Travel Reference
In-Depth Information
in manufacturing, foreign investment only in the export and food-
processing industries, government indifference toward industrial devel-
opment, lack of political influence among immigrant manufacturers,
and competition from the import of foreign consumer goods. These
characteristics are accurate, yet Argentine industry did make impressive
gains, as the yearly growth rate of 9.3 percent attested.
Argentina participated in the prevailing trends of the world economy
and profited greatly from its changing structure. Falling prices, espe-
cially for foodstuffs, characterized the European economy from 1873 to
1898, an era of peace and low interest rates, which facilitated, in par-
ticular, British investment in technological innovations such as railway
construction and steam-powered and steel-hulled shipping. At the same
time, the British population increased, and per capita food consump-
tion also surged. Here was a market for cheap Argentine foodstuffs.
The Argentine state responded to the international market by
vigorously promoting the construction of a national railway system
and designed its economic policies in order to attract foreign capital
in building and operating the railways. In 1862, the government of
President Mitre had granted land and stations to foreign entrepreneurs,
offered incorporated status in Argentina to foreign companies, and
insured them against governmental expropriation. He also guaranteed
investors an annual profit rate of 7 percent. Before too long, however,
these guaranteed payments came to be a leading budgetary item and
even led to scandalous abuses in the late 1880s. Corrupt friends of the
liberal politicians often constructed duplicate railroad lines and laid
poorly planned track just to collect the guaranteed profits from the
government. Of the 28 separate railway companies registered by 1892,
most were barely solvent.
Government promotion of rail construction was effective, nonethe-
less. By 1880, almost 61 million gold pesos (the equivalent of approxi-
mately $61 million, or £12.5 million) had been invested in some 1,360
miles of track in Argentina. Railway investments increased by 150 per-
cent from 1900 to 1914, while trackage rose to 21,390 miles. Freight
tonnage and the number of passengers carried by Argentine railroads
increased impressively (see table). Cultivation of cereal crops on the
Pampas, a negligible commercial activity in the 1870s, developed
relative to the extension of rail lines. Rail freight also included greater
amounts of livestock, manufactured goods, and construction materials.
Argentina had become the leading railway country in Latin America.
Railway construction was not the only sector in which foreign—
and domestic—investors placed their capital. Resources flowed into
