Travel Reference
In-Depth Information
took charge of assembling pastoral goods for export. Some foreign
entrepreneurs succeeded in investing in rural production, particularly
in introducing European sheep breeding to the Pampas.
The Limits of Foreign Investment
Foreign investment had severe limits, however. Domestic transporta-
tion, retailing, processing, ranching, and farming expanded on relatively
modest investments by Creoles and immigrants. Economic expansion in
Buenos Aires justified investments of no grander scale, a lesson foreign
investors soon learned. In 1824, a London investment bank, the House
of Baring, floated a bond issue for £1 million, backed by the Rivadavia
government. Politicians soon misappropriated the loan for the war
against Brazil, and their successors saw little advantage even in paying
the interest. It marked the first time that Argentina defaulted on foreign
loans. Meanwhile, foreigners residing in the port and several
porteño
s
attempted to establish an investment bank in Argentina, the Banco de
la Provincia de Buenos Aires. They responded to a European mania
for reviving the old silver mines of the Andean region. Speculators in
London invested heavily in two mining enterprises for the region, both
of which collapsed in the 1826 financial panic. Soon thereafter, the
Banco de la Provincia turned to issuing paper money, which quickly
lost value and set off an inflationary spiral in Argentina. This financial
debacle in the mid-1820s discouraged future international investment
and restricted foreign management to the import-export trade, a few
shops, and sheep ranches.
Foreign trade through the port of Buenos Aires periodically fell off
as a result of four naval blockades by foreign powers within the first
40 years of independence. A squadron of the Spanish navy, stationed
at Montevideo, maintained a blockade of Buenos Aires from 1811 to
1816. In the war over the Banda Oriental, a Brazilian fleet invested the
port in 1827 and 1828. Ten years later, the French blockaded Buenos
Aires. The British fleet enforced the final blockade, that of 1845-48,
attempting to force the provincial government to open the Paraná River
to international shipping. None of these blockades succeeded well. The
Yankee shippers took pleasure at slipping through them. “American
vessels were weekly running past, breaking the blockade, and mak-
ing fortunes for their owners,” observed one foreign merchant, “while
scarce an English one made the attempt” (Brand 1828, 34). Trade con-
tinued despite the diplomatic disagreements that accompanied political
