CHAPTER XIX

TO-DAY AND TO-MORROW IN THE ARGENTINE

Although there is a great deal in South America to appeal to the sense of the historic, to render the study of the past interesting and profitable, in the Argentine the past does not greatly engage anybody. There is a general concurrence with the Oscar Wilde dictum that the best thing about the past is the fact that it is past. Here and there native scholars devotedly tend the lamp of History, and from time to time remind the populace of past events worthy of celebration, whereupon the populace, nothing loath, celebrates, and every electric light in the country blazes forth, though it might be difficult to obtain from the average citizen a really intelligent appreciation of the event thus commemorated.

Speaking broadly, everybody in the Argentine is looking forward; few indeed are they who pause to take a backward glance. To-day and to-morrow are the things that matter; not yesterday, nor the day before. And to-day matters less than to-morrow. I have already mentioned the propensity of the landowners and venders of “lots” to discount the future in their sales. This was confirmed to me by various gentlemen acting for large English and French syndicates in land purchases in different parts of the Republic. All were agreed that it was well-nigh impossible to find a landowner prepared to talk business on the basis of current market values. Yet I was told by those in whose judgment I have the fullest confidence that agricultural land, enormously though it has increased in value of late years, is not yet inflated beyond its intrinsic possibilities. Certain lands examined with the greatest care by two Australian experts were, they assured me, though offered much above their present market value, obtainable at little more than half the price of similar land in Australia. Hence they reasoned that, even allowing for the likelihood of having to pay more than a legitimate price according to actual conditions, the possibility of buying agricultural land in the Argentine which would depreciate in value was very remote.

Mention of these Australian experts reminds me that a very interesting movement was noticeable in 1912 and has probably increased in volume since. Owing to the excessive and vindictive restrictions which the Labour Government of Australia had imposed upon property holders, many of the large Australian landowners and agriculturists were beginning in 1912 to look abroad for new fields where they might invest their capital. The Argentine naturally attracted them, similar as it is in many ways to Australia in soil and climate. The gentlemen above mentioned represented between them a potentiality of some $20,000,000 of investment in Argentine lands, and so favourably impressed were they with the splendid possibilities of the soil that I do not doubt they will yet become—if they have not already forwarded their negotiations—owners and developers of large tracts of Argentine territory, the folly of the Australian Labourists driving their millions of money forth from the land where it was earned to fructify a foreign country, and incidentally to earn greater increase for its owners.

It is not to be supposed, however, that everybody who engages in land speculation in the Argentine makes money thereby. In all countries that have passed through a period of “land boom” there will ever be a larger proportion who lose than gain. Many English residents in Buenos Ayres engage in a small way in land speculation as a “side line” or hobby, with an eye to the possibility of adding to their incomes. But those with whom I discussed this matter nearly always concluded by admitting that, so far as they were concerned, the game was not worth the candle, as the anxieties incident to the speculation, and the necessity of watching the market day by day, constituted a serious interference with their ordinary business, which in the end the profit hardly justified. At the same time, one heard many stories of fortunes rapidly realised by successful “deals,” that seemed to make all honest work for payment a futile farce. Here is one of many instances.

A young English dentist—one of the most lucrative professions in the Argentine, by the way—was doing very well in Buenos Ayres. He did not own his premises, nor did he even rent them direct from the owner. He was no more than a lodger, and possessed only the instruments and appliances of his profession. But his services were in large request and well rewarded, so he ventured upon matrimony, his sweetheart going out to be married to him, as he was too busy to come home. The young wife took with her a considerable quantity of furniture, including a fine dining-room suite, the gift of her parents. A house was taken and furnished, and the dentist still continued to carry on his work at the old address where he rented rooms. Business continued excellent. Meanwhile, a friend had mentioned to him that a certain plot of land was for sale in a part of the town where values were bound to rise. The purchase of this required the total savings of the dentist, but he bought it. Soon afterwards, an adjoining plot came into the market, and this he wished also to acquire, but lacked the capital. Here the young wife suggested that they should sell off their furniture, for which they could secure a much higher price than it had cost in England, give up their house, and go into lodgings. This was done, a good profit being realised on the sale, and the new plot bought. So, for a year or two the young man went on increasing his property as he was able, from the profits of his profession. In the course of six years, the land he had thus acquired had not only increased substantially in value, but being let out for building purposes, provided him with an income which enabled him to retire to a beautiful home and small estate near London. This is no fairy tale of a land vender, but a brief record of fact, the beginning of which does not date back more than fifteen years.

The tales of fortunes made by the purchase of land in Buenos Ayres during comparatively recent years, which one heard on all hands, were bewildering in the dazzling possibilities they held out for “getting rich quick.” I was shown properties that in ten or fifteen years had not merely doubled in value, but had increased from five to tenfold. One particular site I remember near Recoleta, which had been valued at about $30,000, on the occasion of the owner’s death in 1907, was sold in 1912 for upwards of $200,000. The secretary of an important mortgage company, that rigidly refrained from all speculation, mentioned to me several instances in which his company had foreclosed and sold off properties to recover its mortgages, where, had it bought the property at its auction price, it would, in the course of a very few years, as events proved, have earned upwards of 500 per cent. on the capital invested.

With all these alluring facts before me, and with every opportunity to acquire Argentine land and wait for it to treble or quintuple its value, I own not one square inch—not even an 8 per cent. or 10 per cent. mortgage, which I was told was as easy to acquire as a 4½ per cent. mortgage in England! But, acting on the most reliable “inside information,” I did become the owner of a considerable number of Argentine railway shares, and at the time of writing I have the pain of seeing these being sold on the London Stock Exchange at 30 per cent. less than I paid for them. This reminds me, by the way, that an old English lady whom I met in Buenos Ayres, on a business visit to the city, had brought with her some hundreds of pounds to invest in Argentine railways. She was much surprised, and not a little disappointed, when I advised her to take her money back to London, where the shares could be purchased to better advantage. From bitter personal experience, I can state that on all financial matters affecting English investments in South America, a London stockbroker can give one better information than can be obtained “on the spot.” The Stock Exchange of Buenos Ayres I found ridiculously ignorant of possibilities in respect to shares of Argentine enterprises whose registered offices are in London. Thus the investor in Argentine public companies controlled from London can do a great deal better if he lives in Hampstead than if he lived in Belgrano.

On the other hand, investment in mortgages and the purchase of land can only be satisfactorily transacted by those who are resident in the country or have secured a thoroughly reliable person to hold their power of attorney. That fortunes are still to be made in land purchase, and that splendid incomes are being derived from mortgages, are facts that cannot be disputed, but the nonsense that gets into print in American and English journals about lucrative investments to be secured by the simple act of sending out your check and receiving in return fat half-yearly dividends, is of the most reprehensible character. Some one sent to me an English daily paper with an article entitled “A Safe Eight Per Cent. Argentine Investment.” On the face of it, all looked in perfect order, but on careful analysis, the 8 per cent. dwindled to 6 per cent., after allowing for bank collection charges and the fluctuations of exchange, and the investment was in nowise “gilt-edged.”

It may be possible to get from 8 per cent. to 10 per cent. on a mortgage on agricultural land in the Argentine, but if the mortgagor is resident in the United States or in England, by the time he has met a variety of charges for the collection of said interest, the return beyond what would have been obtainable from the same money invested in a home industrial concern, is not likely to reach an extra 2 per cent. More, there are all sorts of little difficulties and peculiar customs to be noted in connection with Argentine mortgages. For instance, a mortgage that is continued beyond eight years may become illegal, and repayment be a matter for the discretion of the mortgagee! It is thus a common custom to effect a mortgage for five years, with a clause providing that it may be re-inscribed by the judge for a further period at the end of three years. An important consideration is the provision that the mortgaged land shall not be rented for a period longer than the duration of the mortgage. And in every instance, no matter where the mortgagee may reside, or even if his land be a thousand miles distant from the federal capital, he should give an address in Buenos Ayres, as otherwise any question of legal difficulty is intensified to the point of impossibility. I have already hinted sufficiently at the difficulties of securing justice in Argentine Courts, but the absentee mortgagor who becomes involved in any legal question with a native, resident remote from the capital, and has not provided for the right to sue that native in the federal capital, may as well give up hope of securing satisfaction, no matter how patent his rights may be. There are many other difficulties in the handling of mortgages which arise to cloud over the bright prospect of investing one’s capital in that way and so deriving a snug income to keep one in comfort at home.

Nor is it all that fancy paints it to be owner of land in the Argentine. Several persons of my acquaintance are in that supposedly enviable position. In one case a lady is receiving upwards of $10,000 a year from a piece of property, exactly the same as her sister ten or twelve years ago sold for a sum that does not yield her $1000 per annum in a 5 per cent. investment. This lady is one of the fortunate. A gentleman owning a far larger property has had to spend as much as eighteen months of his time at a stretch in the Argentine trying to let it to advantage, and has suffered all sorts of losses from bad tenants. Yet the gentleman in question is a well-known authority on Argentine land, and in his time must have bought and sold property aggregating many millions of pesos. He is now resident in England, and if anybody goes to him for advice about investing money in Argentine land (except as a shareholder in a land-investment company), he will pronounce an emphatic “Don’t.”

During my stay, there was every evidence of a coming “slump” and since I left it has come with a vengeance. Old-established firms which hitherto had enjoyed the highest reputation for stability have gone bankrupt in dozens. This was entirely to be expected; was inevitable. I have already given sufficient reasons to show why the country must from time to time pass through financial crises; that of 1913-14 is no more than a momentary pause in its onward progress. It has been largely influenced by conditions of universal depression, for in the world of finance, even more obviously than in that of humanity, “We are every one members one of another,” in the Pauline phrase. The Argentine, whose development has depended entirely upon European faith in its possibilities, whereby colossal sums of European capital have been placed at its disposal, has suffered from a sudden tightening of the European purse strings. It is like a young, go-ahead business, which has gone ahead a trifle too fast for its financial resources, and, unless it can raise some fresh capital, is in imminent danger of bankruptcy. Thoroughly sound at bottom, nothing can well stay the progress of the Argentine, and the millions of European gold that have been poured into it have served to create new sources of wealth, whose ultimate increase an hundredfold is as certain as most things mundane.

Apart from natural risks, such as failure of crops from drought, excessive rains, or locusts, destruction of cattle and sheep in millions from protracted periods of heat, there is another danger to which the Argentine is peculiarly exposed. That is the lack of a settled policy in agriculture and cattle-raising. So many of the estancieros are still experimentalists, that they are apt to show a certain affinity with their sheep in following the mode of the moment rather than in maintaining an individual and well-conceived working policy for their lands. From all that I could gather, the country is essentially one for stock-raising. In the early colonial days, so stupendous were the herds of wild cattle roaming the plains, that settlers were permitted to possess themselves of three thousand head—but not more! This will indicate how cattle may multiply on these sunny plains.

It is doubtful if there is in all the world a similar territory so admirably adapted for stock-raising, and on its live-stock its modern prosperity has been based. But, not content with the profits derived from this great business, estancieros during more recent years have turned their attention to agriculture rather than to cattle-raising. The reason for this entails but little searching. Provided huge crops of grain may be secured from land which else were pasturage, the relative profits are vastly greater. Hence it became the fashion to devote more attention to agriculture and less to cattle. With what result? The most deplorable. During 1912 and 1913, the public press was voicing the national alarm at the tremendous decline in _ganadería_. In such wise was the supply of cattle shrinking that large numbers of cows were being sent to the meat chilling establishments (_frigoríficos_) to fulfil contracts. The destined mothers of future herds were being slaughtered. The Argentine, whose supplies of cattle ought to be without limit, was actually in 1913 importing live-stock from the neighbouring Republic of Chili, where the cattle industry is comparatively in its infancy!

Here is a state of things that might well spell disaster. It is primarily the result of the imitative habit in following a new craze, and the lack of an established policy.

If alongside of this declining activity in stock-raising there were an enormous countervailing increase in agriculture, there would be no occasion for criticism. But owing to the uncertainty of the seasons, agriculture must remain in the Argentine—at least until “dry farming” has been perfected—a more speculative industry than cattle. Government has recently taken measures to establish the North American dry farming, and this may go some way to insure the agriculturist against seasonal conditions which at present make him a highly nervous observer of the barometer. Even so, and admitting that the agricultural possibilities of the country to be enormous, its essential industry, that which nature seems to have marked out for it, is cattle-raising. So, after some four or five years of crop failures, and faced with a scarcity of animals, estancieros are again feverishly turning their attention to live-stock. The imminent danger is that in making haste to recover their pre-eminence in cattle-raising, they may undo something of the progress they have made in agriculture. And so they see-saw from policy to policy. This is bad, and so long as it continues we shall see these periodic panics. A more settled system is bound to emerge, more individualised, and based upon a nicer appreciation of local conditions, for the climate differs throughout the Argentine as widely as it does between the South of Spain and Siberia.

The future prosperity of the country is not a matter of doubt to any person who has travelled across its fertile plains, but all Argentine prosperity, whether of to-day or to-morrow must rest upon agriculture and cattle-raising, the latter, perhaps, bearing the greater proportion. Here lies its limitation. He is no true friend of the Republic who paints highly coloured pictures of a coming day when workshops in the great cities will hum with myriad crafts, and industries flourish as we see them now in the great industrial centres of the Old World and the United States. The mechanical arts and sciences will be relegated to a very humble position in the Argentine activities of the future, as they are in its industrial life to-day. You cannot make bricks without straw, nor can you work machinery without power. If the Andes were made of solid coal, still would the progress of the Argentine be slow in the textile and mechanical industries. It would cost more to carry the coal to the Atlantic seaboard, where the industries must needs have their centres, than it now does to bring coal thither from England to-day. But there is no reason for supposing that the Andes contain coal in any considerable quantities, while we do know that the only coal beds at present being worked on the Chilian side with some degree of success produce coal of so inferior a kind that it is only useful for mixing with imported coal.

Already I have had occasion to point out these limitations, and here I do no more than reassert that in my opinion the future of the Argentine is indissolubly bound up with the proper adjustment of its two great national industries. Nature has intended it to rear cattle almost without limit, and to produce grain for the teeming populations of Europe, and it never pays to fight against nature. It may be that some day rich gold deposits shall be discovered in still unexplored corners of the Andes, where we know that copper, tin, and silver are to be found in abundance. But in these things there is no permanence. For a generation or two, gold discoveries might modify a country’s progress, and might eventually do a great deal more harm than good, as it is to be feared the rich nitrate fields, of Chili will yet do to the sister republic. The real gold is the fruitful soil, and this is the Argentine’s ample dowry.

The future of a country, however, is not merely a question of commercial possibilities. In treating of all new and essentially commercial countries, the tendency is to forget that there are other factors to be taken into consideration. The immediate past of the Argentine had very little to do with commerce. Its history is little but a story of more or less sanguinary squabbles between political parties, or the struggles of individuals to secure a temporary ascendency over the mass. It is really not an inspiring story, the political development of the Argentine, or of any South American Republic. It has its great moments, but they are few compared with the long unedifying periods of petty bickerings. All that, the Argentine put behind it when it suddenly awakened to the fact that if it behaved itself it could secure substantial loans of European money wherewith to develop its resources and so enrich its citizens. The revolutionary era is past, not entirely because the spirit that informed it has disappeared, but because other considerations of personal prosperity are now involved in any movement that would tend to discourage the faith of foreign financiers in the country’s future. The energy which found expression in the days of revolution has not ceased to exist, but has suffered a change and, transformed, it is at work in the political world of to-day, either for good or for evil. On the whole, I think for good, if I have read the signs of the times correctly in my endeavour to define “the spirit of the country.”

Only the youthful jingos foresee for the Argentine an imperial era, with the country lording it over heaven knows what other countries of old Earth. The sane and stable mind of the nation is set upon the development of sound nationalism, the welding of the whole cosmopolitan population into a composite people. Such dangers as beset it are very similar in kind and degree to those that vex European politics—international jealousies. Brazil and Argentina do not understand each other any better than Britain and Germany; and probably less. When in April 1912, ex-President Roca went as Argentine Ambassador to Brazil, and ex-President Campos Salles as Brazilian Ambassador to the Argentine, there seemed to be a wiping out of old jealousies, but these will only completely disappear with increase of intercourse between the two republics, and conditions are not markedly favourable to that, as a curious feature of the political life of these Latin-American peoples is that all maintain a more direct intercourse with the Old World than with one another.

Although the Argentines under San Martín helped the Chilians to throw off the Spanish yoke, there lingers something of old rivalry and distrust between the two nations, notwithstanding such diplomatic courtesies as each government presenting the other with a fine house for its embassy in their respective capitals. Peru and Chili, too, while making much parade of cordial relationships, are still existing in a state of veiled enmity. In fine, South American politics are just as full of international jealousies and complications as those of Europe, and the Argentine, as the most progressive of these powers, must depend upon her strength and preparedness for the maintenance of her position among them. The Christ of the Andes, that giant statue on the Cordillera frontier of the two republics, is a pious expression of the hope that Chili and the Argentine may never go to war again, but we know that these pious expressions are no more binding than inconvenient treaties. Hence the question of armaments is an important one with most of the republics—with Chili probably most of all, but only in a lesser degree at present with the Argentine.

There is another reason for this, and one which in Europe is little understood. The North American menace. While the Monroe doctrine is not entirely despised among the Latin Republics, the Drago doctrine, formulated by the great jurisconsult of Buenos Ayres, which asserts the independence of their nationalities and maintains the principle that no power by force of arms may impose itself upon any of them, is much more acceptable to Latin America. The Republic of the United States, comparatively little known, and exercising very small influence throughout South America, is looked upon with increasing suspicion. The making of the Panama Canal, instead of appealing to South Americans as a great new factor in their economic lives, is viewed in many quarters as the first step towards attacking their existence as independent nations. The United States are suspected of an aggressive policy towards the South, and with such diplomatists as Mr. Theodore Roosevelt publicly stating at Rio that the United States, in alliance with Brazil, could dominate the whole western hemisphere, the road to a better understanding is not made unnecessarily smooth.

The great protagonist of the “anti-Yankee” movement, which is steadily gaining ground throughout all the republics, is a Buenos Ayres gentleman of some local celebrity as a litterateur, Dr. Manuel Ugarte. He has stumped the whole of South America, and everywhere he has been received with open arms. As a prophet, he warns the nations of the danger that threatens in the North; he sees in the Panama Canal an instrument deliberately prepared by the United States, not so much for her own commercial expansion, but the better to impose _yanqui_ authority on the Southern Continent. He has no difficulty in making out an excellent case, as he need do no more than quote from some of the ravings of those American senators who publicly talk of “one flag from Pole to Pole and from Ocean to Ocean.” A South American politician may be excused if he does not readily discriminate between such insensate bombast and the saner United States opinion which realises very well the impossibility of bringing the mighty Southern Continent into the Union, and knows what a handful the little Philippine Islands have proved. The excuse for such agitators as Dr. Ugarte is the greater so long as Mr. Roosevelt is allowed at large to make speeches wherein he can undo in five minutes the work of years of diplomacy.

The distrust of North America is a very real thing throughout these republics, and when in the autumn of 1913 Mr. Robert Bacon, formerly American Ambassador to Paris, was engaged at considerable expense by Mr. Andrew Carnegie and sent to deliver lectures in all the South American capitals on behalf of “Universal Peace,” his mission was looked upon in most quarters with suspicion. True, he was received with much pomp and circumstance, and treated with great display of cordiality, but a metaphorical finger was laid to the national nose at his departure, and the national eye winked knowingly. As one gentleman rather cogently observed to me, when the said Mr. Bacon was present as the evangel of peace in Lima, “Why doesn’t he pack off with his lectures to Mexico just now? That’s where he might be of some service, as we’re all quite peaceful down here.” It is quite useless to endeavour to convince a South American that the United States have not as deliberately engineered the revolution in Mexico as they are supposed to have done that quaint little affair in Panama.

This of the future is certain—that the surest way to produce an alliance of all the South American powers, in which their national differences would for the time vanish and the whole join together as one great nation, would be for the United States to pursue a policy of aggression in respect to any single one of them. To an extent little appreciated either in North America or in Europe, these South American republics have each their racial distinctions, and in all there is an intense feeling of nationality, which, rather than diminishing, is steadily growing, and is the object of the most assiduous cultivation on the part of the leaders of the people. But the Drago doctrine is vital to their national destinies and the very reasons that make them district entities would unite them as a whole to confront a common enemy.

In the development of South America, the Argentine has an important rôle to play, and as that country has been the pioneer in putting a stop to the old foolish era of revolutions and internecine strife, turning towards Europe not only for ideals of political advancement, but for that material help which at once places the country under an obligation and calls forth its own best energy, and is the best pledge of peaceful intentions, it is safe to assume that, despite such temporary set-backs as the commercial crisis through which it is passing as these lines are being penned, the Argentine will maintain undismayed her political and commercial expansion to splendid issue.