds, shares, etc., is the only kind of capital which lends itself to statistics——The great groups of movable properties: National Funds, Railway Shares, Insurance Companies, Foreign Banks, Mortgage Companies, and agricultural and industrial undertakings.

The nominal amount of capital represented by movable values—— Table of the annual revenues of the same, and the sinking fund——Division of this revenue among the different countries having capital invested in the Argentine.

English capital——The importance of English investments in all branches of Argentine activity——The benefits of a reaction in favour of Argentine capital——French capital; its small value compared to English capital——German capital and its rapid increase——Approximate valuation of that portion of revenue remaining in the Argentine, and of that which goes to the various nations having capital invested in the country.

THE BALANCE-SHEET——The assets are principally composed of exportation values; the liabilities, by the value of imports—— The revenue of investments exported to foreign countries, and the total of the sums expended by the Argentines abroad—— Table giving a summarised Balance-sheet and the balance in favour of the Argentine——International exchanges and the importation of gold confirm this favourable situation—— Argentine capital will presently play a more important part in the country as compared with foreign capital.

CONCLUSIONS 370

INDEX 373

AUTHOR’S NOTE

At the outset of this work our thanks are due to Señor J. Romero, ex-Minister of Finance, who has given us the benefit of his experience for this study of current Argentine affairs. Señor Romero is the author of the monetary law of 1881, and was responsible for the arrangement of the foreign Debt of 1892; he is to be numbered among those Ministers who have rendered, in the course of their financial administration, the greatest services to their country.

We must also pay tribute to the memory of two eminent gentlemen, no longer living, whose death the Argentine deplores; who had desired, by aiding us with their advice, to be in some sort collaborators in this work, destined as it is to make popularly known to European readers the present prosperity of the Argentine Republic.

We must express our utmost gratitude first of all to Signor Pellegrini, that eminent man who assumed the Presidency of the Republic in a difficult moment of her history. We are greatly honoured in that we are able to associate his name with this book, by publishing, as an Introduction, a most interesting study of the formation of the Argentine Republic, which was one of the last writings of this eminent citizen.

And we must not forget the friendly and conscientious assistance rendered us so willingly by one of the most notable figures in the financial world of the Republic: M. Ernest Tornquist, whose death was also most truly a national bereavement. M. Tornquist exercised a considerable influence over the trend of affairs, and he most notably contributed to the work of economic expansion, and financial and monetary reorganisation, of which the Argentine is to-day feeling the beneficial effects. We have profited, in writing this book, by his incontestable competence, and respectfully salute the memory of this willing friend and collaborator.

AUTHOR’S PREFACE TO THE THIRD EDITION

Three years have elapsed since the appearance of the first edition of this book, and we have to-day the satisfaction of being able to state that the development of the country has fully responded to our optimistic forecast. Short as such a period is in the life of a people, it has been extraordinarily full; the ground covered is so considerable that it is of a larger Argentine that we now have to revise the picture, while recording its pacific victories in the economic field.

No country in the world has ever in so short a time realised so rapid a progress, in respect of the produce of the soil. In 1904-1905 the area under culture was as yet no more than 22-1/2 millions of acres, while to-day, in the agricultural year of 1908-9, it attains the figure of 35 millions of acres, representing an increase of nearly 75 per cent. In the same period the value of cereals, which was about £1,600,000 in 1904-5, has also increased in very large proportion.

Taking as basis the figures furnished by the Division of Rural Economy and Statistics of the Ministry of Agriculture, we may estimate that the harvest of 1908-9 will give a yield of, 13,811,000 (metric) tons,[1] which may be divided as follows: Wheat 5,760,000 tons, flax 1,228,000, oats 823,000, and maize 6,000,000 tons. The value of the harvest, according to the prices ruling in 1908, will amount to 1045 millions of paper piastres, or £92,000,000.

[Footnote 1: Reducing the above quantities to bushels of 56 lbs. weight, the cereal harvest is estimated at: wheat, 230,000,000 bushels; oats, 33,000,000; maize, 240,000,000. The metric ton is 34·5 lbs. lighter than the English.]

To appreciate these figures at their true value, one must remember that twenty-five years ago the Argentine was still importing foreign flour to make her bread, while to-day the production of grain represents nearly a ton per head per inhabitant.

It is the same with maize: twenty years ago it was hardly grown, and to-day the harvest amounts to 6 millions of tons; furnished almost entirely by two provinces——those of Buenos Ayres and Santa Fé.

As for stock-raising, we cannot make a comparison with any very recent statistics——since the last available date back to 1895——but we may say that the general census which has just been undertaken, under the direction of Señor Alberto B. Martinez, has revealed a wealth whose magnitude surpasses all conception. To-day the Argentine counts 29,116,625 horned cattle, 67,211,754 sheep, 7,531,376 horses, 750,125 mules and asses, and 3,945,086 goats; which is equivalent, at the present time, to a capital of 1481 millions of paper piastres, or £130,000,000. By referring to the figures for 1895, which give us 21,701,526 horned cattle and 4,446,859 horses, we may judge of the immense progress which the Argentine has realised in a few years, thanks to the transformation of 3-3/4 millions of acres of soil into magnificent pastures of lucerne.

On the other hand we must, it is true, note a decrease of 7,167,808 head of sheep, which are gradually falling back before the advance of agriculture and the increasing numbers of cattle. This harmless animal contents itself with a poorer soil, and does not fear the intemperance of the seasons; also sheep-raising is now giving place, in our central provinces, to other more remunerative industries, and the sheep are taking refuge in great quantities in the southern regions.[2]

[Footnote 2: Patagonia, and even Tierra del Fuego, with its terrible winds and drenching rain, is now being occupied by the sheep-rancher, to the destruction of the guanaco and the natives; frost being rare save on the ranges, and the pasture luxurious.——[TRANS.]]

If we consider these facts with a view to noting the precise direction in which the Argentine is to-day evolving, we shall observe a marked tendency towards the extension of agriculture proper, and a check in the progress of stock-raising, which appears——at least for the moment——to be developing more slowly than of old.

This characteristic change is perceptible each year in the statistics of foreign trade. The exportation of agricultural products amounted, for the year 1907, to the value of 164 millions of piastres (gold), or £32,800,000 as against £32,400,000 and £34,000,000 for the two preceding years. As for the products of stock-raising, the value in 1907 amounted only to £24,800,000, while in the two preceding years it was £24,800,000 and £28,200,000; and ten years ago it exceeded by more than £10,000,000 the value of the agricultural exports.

Many causes are contributing to this transformation of a pastoral into an agricultural country; their action is progressive, and they are profoundly modifying the aspect of the land, by gradually substituting, for the monotonous horizons of the ranchero’s prairies, the variety of cultured fields.

While the prices of cereals have always attained a remunerative figure, those of the bestial, on the contrary, have now and then suffered sensible depression; and, what is still more serious, the ranching industries have also suffered, as they did in 1908, by a lack of demand for hides and wool, and simultaneously for an insufficient outlet for meats.

The dried-meat (saladeros) industry, which used to absorb annually nearly two million beasts, has by now been almost entirely removed in the direction of Uruguay, or the Brazilian province of Rio Grande do Sul, and is little more than a memory; as this primitive and rudimentary method of preparation had perforce to give way before the more hygienic and progressive chilled and frozen meat trade. The chilled beef industry, however, upon which such hopes were founded, has not of late years made any conquest of new markets, England being almost the Republic’s only customer.

As for the exportation of cattle on the hoof, it is greatly impeded in Europe by prohibitive measures, which diplomacy, by means of commercial treaties, is endeavouring to remove. Yet were the desired advantages obtained, the result would be doubtful on account of the considerable rise in the price of cattle and the high freights which are charged for the transport of living stock. It therefore results that this particular species of exploitation is at an obvious disadvantage in the face of the refrigerating trade.

If the raising of stock and its dependent industries have not, in these last few years, realised a progress comparable to that of agriculture, we must by no means conclude that this department of production has ceased to be an element of national prosperity. Quite on the contrary: thanks to the efforts made to better affairs by happy selections in the breed of animals, the value of live stock has increased in surprising proportions, and the Argentine still retains its rank as second to the United States as a stock-raising country.

What we have endeavoured to emphasise, as a new manifestation of the national activity during the last few years, is that the development of the country has been in especial along agricultural lines; an incontestable proof of progress, and an index of a higher degree of civilisation.

Agriculture, as compared to stock-raising, is, from the economical point of view, a source of wealth having quite a different bearing upon the general prosperity and welfare of a nation. It is the fairy which little by little transforms the vast plains of the Argentine pampas into a more animated landscape, peopled by numerous homesteads, foci of colonisation, which then develop into villages, which in a score of years may perhaps be important cities. Agriculture summons the railroad, stimulates emigration, promotes the division of the soil, creates the small proprietor; it influences even the manners and morals of the inhabitants, for it demands more labour, more intelligence than ranching; nimbler wits, more method, greater foresight.

The comparison between the two great industries of the Argentine is summed up in the following fact: a property comprising 25,000 acres of pasture can be put into working order and managed by a staff of ten to twelve men. For an estate of 1500 acres under culture, one may estimate that forty to fifty persons, grouped in families, may easily live upon the soil and prosper. We may perceive by this the great superiority of agriculture from the point of view of the general interest of the country. It demands and supports a denser population; it permits the grouping of this population in villages and cities, it creates, in proportion, with a smaller capital, a great wealth of produce; in short, it contributes on the one hand towards increasing the wealth of the country by participating largely in its exports, and on the other it increases its power of consumption, by absorbing a greater number of imported products.

Thus the evolution of the Argentine towards agriculture constitutes a real progress, and if the country continues to follow the same path, its development will assuredly not be arrested by lack of soil. The 35 to 37 millions of acres already reclaimed, and at present under culture, represent at the most a tenth of the total area of cultivable land, which is estimated roughly at 375 millions of acres, of which at least 125 millions are perfectly adapted to the culture of cereals. The four Provinces of Buenos Ayres, Santa Fé, Córdoba, Entre Rios, and the Territory of Pampa Central alone contain some 32-1/2 millions of land under the plough, while there remains about 170 millions of acres of land which is just as fertile, and which without manuring or preparation would yield a splendid crop from the first year of tilth.

This transformation into an agricultural country has already borne fruit. The figures relating to external commerce, compared with the world’s statistics of cereal production, show the present position of the Argentine among the great exporting nations.

It is the Argentine which to-day, after the United States, occupies the second rank in the matter of cereal exports; and this is a significant event in the economic history of the nations, to which the attention of Europe should be directed. At the present moment the Argentine, with her 4 million tons of corn available for exportation, is not as yet mistress of the grain markets, but she represents, to those countries whose production is insufficient, a notable reserve, which has become indispensable since the United States, Canada, and Russia seem to have reached their limit of exportation.

The year 1907-8 was for the Argentine, thanks to the results of a good harvest, a period of exceptional prosperity. The average yield of wheat was 18·7 cwt. per hectare——14 bushels per acre——and in the Province of Buenos Ayres it amounted to over a ton per hectare——or 15 bushels per acre——although the average was only 11 per acre in 1906-1907, and 13 in 1905-1906.

As for the prices, they ruled higher than any the country had so far known, even during its most prosperous periods. Wheat had been selling at 6 or 7 piastres the 100 kilos——that is, approximately, at 3s. to 3s. 6d. per bushel——and at that price agriculture still yielded a fair profit. In 1908, as a result of the bad harvests in several European countries, the sales rose to 6s.; at which price the profits on the cost of production amounted to 25% or 30%.

After this cursory glance at the present situation in the Argentine, we must also express our views of the future. Optimism is certainly permissible in the case of a country which has advanced so far in so short a time, and where prosperity is founded on a diversity of products which can never be affected by a universal crisis.

However, one well might wonder whether the Argentine might not, in the Biblical phrase, know lean years following the fat; whether she is not destined to suffer the onset of plagues, such as drought and the locust, which latter is to her, as to Egypt in the time of the Israelites, a veritable scourge. Certainly here we have one of the great risks to which the country is exposed: a country wherein all depends upon the harvest, the earth being the principal source of wealth, and the mother of all industry. Yet this danger, so real a few years ago, is greatly lessened to-day by the fact of the distribution of cultivated lands and pastures over a far greater area. A bad harvest could not compromise both agriculture and stock-raising over a stretch of more than 15° of latitude.

Yet the country is subject to a very real danger, but one of another kind. From the very exuberance of development may arise a crisis of growth; for her prosperity depends not only on plentiful harvests; it may be influenced by other factors on which it is far more difficult to pronounce.

The country must continue to require considerable sums of capital for her agricultural necessities, for her stock-raising, for commerce, and for industries; and it may be asked whether the European markets, from which, in great measure, her capital derives, can continue to afford her an ever-increasing amount of assistance which will keep pace with her development in all directions.

The Argentine is not so far self-sufficing. The soil is, to be sure, a source of immense national wealth, but this wealth is not in the form of a reserve to be drawn on; it is, as a rule, converted into real estate directly it is produced; unless, indeed, it goes abroad. For a farmer who makes a profit, say, of £8000 or £10,000, will immediately employ his capital to acquire another holding or to start a different kind of culture, instead of clearing off the debts which already burden his property. He is contented with his position as a borrower; for if money, even on mortgage, costs him 8 to 9 per cent., he can, on the other hand, obtain a far higher interest by sinking it in the purchase of land.

From all this it results that in the Argentine rural and even urban property is largely hypothecated. It must be understood that this capital is well guaranteed, as its security rests not upon pure speculations but on the yield of the property, which is far in excess of the charges; however, since the general tendency is not towards redemption, one may wonder if, sooner or later, there may not be a lack of equilibrium between the impulse given to the country and its financial needs. The crisis which arose in the wool market in 1908, the drop in the prices of quebracho timber, and the restricted outlet for cattle on the hoof, and even for refrigerated meat,——all these partial misfortunes are salutary warnings, and we must not lose sight of them, nor allow ourselves to be hypnotised by the high prices of wheat, maize, or flax, or the heavy yield of the lucerne pastures.

For our part, in considering the future of the Republic no less than its present interests, we hope to see it enter upon a period of consolidation, rather than continue indefinitely the discussion of further progress. Before entering upon another stage of development the country must, for a while, mark time, in order to gain leisure to assume its own liabilities, rather than continue incessantly to absorb new capital.

But there is still a cloud in the serene skies of the Republic; a cloud that might be the precursor of a truly national catastrophe, if the measures necessary to avert it were not taken in time. The peril arises neither from the economic situation, which is excellent, denoting an ever-increasing vitality, nor the relations of the Republic with the neighbouring nations, which are conceived in a spirit of peace and concord. Although a short-sighted diplomacy has attempted to envelop the relations between the Argentine and Brazil in an atmosphere of jealous distrust, there is no fundamental cause which might trouble the friendly relations of these two countries, which formerly fought side by side on the field of battle for the redemption of a sister nation. They have no conflicting economic interests which might divide them, and are destined to afford a great example of progress and of civilisation to the other States of South America.

The peril to which we refer is of a totally different character: it is caused exclusively by the exaggerated expenditure of the public administrations, and the dangerous paths of armed peace upon which the country has entered; thus implanting, in young and free America, a ruinous system, which is ruining the nations of the Old World, burdens them with insufferable taxes, and diverts from production and labour too large a proportion of citizens. In order to face imaginary dangers, Congress and the Government have lately decreed that a sum of £40,000,000 shall be expended upon armaments.

As for home politics, they form a domain which we do not desire to enter, and on which the world of affairs bestows little enough attention, so long as they do not compromise the public peace. The Argentine, in fact, is still under a system of personal power; the Presidency of the Republic is the focus about which all the political life of the country gravitates. In default of a people as conscious of its rights as of its duties, and possessed of the virtues necessary to a course of perseverance in democratic practices, it is the Government that manages the elections; and it is difficult to say whether it does so because there is no public opinion, or whether there is no public opinion because the Governments usurp the functions of the electorate. From this point of view there has been no change in the political _morale_ of the country; the only progress to be noted is that the parties resort less often than they used to violence as a solution of their quarrels.

As for the administrative expenses, they are increasing with a rapidity only equalled by the growth of the fiscal resources of this fortunate country. Proposals for public works accumulate in the various Ministries, while waiting for the funds necessary for their execution; their total amounts to-day to the respectable figure of nearly £40,000,000.

To sum up: from our re-examination of the Argentine situation for 1909, we obtain an impression of great progress and of actual prosperity, an impression confirmed by the statistics of foreign trade, in which the entire activity of the country is reflected. For the year 1907 the total of imports and exports amounted to £116,000,000; for 1908 the total receipts and outgoings represented £133,000,000: with a commercial balance of nearly £24,000,000 in favour of exports.

Among the other manifestations of national progress we have still to take into account the development of the network of railroads, of which 13,660 miles are in actual working, representing a capital of £158,000,000, while 3259 miles are projected or in process of construction, representing a capital of more than £25,000,000. These new lines have been conceded by Congress either to companies already existing, or to new companies which are able to offer all desirable guarantees, so as to assure the prompt realisation of the schemes accepted. The Government, on its own part, has solicited and obtained from Congress the necessary sanction for the execution of a vast plan for the colonisation of the Southern Territories, which is based on the construction of numerous railroads. This continuous extension of the railway system has greatly favoured the valorisation of the new Territories, and has contributed powerfully to the movement of colonisation and emigration which is the indispensable condition of a wider future.

To-day, then, all is for the best in the best, or at least the richest, country in the world. But if science teaches us that Nature takes no leaps——_natura non facit saltus_——history also teaches us that nations in their progress must not progress too rapidly. For this reason the Argentine Republic, in especial, has need to-day to consolidate her prosperity under a _régime_ of foreign and domestic peace, of prudence and economy, and to avoid speculation and the abuse of credit, which have ended, before now, in inevitable reaction.

PREFACE TO THE FIRST EDITION

Twenty years ago M. F. Latzina, Director of Statistics, published in French a very able work on the _Geographie de la République Argentine_, of which he had issued the first edition in Spanish, and I consented with pleasure to write an Introduction to a book whose object——an object which it fulfilled——was to familiarise European readers with a country whose rapid development is one of the most remarkable facts in the economic history of the nineteenth century.

“These results,” I wrote, after having quoted certain statistics of agriculture and commerce, “are assuredly very satisfactory. The Argentines have the right to be proud of them; few countries in the world could show a like example of progress!”

I have no less pleasure in associating myself to-day with this book, by Señor Albert B. Martinez (sometime Under-Secretary of State, and at present Director-General of the Statistical Department of the city of Buenos Ayres), and M. Maurice Lewandowski, Sub-Director of the Comptoir National d’Escompte of Paris. Their competence is incontestable, and their work requires no recommendation, since it has won the sanction of success, being now in its third French edition, and having been “crowned” by the French Academy. But the object which is aimed at by _The Argentine in the Nineteenth Century_ is the same as that of the _Geographie de la République Argentine_, and the interest attaching to the book is the same.

“In the competition of the new nations, created by emigration from Europe,” I said in 1890, “this Republic will be enjoying a privileged situation, because of its particular advantages: the nature of its climate——a climate of the temperate zone; the vast extent of its territory; the quality of its soil; the facility with which railways can be built; its situation on the Atlantic coast, facing Europe, and relatively near the Indian Ocean; the powerful tide of emigration setting in towards it, and the rapid peopling of the country, together with the wealth that results therefrom; the suitable character of its population, and the liberal spirit of its political institutions....

“The Argentine Republic, which occupies in the temperate zone of South America a position analogous to that held by the United States in the corresponding portion of North America, may well dream, if not of equal power, at least of a similar future.”

This dream is in process of realisation: of this the proof will be found in the chain of evidence which our authors put forward.

It is the present condition of affairs and, above all, the economic situation, which the authors of _The Argentine in the Twentieth Century_ have set out to represent. They have not given us a panegyric——“_nihil admirari_,” say they——but a practical book: one written by men of business and affairs, founded upon direct observation, and hard-and-fast figures, where statistics have provided them.

* * * * *

The Argentine is a young nation, which hitherto has busied itself rather in work and production for the amelioration of its present condition, and in the preparation of its morrow by creating capital, than in giving itself to the historical study of its past. Nevertheless, history is the web from which the spirit of a nation is woven. It is useful to recall the principal historical periods, and particularly the origins of the nation, for the better understanding of the present period.

It was in 1508 that the Spaniard, Juan Diaz de Solis, discovered the estuary of the Plata, the _Mar dulce_; and in 1516 he returned, thinking, after the discovery of the South Sea, by Nuñez de Balboa in 1513, that this might be the strait, so sought by the navigators of the time, by which that sea might be reached, but on landing he was killed by the arrows of the Charrua Indians. He had discovered no strait, but a spot assuredly well suited for colonial settlement. The first attempts were abortive: that of Sebastian Cabot, who built the fort of the Sancti-Spiritu (1527), and that of Diego Garcia. It was then that the discovery of some ornaments of silver, worn by the people of the country, gave the river its name; known first as the Rio de Solis, it was now called the Rio de la Plata. The Indians destroyed the fort and killed the colonists.

Eight years later a wealthy private gentleman, an officer of Charles V., Don Pedro de Mendoza, undertook to establish a settlement at his own cost, on the condition of being appointed governor of all territories that might be found as far as 200 leagues from the ocean; and in 1535 he sailed with fourteen vessels and two thousand men. He laid the first foundations of the colony of Buenos Ayres, and he rebuilt the fort of the Sancti-Spiritu, while his lieutenant, Ayolas, in 1536, founded the station of Asuncion, on the Rio Paraguay. The post of Buenos Ayres was abandoned. After the death of Mendoza and Ayolas the new colony was governed by Martinez de Irala for a space of nearly twenty years; reinforced by fresh emigrants, it barely held its own against the losses inflicted upon it by the Indians. Irala, by a voyage of three years’ duration, succeeded in putting himself in touch with the Spaniards of Peru.

Conquerors coming from Chili across the Andes, the Spaniards founded among others, despite the hostility of the Indians, the following stations: Santiago del Estero (1552), Mendoza (1560), Tucuman (1565), Cordoba (1573), Salta (1582), and Jujuy (1592). These at first were little more than camps entrenched. But Santiago del Estero was erected into a bishopric, and so remained until 1700, in which year the episcopal throne was transferred to Córdoba. In the eastern regions, in 1573, Governor Juan de Garay built Santa Fé, re-occupied Buenos Ayres, which was christened, on the 11th of June 1580, Cuidad de la Trinidad y Puerto de Santa Maria de Buenos Ayres (the City of the Trinity and the Haven of Holy Mary of the Fair Winds), and founded Corrientès in 1588.

Trade commenced. A first consignment of hides and sugar was dispatched to Spain in 1551; but the merchants of Seville protested, and as a result their privileges won the day. It is a fact that the monstrous regulations which Spain had imposed upon her colonies forced the Argentines, for some considerable time to carry their exports across the continent to Callao, whence they were carried by sea to Panama; there they were again transported by land across the isthmus, and were shipped anew at Puerto Bello for Seville. Imports came by the same road.

There were, however, exceptions to this rule: either by grace of provisional permits given by the King of Spain, or, more frequently, through the contraband trade.

In 1617 the Province of Paraguay and the shores of the Plata were divided into three Provinces; Paraguay, Buenos Ayres (erected into a bishopric in 1630), and Tucuman, which were dependents of the viceroyalty of Peru. The captaincy of Chili also extended over both sides of the Andes. The Indians had to a great extent been divided among the colonists _en encomiendas_——that is to say, in a species of slavery; but other Indians, who were still free, were formidable enemies.

Early in the seventeenth century the Jesuits instituted their first “reductions” in Paraguay, and organised in a community the Guarano Indians of the country. These “reductions,” ravaged by the Mamelukes of Brazil, were replaced by missions established on either bank of the Paraguay River, and on the Uruguay to the south of Yguassu. The order of Jesuits was suppressed in 1766.

The principal towns of the Argentine of to-day were already established by the middle of the eighteenth century. At that period, so Savary informs us, “The city of Buenos Ayres contained about 4000 houses, all built of earth (adobe), but covered with tiles, with the exception of some fifty houses of brick. The inhabitants are rich, and owe their riches to the extensive trade which they carry on, both at home and abroad.” After the advent to the Spanish throne of the son-in-law of Louis XIV., France had the greater share of this trade; the King having conceded to a French company the monopoly of the Assiente——that is to say, of the trade in negroes, until by the Treaty of Utrecht France was forced to cede this monopoly to England.

The two principal articles of export were at that time green hides for Europe and the Paraguayan _maté_ for Peru.

On the northern bank of the Plata the Portuguese had founded the Colonia del Sacramento (1686), with a view to competing with the Spanish ports. The Spaniards seized this place once in 1724 and again in 1766; they founded Montevideo in 1726. The quarrel between the two colonies was only terminated by the Treaty of Madrid in 1750.

In 1748 Spain somewhat abated the severity of her laws. In 1776 she freed the Argentine from the overlordship of Peru, by creating the viceroyalty of La Plata, with Buenos Ayres as capital. The population, which before this change was only 37,000, rose to over 400,000 in a quarter of a century. In 1780 was founded the colony of Carmen, the first Patagonian settlement, the shores of Patagonia having been first explored by the Jesuit Quiroga in 1746.

During the wars of the Empire the English seized Buenos Ayres by surprise, but were expelled by a Frenchman, Jacques de Liniers, whom the inhabitants had appointed viceroy.

The _colonial period_ ended in 1810.

Such were the origins of the Argentine; a time of difficulties and impediments; but in that period were laid the foundations on which the Argentine civilisation reposes.

The second period is that of the _formation of the Republican State_.

The first part of this period, that of the deliverance from Spain, opens with the memorable day of the 25th of May 1810, when liberty was peacefully proclaimed at Buenos Ayres. The revolution spread to Córdoba and to Tucuman; it failed in Upper Peru, owing to the reverse of Goyenèche in 1811, and in Paraguay, where the capitulation of Tacuary took place in the same year. Belgrano, one of the heroes of the War of Independence, renewed the offensive and once more invaded Upper Peru——this time victoriously; but the Argentine troops were definitely driven from the country after the battles of Vilcuapujio (1813), and Sipé-Sipe (1816). On the east coast the capitulation of Montevideo in 1814 put an end to the Spanish domination. On the west the brilliant expedition of General San Martin, who crossed the Andes, freed Chili, and struck the decisive blow by the capture of Lima (1817-1821). The victory of General Sucre at Ayacucho (1824) terminated the struggle. Argentine territory had already been seven years free from the Spanish troops.

The second part of this period, that of political construction, was longer, far more laborious, and still more bloody. Questions of race and party divided the inhabitants. Guachos of the Pampa, Creoles[3] and pure Spaniards, Federals and Unitarians, disputed the power, while on the frontiers of the Republic the Indians continued to disturb and alarm the new State. Provinces seceded; many constitutions were drafted. In spite of his talent as a statesman, Rivadavia was unable to obtain the universal acceptance of the Unionist Constitution of 24th December 1826.

[Footnote 3: This word is here used to denote mixed blood; in its proper use it denotes a person of Latin blood born in tropical or semi-tropical America.——[TRANS.]]

A war against Brazil, of which the notable fact was the victory of Ituzaingo (1827), resulted in the recognition of Uruguay as a free state.

The civil war broke out anew several times. The military leader of the Buenos Ayres Federals, General Rosas, seized upon the dictatorship in a time of disorder, exercising it not without intelligence, but with a cruel despotism, and he carried on a long war against Montevideo, which lasted until General Urquiza, of the Union party (with Brazil and Uruguay as allies) delivered his country by the victory of Caseros (1852). The Constitution of the Argentine Republic was voted on 25th May 1853; but the end of the civil war and the definite reunion of Buenos Ayres to the other Provinces did not take place until 1860, the year of the revision of the Constitution.

War and confusion are not usually propitious to progress. However, the population in 1861 was estimated approximately at 1,375,000; it had increased to almost five times what it was at the beginning of the century.

Buenos Ayres became definitely the capital of the Republic in 1882, upon ceasing to be the capital of the State of Buenos Ayres.

The third period is that of _economic development_. This is the period of which our authors write. We may mention it as beginning with the re-entrance of Buenos Ayres into the Argentine Concert, and the revision of the Constitution of October 1860. If it has not been free from political agitations and international misunderstandings, it has none the less been more pacific than the preceding periods, and industry has enjoyed a security which in former years was only too often disturbed by the regulations of colonial trade, the attacks of the Indians, the civil wars, and the Separatist policy. But there were still for twelve years intestine troubles and dissensions.

It was only in 1882 that the political organisation was completely constituted, when Buenos Ayres became the Federal capital; for from 1865 to 1870 the Argentine was forced to wage war against Paraguay, when it struggled, in concert with Brazil, against the despotism of Lopez. The Treaty of the 3rd of February 1876 gave it the greater Chaco as far as Pilcomayo. The Chaco is pacified; matters are not the same now as when, in 1881, Crevaux was assassinated there by the Tobas. General Riva effected the Argentine conquest of Patagonia (1879-1880), and the Indians, feared so long by the planters, were driven across the Andes.

In 1895 the difference which had arisen between the Argentine and Brazil, with reference to the Misionès frontier, was settled by arbitration. By the Treaty of 23rd July 1881 was terminated a long quarrel with Chili in relation to Patagonia; the Argentine obtained possession of the country as far as the line made by the Cordilleras and a portion of Tierra del Fuego. Arbitration also, in November 1902, settled the difference with Chili, no less irritating and of equally long standing, concerning, the frontiers of the Andes. No more serious causes of quarrel between the Argentine and its neighbours remain.

* * * * *

The period of _economic development_ is as yet of only fifty years’ duration: it is far from having reached the limit of its evolution; but we may judge of the amplitude which that evolution has already attained by means of statistics,[4] and by them we may foretell what the future holds in promise.

[Footnote 4: The more recent figures cited in this Preface are taken, for the most part, from _The Statesman’s Year-Book_.]

The population, estimated in 1861 as being 1,375,000, had by 1907 increased to 6,210,000. Immigration, varying from one period to another according to the economic condition of the European nations and the Argentine Republic, reached an annual average of 13,400 from 1860 to 1869: between 1903 and 1908 it amounted to 211,000 (emigration not being deducted.)[5]

[Footnote 5: This emigration amounted to an animal average of 93,000 between 1903-1907; but the deduction was not made in the years 1860-1869. In 1907 there were 209,000 immigrants and 90,000 emigrants.]

The area cultivated in 1895, the date of the first serious estimate, was 5,256,160 acres, of which 2,013,000 acres were under wheat;[6] in 1909 34·6 million acres were cultivated, of which 14·8 millions were in wheat. These 34·6 millions are only a small fraction of the 256 million acres which the Argentine appears to contain.

[Footnote 6: The cultivated area was estimated at 849,000 acres in 1872.]

The grain harvest, estimated in 1878-1881 at barely 400,000 tons, exceeded a million tons in 1895, and in 1907-1908 amounted to 5,523,900 tons, or 204,384,000 bushels.

Although the bovine and ovine races have not greatly increased in numbers for the last twenty years, on account of the transformations effected by agriculture,[7] the exportation of wool, which was 660,000 quintals in 1869-1870, was nearly 2,000,000 in 1905, and it still amounted to 1-1/2 millions in 1907; the exportation of beef, reckoned in carcasses, was more than 60,000 head in 1900 and 463,000 in 1907.

[Footnote 7: In 1875 an approximate estimate gave 13-1/2 millions of horned cattle and 57-1/2 millions of sheep; in 1907 the figures amounted to 25,844,000 and 77,580,000.]

The first section of railroad was constructed in 1857. In 1865 the Republic possessed only 154 miles of railroad; in 1908 there were 14,643 miles.

In 1865, the first year of which we have commercial statistics, the foreign trade amounted to £11,300,000; in 1907, it reached £113,000,000, and in 1908 £127,600,000. For several years there has been a very large excess of exports over imports; in 1908 it would seem to have exceeded £20,000,000.

These figures, to which our authors have added many others, are eloquent. They tell us that man, whose labour creates wealth, is four and a half times more numerous upon Argentine soil than he was forty-six years ago; that immigration each year increases the number of workers; that cultivated soil, the chief instrument of wealth in an agricultural country, has an area nearly seven times greater than that of fourteen years ago; that wheat, the principal vegetable product of that soil, now yields harvests thirteen times more abundant than those of thirty years ago; that the products of stock-raising have, on the whole, greatly increased, despite the arrested development of certain forms of production; that the railways——the means of transport of man and his produce, which did not exist half a century since——now cover the land with a network of increasing fineness, and are placing the Argentine in the first rank of the nations in respect of the mileage of railroad per inhabitant; that foreign trade, which is one of the most characteristic forms of popular activity, and that commonly mentioned in illustrating a state’s power of expansion, has multiplied itself ten times since 1865.

These figures, taken together, form a picture which is not only encouraging, but extremely flattering to the pride of the Argentine people.

But the picture is not without shadows. The Indians to-day amount only to thirty thousand in numbers; the Guachos are gradually disappearing before the agricultural settler; and the political and moral unity of the country is not yet fully accomplished. The Argentine, like most of the Latin-American republics, has given itself a Constitution based upon that of the United States; but the populations of its Provinces had not the spiritual cohesion exhibited by the British Colonies, and above all by New England, which qualities set the seal on religious faith and the love of liberty. European immigration has brought us composite elements which are not yet amalgamated. Nearly all immigrants have come to make money: the majority are indifferent to public affairs, as we see on election days. Others are only too inclined to attach themselves to coteries, to cliques. In the relations between the local governments and the central Government, the subordination of the former is more remarkable than the harmony of their mutual relations. The planters, intoxicated by their good fortune, are not always so prudent as to regulate their undertakings by their resources.

When in 1890 I wrote an Introduction to M. Latzina’s book, the Argentine was in the full swing of speculation, and apparently saw no limits to its development. “The Argentines,” I said, “resemble an enterprising merchant, who, having opened shop in a well-frequented street, and having borrowed money in order to start with a luxurious establishment, finds himself greatly embarrassed for years, although his business prospers, because his advances and his engagements are larger than his takings. It is desirable that this spirit of enterprise should be fed, so to speak, on diet, or at least, according to regimen; and on such conditions equilibrium would be re-established.” Indeed, it then seemed that a crisis must occur; and it came, a few months later. It was very long and very severe; the Argentine learned what it meant to lose its credit, and for twelve years it suffered the disadvantages of a depreciated paper currency.

The country recovered, and speculation rapidly received fresh impetus. Thanks to the excess of exports, gold became plentiful; it is no longer at a premium; if interest——which has decreased——still maintains itself at about 6 per cent., it is because there is a great demand for capital. The budgets still increase at a pace to alarm a prudent financier, in spite of increased receipts. “If the Argentine does not wish to compromise its lofty destinies,” say the authors of the present volume, “it is essential that it should maintain an economical administration, careful of the public moneys, yet open to all material progress. By so doing, it will inspire confidence in men and in capital: the two elements which it must still increase in order to become a great nation.”

* * * * *

To the population born on Argentine soil were added, between 1857 and 1908, 3,338,000 immigrants of various nationality;[8] 1,706,000 Italians, 670,000 Spaniards, 201,000 French and Belgians, 100,000 Austro-Hungarians or Germans, and 41,000 English. Thus the Latin races are greatly in the ascendant: a fact which facilitates assimilation.

[Footnote 8: On the other hand, 1,322,000 persons emigrated. The census of 1895 gave 886,000 foreigners not naturalised, of whom 493,000 were Italians, 199,000 Spaniards, 94,000 French, etc. To-day immigration consists especially of Italians (127,578 in 1906), Spaniards (79,287), Russians (17,434), Syrians (7677), Austrians (4277), French (3698), etc.]

The Government should preoccupy itself largely with this matter of assimilation: for the process is not complete. There are two effectual means which it might employ, among others, in order to assimilate its new recruits: ownership of the soil and education.

These two means have produced marvellous effects in the United States. The Homestead Law of the 20th of May 1862 gave to every American over twenty-one years of age, and to every person having declared, conformably with the law, his intention of becoming a citizen, the right to occupy gratuitously 160 acres of surveyed lands, or 80 acres only in districts more advantageously situated: if the holder, after five years of residence, has cultivated a portion of his holding, the full title is finally granted. For such purpose the public lands have been surveyed and divided into lots by the Government. The Government also sells public lands by auction or treaty. Up to the month of July 1905, it had thus alienated a total of 808,000,000 acres; which explains how millions of families——Irish, German, Scandinavian and others——have been more or less definitely settled on the soil of that which was already or which has since then become their native land. Here is an example the Argentine Government would do well to follow.

Education exercises an influence of another kind, which is no less efficacious. The Americans of the United States are well aware of this, and this is why they attach such importance to the upkeep of the “common schools” and the attendance of the pupils. The children of foreign parents become Americanised in class and during play by contact with young Americans. The English tongue becomes their own language; their manners of thought and their habits are modelled on those of their comrades, whom they are unconsciously proud to imitate. If the immigrant family does not forget the memories of its old home, at least its offspring, from the second generation, are rooted in the American soil and have American minds.

The Argentine Government must endeavour to obtain a like result. For a long period primary instruction was in an extremely neglected state in the Argentine Republic. However, the Constitution obliged the Provinces to secure such instruction, the Federal Government to assist by finding a third of the expense of the first installation of the schools. But in spite of the Constitution, in 1874 there were only 1830 primary schools and 112,000 pupils. Progress has been accomplished: in 1905 there were 5250 schools, 14,118 teachers, male and female, and 544,000 pupils. But as the population between the ages of six and fourteen had increased to 827,000, only 65 per cent. of the children were attending school, and only one child in three was able to read and write. This is a state of things that must be changed.

Secondary education, as far as numbers go, is in no better case; there are sixteen “colleges,” with 4100 pupils. The State Universities of Buenos Ayres and Córdoba and the three provincial Universities of La Plata, Santa Fé and Parana, with 3000 students, are relatively better.[9]

[Footnote 9: The writer does not give the statistics of those who go abroad to study; the number is, of course, very considerable, especially of those who go to Paris.——[TRANS.]]

The three orders of instruction ought to work together to form a national spirit and a moral unity; but the Government should not forget that primary instruction is the basis, and that it is the only kind of instruction that can be bestowed upon each generation in its entirety, and that the children of each generation should be taught at an early age not only the ideas necessary to the life of the individual, but also, by means of the elements of national history, ethics, and applied science, the knowledge and love of their native country.

The Argentine Republic as yet counts few men to whom the exigencies of life leave leisure to consecrate themselves entirely to letters or the sciences. It has some distinguished writers, but they usually find a recompense for their talent in the public press; for in Buenos Ayres more than 200 journals are published. Men write as hurriedly as they act. It is to be hoped that before long, with the increase of wealth, there will arise men of science, who will find no lack of material in the country, and men of letters, historians, novelists, sociologists, etc., who will also never lack for matter in this busy, humming hive. Such men are necessary, because their life-work goes far to make up the intellectual capital of a nation, and even to form nationality itself.

* * * * *

In my introduction to M. Latzina’s book, I glanced at the whole continent of South America, and I remarked that civilisation had scarcely penetrated the interior of this vast continent; that the density of its population was extremely low; that the economic, intellectual and political life of the continent was concentrated, if I may so use the word, upon its periphery; that is to say, upon the shores which are in touch, through navigation, with the rest of the world; that the Argentine Republic formed the southern portion of this belt connecting Uruguay and Chili; that this belt is wider where the penetration of the interior is easier and the climate more favourable. This belt has also been widened in Southern Brazil by the construction of railroads. It is still wider in the Argentine, because the network of railways is more widely distributed, the soil is of even quality and cultivable, and the climate temperate and favourable to expansion.

For the purposes of this present Introduction, let us imagine a vaster area——the whole earth, or, at least, the three inhabited zones of the earth.

The torrid zone contains nearly a third of the land surface of the earth, and only a quarter of its population; the density of population is thus below the average. Original civilisations have existed in the torrid zone——for example, Mexico and Peru before the arrival of Europeans——but these existed on higher plateaus where the climate was not tropical. There were civilisations in India and the East Indies, but these were imported from the valley of the Ganges. There are to-day intertropical countries which exhibit an active economic life: India, Mexico, the Antilles and the seaboard of Brazil. Nevertheless, in the greater part of the torrid zone it would seem that the continuous high temperature saps human energy, and also renders it to a great extent unnecessary, by simplifying life, reducing as it does the number of man’s essential needs by facilitating the satisfaction of those which are, like alimentation, strictly necessary.

The temperate zone of the north is the most favoured of all these. It contains nearly half the land surface of the globe. It is also the most populated, and the average density of population is far higher, for it contains about 1,207,000,000 inhabitants, or roughly speaking, three-quarters of the population of the globe. Here it is that we find massed the four great sources of the ancient and modern civilisation of the world, which also correspond to the four great groups of mankind; China with Japan; India, with the Deccan running down to the torrid zone; Europe, and the United States and Eastern Canada. In the three first centres the density of population is far greater than in any other large country. In the fourth, the number of human beings (some 94 millions) and the density are far less; but this centre has become one of the most important, by means of its activity of production.

There remains the temperate zone of the south. In this zone, the ocean occupies relatively the largest space. The land emerges from it only at the termination of three continents——America, Africa, and Australia, terminated by Tasmania and New Zealand. Before the arrival of Europeans, each of these divisions was absolutely isolated, without any relations with the others, and inhabited by races entirely savage. The coming of the Europeans who peopled them, and the maritime commerce which ensued, have awakened them to civilisation. In the case of America, we have seen that free colonisation was not commenced until the nineteenth century. In Africa, at the opening of the nineteenth century, there were only a few ports occupied, and Australia was still practically untouched. To-day, in the temperate zone of the south, which comprises only a twelfth part of the land surface of the globe, there are 24 millions of inhabitants, nearly all civilised and of European descent. This population amounts to 1·5 per cent. of that of the globe; its density, therefore, is below the average.

It is, however, the zone in which the population has relatively increased most rapidly since the beginning of the nineteenth century, for at the outset it certainly did not count a million inhabitants. The Australian and African divisions have owed their good fortune to gold, and in a lesser degree to wool; but gold mines are a source of wealth which is exhausted by exploitation. In Australia, where the extent of arable lands is limited, immigration has at present practically ceased. In Africa the soil is little suited to culture, and immigration to the Transvaal has been recruited rather among Asiatic coolies than among free workers of European race.

In this southern temperate zone, the Argentine Republic is the State which has the most numerous population: that in which the population has known the greatest increase, and in which economic conditions promise the widest development in the near future. The perfecting of refrigerating processes will certainly facilitate the exportation of meats, and it is to be hoped that the interests of trade, under the necessities of the food supply of the labouring classes, will finally overcome the obstacles which the European producers oppose in the way of imports. The demand for wheat, like the demand for meat, may vary according to the year and the protective legislation of the nations; but in general we may say that it will increase rather than decrease, because the population of Europe, and especially of Central and Western Europe, is for ever increasing in numbers and in density, so that already it cannot suffice to itself by producing its alimentary needs from its own soil, and in proportion as it becomes wealthier it will consume more white bread and more butchers’ meat. The United States and Canada continue to export wheat; but the rapid increase of the urban and industrial population of the United States will assuredly limit this exportation to a very great extent in the twentieth century.[10]

[Footnote 10: The consumption of wheat in the United States averaged 200 million bushels between 1871 and 1875, and 531 million between 1903 and 1907. The exportation averaged 62 million bushels between 1871 and 1875, and 122 million between 1903 and 1907.]

The Argentine Republic, where the harvest is due in January, so that its wheat arrives in the European markets by March, is the country destined to profit the most by these advantages. It must learn how to make use of them wisely, practising a policy of peace and concord, increasing its powers of stability by the development of the sentiment of nationality, and by inspiring confidence both in foreign capitalists and in immigrants by accumulating capital of its own, and by learning to retain, in spite of success, the foresight which warns of perils and the prudence which avoids them.

E. LEVASSEUR,

_Member of the Institute, Administrator of the College of France._

INTRODUCTION

This book, intended to make known in Europe the present situation and the economic future of the Argentine Republic, comes at an opportune moment to fulfil its mission of popularisation.

During the last ten years of the nineteenth century the Argentine has suffered all the misfortunes and known all the disasters that can affect a rural and agricultural people. The locust, coming from the Tropics, devoured the crops; anthrax, imported from Europe, decimated the cattle; the threats of a war with Chili imposed enormous expenses and exhausted the national revenue; finally, a commercial and industrial crisis, and domestic disturbances, consequent upon the general misfortune, completed the tale of calamities which put the vitality of the nation to the test.

But as there is no night so long that it has no dawn, all these shadows fled away. Our quarrel with Chili was submitted to arbitration, and the decision of His Majesty the King of Great Britain not only terminated a cause of difference of fifteen years’ duration, but re-established fraternal relations between the two Republics. The rural plagues were attacked and vanquished by measures which experience indicated as preventive of recurrence; commercial and industrial prosperity returned; the tranquillity of the interior was assured; and the general welfare increased. To accentuate still further this beneficent reaction, the immense and fertile plains of the pampa, open to the activities of the agriculturalists, began to produce abundant harvests, which struck the European markets with amazement, and diverted towards the Argentine a current of gold which was estimated at more than £20,000,000, and a stream of immigration, which, in the year 1904, brought 125,000 workers, and which promises to be even greater in the present year.

The Argentine Republic has issued triumphantly from its lengthy and severe ordeal; it has emerged richer, stronger and more confident of its own destiny than at any other period of its history; and the increase of its revenues and the rapid growth of its prosperity have secured the attention of the great financial centres of Europe.

Public curiosity being thus awakened, many people have inquired: What is the Argentine? How far is the development of its wealth a sound and durable process? What is the probable future of its people? Is it a meteor that flashes brilliantly through space, or a star rising upon the economic and political horizon?

While some content themselves with asking such questions and awaiting their reply, M. Lewandowski, the representative of one of the greatest credit establishments in France, wished to gain some practical experience of the phenomenon. He took the most certain, most practical means; took steamer, crossed the ocean, and landed in the Argentine. With the learned collaboration of Señor Alberto Martinez, one of the most competent of men in matters of statistics and finance, he made a profound study of economic questions, and the present book is the outcome of their common observations.

This book should be read by all those who are not convinced that the word Europe sums up all humanity; but who take the pains, on the contrary, to follow the development of all other nations; understanding how necessary it is for the great nations to observe the progress and evolution of the younger peoples. Thus they avoid the risk of being surprised by the sudden apparition of great economic or political forces which they had not foreseen, or by which they had not known how to profit.

South America suffers from a prejudice that we cannot unhappily disclaim as being unjustified. The directing classes in France, as in all other European nations, with the exception of a small commercial and financial circle, seem to have been kept in intentional ignorance of all things relating to the nations of the new continent. The Argentine, Chili, Brazil, Venezuela, Ecuador,——countries separated one from another by enormous distances——are none the less, for the generality of Europeans, more or less one and the same thing; that is, they form a kind of a geographical nebulosity, which is known as _South America_. The post-office employés of Buenos Ayres have often occasion to smile when they read the addresses inscribed on the envelopes of letters dispatched by the learned and scientific bodies of Europe, and Argentines residing abroad continually find food for reflection in the questions asked them by persons occupying the highest positions.

Yet for the old world there is every incentive to study more closely the development of these new peoples. It is enough to point out that the Argentine to-day occupies as significant a position as that held by the United States at the beginning of the nineteenth century; and that its continued evolution will undoubtedly, before the end of the present century, give it an importance equal to that of the United States at the present time.

In a conversation with Mr Roosevelt and his Secretary of State, Colonel John Hay, I had occasion to make this very remark, and the President replied, with the rapidity of judgment and the affirmative tone which are so characteristic of his mind: “In less time than that; you will find fifty years enough; for you will profit by all our experience and all the human progress effected during the nineteenth century.”

The shadow of discredit which has hitherto lain upon South America is explained by the continual anarchy to which the majority of its peoples have lent themselves since the immense colonial empire of Spain threw off its fetters in the first quarter of the last century, in order to break up into fifteen separate republics. This anarchy and disorganisation, compared with the orderly spirit of progress which has reigned in the great republic of the North, have given rise to the belief, to-day general, that the so different destiny of these States was due to the special qualities and aptitudes of the Anglo-Saxon race, which the Latin races lacked.

This belief results from a superficial and incomplete examination of the facts, and has gained easy acceptance, even in works of a more or less scientific nature, such as _The Psychological Laws of the Evolution of Peoples_, in which the author cites, with regard to the Latin races and the peoples of South America, a number of inaccurate and prejudiced facts, which have been gathered from the writings of a dyspeptic and ill-tempered journalist. Such data have caused M. Gustave Lebon to deduce psychological laws which are hardly favourable to the South American races.

If we wish to gain some idea of the true causes of this diversity of destiny between the peoples of North and South America, we must study the origin of each and the particular form which colonisation has assumed in each case; forms imposed by the force of historic facts rather than by the will of man.

The Anglo-Saxons arrived in the American coasts and founded, in the first half of the seventeenth century, such cities as Boston, Charleston, Philadelphia, etc., when America had already been discovered and explored by the Spaniards a century and a half before. These colonies were formed of groups of families who had abandoned their mother-country to seek a new one, where they could live and labour free from the persecutions of religious and political intolerance.

When these colonies attained a certain fame, the surplus of the overflowing populations of Europe was naturally attracted by these virgin and fertile lands, relatively near at hand though across the ocean. Thus there formed a current of immigration which rapidly peopled America and utilised the great natural resources of its enormous territory. In this way was gradually formed a new people, which was to a certain extent a development of the various nations from which it originated, and which preserved their customs and their political and social habits.

These colonists began by buying land of the native tribes; but, increasing in numbers and in strength, they found it more convenient to rob them, thus forcing the Red Indians to retreat towards the north and west; and for reasons of self-respect, or on account of religious principles, no deliberate attempt was made to mingle with the indigenous population.

This form of colonisation, whose prime cause was to be found in persecution, not in the execution of a preconceived plan, resulted in the existence, at the end of the eighteenth century, of thirteen colonies peopled exclusively by men of the white races, originally natives of the countries of Northern Europe, who had transported to this new soil their manners and customs, their social and political laws, their liberal traditions and their economic system, so that from the moment they declared themselves independent, they were able immediately to form a single nation, united by all the ties which make for the cohesion of a people.[11]

[Footnote 11: The late Signor Pellegrini, in his anxiety to defend the Latin races, is not strictly impartial. At the time of the Declaration of Independence the population of the States was very largely English (with a substratum of Dutch in New York) but of different periods; and these different periods preserved their own traditions. The difference between the New England Quaker and the Kentucky trapper, or the Virginian fox-hunting squire, and the Dutch patroon or Highland crofter, was as great as any to be found among the Latin races, if not greater, and was largely a difference of arrested periods as well as a racial and a social difference. The result was that Federalism was accomplished peacefully only by the genius of Hamilton.——[TRANS.]]

To attain such progress, to reach the summit on which they rest to-day, the United States had only to persist in the same path, to follow the same groove, and the incontestable merit of this people and of its great statesmen is that they have been faithful to the principles of liberty and equality which they inherited from their ancestors, the venerable “conscript fathers”; principles which they ratified in the admirable Constitution whence this vast political organism has derived its cohesion, its vitality, and its strength.

How different were the origins of the peoples of Latin America! The Spanish sailors did not cross the ocean like the passengers of the _Mayflower_, or the companions of Penn, seeking solitary shores, known though distant, where they might establish a home, there to live and labour in peace and liberty.

The Spanish navigators, as brave as they were audacious, launched themselves into the unknown, guided only by their own genius, in order to discover a world, to conquer new lands, new subjects, for their country and their king; and in the pursuit of that heroic dream they performed exploits which to this day amaze us by their audacity.

These were the famous _conquistadores_, whom one of their descendants, José Maria Hérédia, has celebrated in the admirable lines:——

“As from the natal charnel-heap a flight Of falcons: sick of purseless pride at home By Murcian Palos pilots and captains come With brutal and heroic dreams alight:

They seek the fabulous ore that comes to birth And ripens in Cipango’s distant mines, And the trade-wind their long lateens inclines Toward the dim limits of the Western earth.”

These first colonisers of Spanish America——soldiers, missionaries, officials, adventurers, men without family——seized upon a whole continent, which they discovered and conquered at the price of unheard-of exertions. They parcelled out the land, subjugated the native tribes, reducing them to servitude in their famous _encomiendas_, or putting into experimental practice, as in the Jesuit missions, theories of collectivism, which is to-day regarded as a modern invention. It was a true feudal system that arose in the new world.[12]

[Footnote 12: It must be remembered, in comparing North with South America, that the former also had its period of extensive slavery, its plantations worked by convict labour, and for a period an almost feudal system.——[TRANS.]]

If, on the one hand, the native races were initiated into the doctrines of Catholicism in exchange for their liberty and independence, they did not, on the other hand, receive from their masters any political instruction, but preserved their habits of submission and passive obedience to their chief, which constituted their sole political tradition.

When, therefore, the day of emancipation arrived, and this enormous colony, in arms against its oppressors, declared itself independent, and divided itself into several Republics, the great mass of the population consisted of Indians converted to Christianity, and half-breeds, who preserved their habits unchanged and had no ideas, no traditions, other than that of government by individual might.

Only in the urban centres did the white race, with its conception of political institutions, predominate. And when the new Government wished to organise itself in an independent manner, the two tendencies and traditions, which correspond to two distinct mentalities, violently clashed, and began that long struggle, not wholly terminated even to-day, of which the history is the history of anarchism in America.

Another factor that also procured this conflict was the colonial political economy of Spain, which was not only a mistake, but a mistake of the period; an error which closed the whole continent to commerce, shut it away from the outer world, and maintained these masses of humanity in ignorance and isolation, in order to exploit them simply as a machine, or as an element of wealth for the service of their masters.

The problem which confronted the politicians of South America when they found themselves face to face with this new people, whom they must of necessity organise, was thus very different from, and far more difficult than the problem which the founders of the North American Union had to resolve.

These native masses obeyed with all their might and with the utmost enthusiasm so long as it was a question of fighting against the foreign troops and of winning their independence; but, victory once assured, guided by their leaders, the _caudillos_, most of whom were white, they revolted against the tendencies which began to show themselves among the Europeans of the cities, and in many places succeeded in dominating over them by force of numbers, thus preventing all political and administrative progress, and maintaining, as their form of government, the personal, arbitrary, and irresponsible power of a leader, that is, of the _caudillo_.

The written Constitutions which these people had established upon declaring their independence, and which were inspired by the Constitutions of the United States or the Swiss Republic, were thus reduced to a dead letter, as they were in complete contradiction to the political habits of the mass of the populace, and required, for their application, a political education which the peoples of South America did not possess. A whole century had to elapse before immigration, material interest, and the influence of civilisation, were able slowly to modify the political mentality of these peoples, by reinforcing and popularising the principles of government, extirpating the elements and suppressing the causes of the anarchy which had so long disturbed them.

Among the nations which experienced these beneficent influences, the Spanish colony known as the _Viceroyalty of the Rio de la Plata_, to-day the Argentine Republic, was quite specially favoured. Its territory, composed of immense prairies, the celebrated Argentine “pampas,” stretching from the sea-coast and the river littoral, offered the unique wealth of their fertility and their climate. There were no mines of gold or silver to arouse the greed of adventurers; they came to these regions only to traverse them, and so to proceed immediately to the gold-bearing regions of the distant Cordilleras.

Moreover, the first colonists who established themselves on the banks of the Plata, repulsed and expelled by the natives, were forced to abandon a certain number of cattle and horses, which found in these prairies an admirable opportunity to live and multiply in freedom, until finally they formed the immense herds of wild cattle and horses, whose hides became the principal wealth and the chief article of commerce of these regions.

Although the Rio de la Plata had no commercial relations with the outside world, and was only able to trade with Cadiz, the immensity and the solitude of its shores favoured a contraband trade; to such a degree that English, Dutch, and Portuguese smugglers came from all parts to exchange their manufactured articles for the hides of these wild herds.——This it is that explains how Buenos Ayres was able from the outset to become a great commercial centre, in which the trades dependent upon stock-raising quickly occupied the first place.

Commercial activity, the development of communication by sea, the fertility of the soil, the climate——all contributed from the early days of emancipation to attract European immigration. This immigration, like that which peopled the America of the north, was composed of families who came to settle, to form new homes, to labour. These families, following the example of their predecessors in the United States and for the same causes, did not mingle with the native tribes, but struggled against them, and forced them to abandon their lands and fly to the south, until at last, after a long and cruel struggle, they almost completely disappeared.

This immigration increased year by year, and to-day the great majority of the population of the Argentine Republic——a population now exceeding 5 millions——is of European origin.

That this immigration, which flows from all the nations of Europe, has been the chief agent of the present prosperity of the Argentine, and is the condition of its future greatness, is an incontestable fact. One of our leading statesmen has declared, of America, that “to govern is to people”; and this aphorism has remained a fundamental principle of government. To recognise the full force of this assertion, we must reflect that these unusually fertile prairies, situated in a privileged climate, near the sea-coast or on the banks of enormous rivers, navigable even by transatlantic steamers, need nothing but human labour to transform them, with less effort and at less expense than anywhere else in the world, into immense fields of wheat or maize, or pastures of lucerne, covered with herds, able to produce bread and meat enough to feed all Europe.

Accordingly the agricultural production of the Argentine Republic is limited only by the number of hands which lend themselves to its exploitation; in which we have a repetition of the very phenomenon which has served as the foundation of the development of the United States.

Under these conditions the progress of the Argentine Republic is a necessary and inevitable fact, which extraordinary circumstances might for a time retard, but which nothing could finally arrest; except, indeed, one could restrain the daily exodus of fresh swarms from the human hive, which abandon the old soils, exhausted by production, to seek out the fertile, virgin, and unpeopled areas of the globe.

Hitherto this exodus has been directed principally to the United States; attracted thither by a host of special and favouring circumstances. But the time is rapidly approaching when North America in turn will find herself populated to the saturation point, and will no longer be able to receive the hosts which benefited her formerly. The laws of the United States are already beginning to impose conditions upon immigration which are constantly becoming more severe; and these laws are imposed by the two great political forces——the superior social classes and the lower classes of the people.

The upper classes, Anglo-Saxon in origin, fear that contemporary immigration, coming as it does from peoples of alien race, from the south or east of Europe, may modify or enfeeble those great moral and political qualities to which they attribute the greatness and prosperity of their nation. On the other hand, the federated workers see in these new arrivals, healthy and vigorous, but having fewer needs, a source of dangerous competition, which may have a disastrous influence on conditions of labour and payment.

The stream of irrigation which is now setting in towards the United States, and which amounted in numbers to 800,000 in the year 1904, must necessarily therefore, as time goes on, turn aside in other directions, and as it will nowhere meet with more advantageous circumstances than in the Argentine, it will flow thither as it flows already, but in greater and greater numbers, resulting in a development of wealth and power superior to any hitherto known.

Some persons, however, formulate certain reservations as to the consistency and the political and social value of nations formed by these human inundations, composed as they are of men of different races, having neither the same language, nor the same religion, nor the same customs; they doubt whether this new Babel can give birth to a national spirit sufficiently vigorous to impress a character of political and moral unity upon these new recruits.

In order to prove that these fears are ill-founded, we have only to take the practical example furnished by the United States. Into this vast national crucible there poured, from the outset, the stream of emigration from Great Britain, Holland, France, and Spain; later came Scandinavians, Germans, Lithuanians, Poles, Hungarians, Italians, Syrians and Arabs. From the fusion of all these elements has issued a new race, homogeneous and powerful, with a strong national spirit which is known as “the American spirit,” and under that name has won the respect of the world. This result is neither accidental nor due to special antecedents; it is the consequence of a natural evolution, ably and intelligently directed.

The European law, which attributes to the son the nationality of his father, may have had its justification in the past; to-day it is maintained only by force of tradition.

Nationality and love of country are only an extension of the love of the family and the home; and these sentiments cannot, any more than others, be forced upon one by law. There can exist for a man only the home and the family in which he was born and bred. Doubtless he will feel himself attached to the home of his forbears by ties of sentiment and respect; but all the roots of his intimate feelings bind him to the home and the family into which he was born; they are in his blood, and thence he has received the first impressions which mould his character and imprint those characteristics which form his personality.

It is the same with nationality and the mother-country. It is useless to attempt to persuade either child or man that his country is not that in which he was born, in which he has grown up, but another distant country which he has neither known nor seen.

The difference of origin among the children of immigrants of different nationalities disappears in childhood, through the community of life in school and workshop; through sharing alike in work and play; and it is in the earlier years of life that the mind is moulded by its surroundings; in these years develops that feeling of attachment to the soil, of union, solidarity, and common memories, that shows itself later in an ardent patriotism. Unity of language necessarily favours the process of fusion, and explains the fact that the descendants of immigrants of different race, religion, language, habits and traditions, are able to fuse so completely as to form a perfectly homogeneous population, one in mind and in sentiment, thus constituting a new nationality, young, vigorous and strongly individual.

We have thus under our eyes a practical example of the unity of the human race. The hazards of life, in the course of centuries, having dispersed the primitive race throughout the earth, it has formed, under the influence of circumstances, new types, which in the course of time have met and mingled, to form new crosses in their turn, which as a matter of fact are only the modalities of a common primitive race.

The same phenomenon is being repeated in the Argentine, as in all the American republics, and the spontaneous and vital sentiment of nationality continually strikes the observer, who notes the pride with which a child born in Argentina, whether he be the son of a Spaniard, Frenchman, Italian, or German, affirms, when questioned, that his country is the Argentine.

Thus this Republic possesses all the requisite conditions of becoming, with the passage of time, one of the greatest nations of the earth. Its territory is immense and fertile, its surface being equal to that of all Europe, excepting Russia; it is capable of supporting with care at least 100 millions of human beings; almost every climate is to be found within its limits, and, consequently, it can yield all products, from those of the tropics to those of the polar regions. Its rivers and its mountains are among the greatest of the globe. As its maritime frontier it has the Atlantic, which brings it into contact with the whole world.

It is governed by institutions more liberal than those of any other nation, especially in all that affects the foreigner; it regards the influx of immigration with approval, and seeks to promote it. In proportion as its vast vacant spaces become peopled their value is increased tenfold, and production grows at an enormous pace; for a single family, by the aid of modern machinery, can exploit a larger area of soil, yielding a produce far greater than is required for its own consumption; a fact which explains the surprising rate at which the export trade has increased.

Such are the true causes of the prosperity of this country, as is proved, with abundant detail, by MM. Martinez and Lewandowski; and as these causes are not accidental, but fundamental and permanent, they should produce in South America the same results as in the North.

Granted that wealth and prosperity are essentially conservative elements, we have here a serious guarantee of political stability; the more so as the country has already passed the difficult age and is cured of the malady endemic to South America——anarchy.

It is also to be hoped that our Argentine politicians, taught by experience, and comprehending all the responsibilities imposed upon them by their noble mission——the work of racial regeneration and the betterment of South America——will succeed in making constitutional government an actual fact, by restraining and uprooting the tendency to personal power, which is the lamentable heritage of indigenous tradition.

It is a great nation that is rising on the brink of the twentieth century; the mistress of an enormous inheritance. Immigration and the increase of the birth-rate are furnishing it with the arms it requires; it lacks only those reserves of capital which, like all new peoples, it has not as yet had time to create.

In no country can European capital find a more fertile or advantageous field for its operations: a fact already well known in England; and one the authors of this book have wished to emphasise for the greater benefit of French capital. In this they serve the interests of France and, still more particularly, those of the Argentine Republic; and in the name of my own compatriots, as well as for myself, I take this opportunity of expressing my sincere gratitude.

C. PELLEGRINI.

THE ARGENTINE IN THE 20TH CENTURY

GENERAL PLAN AND METHOD OF THIS BOOK

Before commencing a study of the financial and economic situation in the Argentine Republic, it is important to decide at the outset as to the spirit in which this examination should be pursued, and the method most proper to such an inquiry. We tread upon a novel and peculiar field, and any too rigid comparison with the events of other countries might easily lead us to errors of appreciation.

Above all we must practise the philosophical principle _nil admirari_; we must be astonished at nothing, and abstain from all too absolute judgments. Although, as the figures of foreign trade will show, the progress of the country has surpassed all expectation, it is, on the other hand, almost impossible to foretell how far the results of one year will be ratified by the year following.

Like all young nations, the Argentine progresses on its path to the unknown by leaps and bounds; it is as yet in an unstable condition, in which the oscillations of prosperity are still of great amplitude and exceedingly sudden.

It is easy to discern the cause of this essentially unstable condition.

The Argentine, in its present phase, is an agricultural country, whose principal sources of wealth are cereals and stock-raising; the result is that each year the whole life of the country is affected by the harvest.[13] On the harvest depends, in a great degree, the movements of external commerce; it produces those sudden changes which occur from year to year, and which result occasionally in a variation of £8,000,000 to £12,000,000 above or below the average.

[Footnote 13: We use the word harvest here in its widest sense, but we must ultimately distinguish the results of stock-raising from those of agriculture, since they do not necessarily vary in the same direction.]

The harvest influences not only the exports, more than half of which consist of agricultural products, but has no less an influence on the value of importations.[14]

[Footnote 14: The value of the exports in 1907 was £59,240,874, and according to the official figures the products of agriculture amounted to £32,818,324.]

The national powers of consumption are, in fact, very intimately connected with the measure of the agricultural output; as the latter is bad or good, the home consumption absorbs more or fewer imported products. Thus the poor harvests of 1901 and 1902, which resulted in a fall of nearly £1,800,000 in the cereal exports, produced in 1902 a fall of £800,000 in the imports of iron and materials used for construction. The same depression was visible in the imports of textiles and beverages, and still more so in those of articles _de luxe_. The spending powers of the country being closely dependent on the facility of realising the products of the soil, it is easy to understand that in the case of a bad harvest or a poor market the consumers have no longer the same powers of purchase.

We find the same ups and downs in the figures of the Budget, the contributive powers of the country being influenced by the same causes as its consumption. If the crops are poor, the Budget of the following year shows immediate traces of the fact. Thus in 1902, the year of the bad harvest, the total receipts were estimated at £5,534,000 in paper, and £9,486,669 in gold; but the actual receipts were only £5,221,000 in paper, and £8,047,755 in gold; a deficit of £1,438,913 in gold.

At the same time the Customs receipts, which are the most variable item of the revenue, on account of their direct relation to consumption, have fallen from one year to another (as in 1903 compared with 1902), as much as £1,200,000 in consequence of the agricultural crisis.

There is an equally direct relation between the financial situation and the results of the harvest. If the commercial balance is favourable, the Argentine becomes a creditor of foreign countries by the excess of its exportations, and the resulting payments in gold, after the deductions of the interest on the foreign debt, increase the proportion between the metallic currency and the monetary circulation in general.

As these few examples prove, the prosperity of the country is subordinated to the result of the harvest; the latter gives the measure of all improvement, all progress of a financial and economic order. Unlike the ancient European nations, the Argentine Republic has no reserves of accumulated capital behind it, so that it can live on its own savings in times of crisis. Its commerce and its industries depend almost exclusively upon its agricultural yield, and share all the latter’s vicissitudes.

All depends on the value of the soil, the basis of public and private wealth. The power of expenditure which follows a good harvest may contribute towards proving personal property, but the latter remains always strictly related to the agricultural yield and general produce of the soil, and does not constitute an easily-realised reserve.

For the rest, we must recognise that, as a rule, this capital does not remain inactive, and is as little as possible sterilised by investment in the public funds. Those who possess available cash, in the shape of revenue from a large estate, usually employ it by increasing their stock of cattle, or in reclaiming more land, or by investing it in other estates; so that all that comes from the earth returns to the earth, and goes to increase its yield.

The peculiar situation of this great agricultural country, which constitutes at once the strength and the instability of the Republic, shows us in what spirit and by what method it should be studied. All depends upon the yield of the soil, for this is the great dispenser of the national wealth; it is therefore the agricultural system that we must examine first of all, if we wish to arrive at a solution of the problems arising from the present condition of the Argentine or predict its future.

To follow out this general plan, we must consider the country first of all from two standpoints: we must examine into its production and its markets or outlets, in order to learn the true conditions of its existence, the value of its soil, and its sources of revenue.

We shall then proceed to examine its administrative machinery, showing how the Argentine lives and progresses as a nation, and to analyse its financial and monetary organisation with reference to the economic situation.

The two portions of this scheme are closely connected, and their study must lead us to the same conclusion, that the Argentine is a nation in a state of growth, and, like all young nations, still uncertain of its first steps; but it is animated by a spirit of initiative, and urged by the breath of progress, which may lead it to a high destiny among the great productive countries of the earth.

THE ARGENTINE NATIONALITY[15]

Is there an Argentine nationality, and what is its significance in respect of the territory it occupies?——The formation of this nationality.

An examination of the qualities of the Argentine people.——Sense of progress; remarkable faculty of assimilation: character essentially practical.——The fusion of the Latin genius with Anglo-Saxon energy.

The contrast between the political world, with its instability and lack of organisation, and the economic world, which manifests intense vitality and national progress.——The necessity of developing the national idea, and of raising it above material questions.——The slow elaboration of a new race born of the various elements of immigration.

[Footnote 15: We must here explain that the Argentine possesses two currencies: the piastre or dollar, whose value is 5 francs, and the paper piastre, which by the law of conversion is equivalent to 2 francs 20, or 1s. 7·2d.

As for weights and measures, the decimal metric system has been adopted. In surveying large areas, the square league is occasionally employed as unit, which contains 2500 hectares, or 5628 acres = about 9-1/2 square miles.

We should also explain that the Argentine Republic, of which the Federal capital is Buenos Ayres, is divided into fourteen autonomous Provinces and ten national Territories. The Provinces, in the order of population, are as follows: Buenos Ayres, Santa Fé, Córdoba, Entre Rios, Corrientès, Tucuman, Santiago de l’Estero, Mendoza, Salta, Catamarca, San Juan, San Luis, La Rioja, and Jujuy.

The national Territories are: La Pampa, Misionès, Nequen, Rio Negro, Chaco, Formosa, Chubut, Santa Cruz, the Andes, and Tierra del Fuego.]

To present a complete picture of the Argentine, it is not enough to describe its configuration, its great rivers, its climate, its population, its forms of agriculture, and the value of its soil; all this is a dead letter, and will by no means yield us the secret of the country’s future, unless we first resolve one question of a sociological character: Is there an Argentine nationality, and what does it signify in respect of the territory which it occupies? Could one, for instance, estimate the importance of the United States merely from the point of view of their agricultural and mineral wealth, without taking into account the work and the character of the admirable Anglo-Saxon race, which has adapted itself to American soil, and has succeeded in obtaining from it its full value?

And could we explain the fact that certain countries of South America, which also, thanks to their natural wealth, have all the elements of rapid development, have remained stationary, and hardly count as nations, if the question of race did not throw light on the mystery, showing us that with the most favourable factors of the soil, a ferment is essential to start the growth of the seed?

Concerning the Argentine, this then is the problem which we have to consider, if we wish to see further than the present moment, and to judge in what measure its progress may be consolidated and even accelerated. In other terms, we must understand whether the Argentine must depend upon a fortuitous grouping of individuals brought together by the various streams of immigration, and having no common tie but the desire to enrich themselves, or whether these various elements are destined to become fused, and in time to form a true nationality, with its own traditions, its own ideal.

This latter is naturally the end to be pursued by the Argentine Government, if it wishes to prepare for the future by making moral and material progress go hand in hand. Its _role_ is not to manage the country like a directing syndicate, but to direct all individual efforts, all initiative, and all other available forces, to the same national and patriotic end.

It was this idea that a President of the Republic, Señor Quintana, felt it his duty to enunciate, when, upon assuming the Presidential authority, he stated, in his inaugural message: “I am the head of a nation which has in America an ideal”; and he added: “There is one common characteristic among us that was discovered as early as the colonial period, in the magnitude of plans of campaign, in the clamour of intestine conflict, in the government of the constitutional period; it is, that we all bear in our hearts the sense of our future greatness.”

How far can these aspirations be translated into facts? That is a question we must examine seriously and with an absolutely unbiassed judgment.

We cannot study this question of the Argentine nationality in books; for a country which has been so rapidly carried away on the tide of material progress has but little time to examine itself. Neither has it been able to form a literature or a sociology which might reflect the dominant characteristics of the generation; it is only by an inquiry and an analysis of the facts that we can isolate this element of nationality from the various foreign elements which have contributed to its formation.

One factor that facilitates our task is the clear-sightedness of the Argentines themselves, who are the first to recognise, with abundant good-temper, their own shortcomings. They are almost exaggerated in their self-criticisms when depicting themselves; and our work has been cut out for us in avoiding too hasty generalisations and in softening certain too rigorous judgments, although these emanated from men who were certainly in a position to understand the tendencies of their generation.

One principle dominates the whole question: it is that which a contemporary historian expresses in these terms: “When peoples come into contact they begin by an exchange of their faults.” Such an observation might well apply to a people like the Argentines, who are not yet settled on their own foundations, and are constantly increased by immigration.

All the varieties of the Latin race have contributed to form this people: Spain and Italy have made the largest contributions, and France has also in her time contributed her share. The Argentine has even assimilated a Basque population, of especial interest on account of its aptitude for agricultural work, and its adaptability to its new surroundings.

Finally, the Anglo-Saxons have also entered the Argentine, to mingle with the Latin element, and have given great assistance in opening up the country, by setting an influential example of initiative, progress, and energy. This penetration of the Latin race, a little indolent and inactive as it is, by the energetic and progressive Anglo-Saxons, enables us the better to understand the good and bad qualities of the Argentine nationality.

In short, if we are to obtain an unbiassed view of the national physiognomy of this adolescent people, we must remember that its good qualities, like its faults, are the result of the commingling of the varied elements which have entered the country by immigration; elements that have mixed and reacted upon each other, so that their dominant characteristics have finally appeared in the Argentine character.

There is one gift which we cannot deny this people: intelligence, joined to a remarkable power of assimilation. It also has that gift of enterprise, that sense of progress, which are found in the Anglo-Saxon races, and which have found such magnificent scope in the United States.

A young nation, without a past, the Argentine is not impeded, like most of the Latin nations, by a load of custom, prejudice, and routine, hampering its motions and impeding its progress. Profiting by the experience of others, it knows how to adapt itself to the best; taking its good wherever it finds it. It creates nothing, invents nothing, but appropriates all new ideas, which find upon its soil the conditions favourable to a rapid expansion. It is, indeed, formed after the likeness of its own soil, which produces without effort and lends itself admirably to every kind of culture.

This sense of progress is certainly the most characteristic trait of the Argentine, and the one by which it is distinguished among the other Latin nations of South America. Uruguay, for example, which possesses a soil as rich, and offers the same facility of transport, has given no proofs of initiative and vitality to lead one to hope that she has really entered upon the path of progress. It is the same with Paraguay and many other States, which have not succeeded in accomplishing any of the changes demanded by modern civilisation.

The Argentine, on the contrary, has always known how to derive benefit from whatever source was available, thanks to the current of immigration which keeps it in permanent touch with foreign countries. It has also assimilated the inventions and the methods of more civilised nations, and has attracted men capable of applying them. At the head of the great administrations of the State, one often finds specialists from Europe or the United States, who bring the fruits of their experience, and increase the intellectual possessions of the nation. The departments of railroads, navigation, public works, and hygiene, thanks to these happy selections, offer every security of efficiency in operation.

One may say, it is true, that this is the result of foreign influence; but what does the origin of all these improvements signify in respect of the future, so long as they become incorporated in the life of the Argentine and contribute to its evolution? One thing which proves that the instinct for progress is at the heart of the national temperament is that it is found in the lower strata of certain public services in which the foreign element plays no part. The administration of the police, for instance, and that of the posts and telegraphs, to cite no other examples, are conducted with as great a regularity as in any European country.

Thus, while allowing that the initiative of all improvements comes from abroad, we must not overlook the fact that the Argentine has assimilated them with the utmost facility, and that this gift of assimilation forms to-day a valuable portion of the national patrimony.

Despite its eminently cosmopolitan character, which is a peculiarity of its development, the Argentine Republic has succeeded in retaining its own personality among so many diverse elements. It is the type of the modern nation, whose ideal is that of the United States——_business_. A man is _zonzo_ or _vivo_——a fool or more than capable——there is no medium.

From this point of view the Argentine is at the apex of its period; it has no use for abstract ideas or immortal principles; its ambition being above all to sell its corn and cattle and to enrich itself. Behind the agitation of the political parties there is no other object than this: to share in the exploitation of the country and to enjoy its wealth. The heroic period is over for the Argentine; its independence is to-day definitely assured; it pursues no dreams of conquest now, but seeks only pacific victories for its products in the great international markets.

Prosaic as the present generation is, it is not, from our point of view, completely without nobility; it loves its native soil and glorifies it; not, assuredly, after the fashion of Virgil saluting the Latin soil, fertile of heroes, but as a land productive of rich harvests, and the source of material prosperity. This it is that explains the powerful attraction which the Argentine exercises upon all those who have trodden its soil. The country progresses with such rapidity, the value of the soil increases in such proportions, that the most indifferent end by being drawn into the stream. Those who come to live here without any idea of final residence make up their minds to settle as soon as they hold the smallest parcel of property. When a man has lived some little time in the Argentine, and has watched the spectacle of its rapid development, he is quickly seized by the business vitality which forces him to take part in the great movement.

This love of the Argentine for his land may certainly have its noble side, but he knows nothing of the moving spirit of poetry which clothes that love in the old countries of Europe, where man becomes attached not only to the cultivable land, but to all the memories of the native village; the familiar hills and meadows, the old church, and all that puts us into communication with the soul of places. It would seem as though one holds more closely to the earth that demands the most labour, the greatest efforts, even the greatest disappointments.

No one was ever more attached to the land than the Boer, who lived at peace in an ungrateful soil, indifferent to the mineral wealth which it might conceal. It was this land, where he lived an independent life, that he defended so stubbornly; not the gold, which was yet the true wealth of the country.

The Argentine also has seen pass over its soil the same rude generation, having no other dream than independence. The “guacho” of old, a mixed type of the Indian and Spanish races, the true son of the pampa, was truly attached to the immense plain upon which he lived at the call of caprice, a wild rider in every sense. To-day the type tends to disappear, as civilisation, and more especially administration, everywhere make their influence felt; as the ancient virgin pampa is transformed into cultivable soil, bristling on all hands with barbed wire. As he was not easy to domesticate, nor break in to any continuous labour, the “guacho” has been supplanted little by little by the foreign farmer, the colonist; and to-day he is almost submerged by the wave of immigration which has invaded the country, and which forms now the major part of the population.

From the men of this new generation one must ask no other love for the soil than that which is born of the profits they draw from it. They can move indifferently from north to south, from east to west; the soil for them is everywhere the same, provided the harvest be good. But, apart from that, they nevertheless love this land of promise, and interest makes them its children.

From this generation, whose principal traits we have noted, it seems that we may in the future expect great things.

To be sure, if the world were to return to its old ideal, that of glory or imperialism, we hardly know what place the Argentine would find in the scheme of things. It is unsuited to a military policy; it has no ambition to measure itself with neighbouring nations, which are far more eager for adventure.

But if we stand on the economic plane, the only one which interests us, we must allow that this generation is well armed for self-defence in every field of the commercial struggle. From the fusion of the Latin genius with the Anglo-Saxon energy has issued a new product, extremely capable in business, full of practical sense, and very open to progress, which will be fully able to hold its own in a century in which money is the great instrument of domination. This race, formed haphazard of immigration, is yet the very race for Argentine soil; between the two there is a correspondence, an adaptation, as perfect as if it were the result of long-continued design.

To sum up: the Argentine nationality appears to a foreigner under two distinct aspects; there is its political side, characterised by instability and lack of organisation, and the economic side, in which an intense national life and progress are manifested. Will this truly abnormal situation, containing both very bad and very good elements, perhaps, terminate favourably, making of the Argentine people not merely a rich, but also a great nation? Will the development of public affairs, left so far to the hazard of politics, even reach the plain of our economic development? Will the Argentine nation eliminate, under the pressure of material progress, the leaven of anarchy left behind by a century of civil dissension? This is the secret of the future; this is the great achievement which remains to be accomplished in order to consolidate the present prosperity of the country.

In short, we must not lose sight of the fact that this prosperity has hitherto been less the work of man than of nature, which has been prodigal of her gifts to this fortunate land. This is a thought which has been expressed in a speech in the Argentine Senate, in which Senator Uriburu shows that Providence is always coming to the rescue by repairing the fault of the State.

“It is Providence,” he says, “which so opportunely sends us the rains to water our lands and to raise our marvellous crops; it is Providence that has given us the greatest Minister of Finance we have ever known, our fertile soil and our clear sky; the supreme Minister who looks after all our needs, who saves us from all difficulties, and who, despite our errors, continues to ensure the greatness of the Republic. Let man appropriate his work, but let him render unto Cæsar that which is Cæsar’s.”

And now if by some impossibility the situation were to change: if in spite of the enormous extension of cultivated lands a period of bad harvests were to follow the present period of fat cattle: would there not be reason to fear that the whole national edifice, founded as it is on prosperity, might become disintegrated, and crumble under the stroke of adversity? This is the peril we must indeed seek to avoid; it is for this reason that the intervention of a strong power seems necessary, in order to restrain the germs of evil brought by so many races, and to prevent the Argentine from falling back into the state of anarchy and revolution which for her is only a distant memory.

Taking even a more elevated standpoint, we may add that in order to amalgamate all the elements of immigration and to attach them to the country, through good and evil fortune, we need another solvent than personal interest or profit. To create a people it may suffice to give it a body, but to make it live it must also be given a soul, at whose breath the collectivity of individuals will be transformed into that moral unity which we call the nation. This is a question of prime importance in a country such as the Argentine, where the struggle for existence has taken a particularly keen form, which scarcely favours the development of disinterested sentiments.

It is for the State to develop among its people this national idea, and to turn all individual efforts to its profit. Its duty is to raise its authority above the medley of interest, to restrain ambition within a just limit by the influence of moral and patriotic ideas, and so to ensure the reign of justice and social peace, without which national prosperity will never be more than ephemeral.

In imagining, from this aspect, the formation of a nationality, we have no intention of criticising the country; still less do we deny the process of evolution which has gradually transformed its organisation. A nation is not created in a day, especially when it is a question of a country so young as the Argentine, which in less than a century has issued from the struggle for independence, and even to-day has hardly rid itself of the revolutionary spirit.

For a nation to become self-conscious, centuries must pass; traditions must be formed, and the great moral or intellectual forces of humanity——religion, science, literature, even poetry——must develop the sense of a collective life other than the life of business. And hitherto the Argentine has had no time to produce generations of thinkers, philosophers, and historians; still less poets. The most it has are statisticians, who give it the precise figures of her commercial balance.

We do not doubt, however, that, thanks to material progress, this slow elaboration of a new race will eventually be completed. In the first phase of her existence as a nation Argentina, according to the spirit of her Constitution, fraternally opened her doors to all who wished to inhabit her soil. No restriction was placed upon the entry nor on the permanent immigration of foreigners; on the contrary, legislation and social customs combined to favour immigration. The result is, that the new arrivals have regarded themselves as alien, in matters of economics and politics, to the nationality with which they have become incorporated; believing that their mission consisted solely in creating and circulating wealth, while regarding the solution of the great national problems with indifference.

But to-day the Argentine has entered upon a new phase; it must no longer merely receive, it must also incorporate all these elements of immigration, and, without awakening antagonism towards the foreigner, it must set to work to absorb him into the soul of the nation.

This faculty of assimilation is a virtue of the American soil. The United States have proved as much for North America, and it now remains for the Argentine to do the same for South America. The new generation of immigrants, having struck root into its hospitable soil, must live completely in the national life, absorbing those feelings of patriotism which animate the new citizen of the United States.

To give expression to these loyalist tendencies, we will confine ourselves to quoting the memorable words which were spoken in the Congress of Wisconsin, by an American congressman, born in Germany, the Hon. Richard Günther; words which were equally applauded and approved in Latin America. We shall perceive, through the very exaltation of his phrases, what unreserved devotion a naturalised foreigner may bring to his new country:

“We know as well as any other class of American citizens where our duty lies. We labour for our country in times of peace, and we shall fight for her in time of war, if ever such time arrive. When I say our country, I naturally mean our country of adoption, the United States of America. After passing through the alembic of naturalisation we are no longer Germans; we are Americans. Our attachment to America cannot be measured by the length of our residence here. We are Americans from the moment when we reach the American shore, until the day when we are laid to rest in an American grave.”