Travel Reference
In-Depth Information
Economic nationalism continued its upward trajectory in the 1930s,
and the international oil firms remained targets because the national-
ists suspected that Standard Oil and Shell meddled in domestic poli-
tics and fomented war. Many Radicals, for example, claimed that the
oil companies bribed the Argentine military to overthrow President
Yrigoyen in 1930. Other nationalists charged the oil companies with
promoting the Chaco War of 1932-35 between Bolivia and Paraguay
as a method of competing for oil resources. Standard Oil supposedly
supported Bolivia while Shell backed Paraguay. (Over time, the Chaco
region has not proved productive, however, and no one has been able
to prove the conspiracy of the oil companies.) Argentine foreign minis-
ter Carlos Saavedra Lamas helped negotiate the peace treaty ending the
Chaco War and consequently won the Nobel Peace Prize.
The state-run oil company YPF's production expanded enough dur-
ing the 1930s to reduce dependency on oil imports. In 1930, Argentina
had imported more than 58 percent of its petroleum. Within 10 years,
that number had dropped to 37 percent. The combined production
of Shell and Standard doubled during the 1930s, but YPF's growth
as producer was more spectacular. In 1934, problems arose between
YPF and the private companies. Just as YPF attempted to expand its
marketing in Buenos Aires, the companies lowered retail prices. There
was a nationalist outcry, and critics accused the international trusts of
“dumping” in Argentina in order to destroy YPF.
The government in 1936 decreed that YPF henceforward would con-
trol all oil imports and distribute them as it saw it. But President Justo
did not wish to antagonize the British, whose market for imported
wheat and beef partially supported Argentina's economic recovery.
In 1937, the government rescinded its oil import controls. Instead, it
reached a market-sharing agreement between YPF, Shell, and Standard
Oil that lasted for a decade. The companies conceded half the Buenos
Aires market to YPF. The expansion of the oil industry, in the mean-
time, was stimulating industrial modernization in the country.
As the oil industry expanded, the railways reached a period of stag-
nation and outright decline in services and profits. Freight transpor-
tation in the 1930s fell by one-quarter, and railway profits, by nearly
one-half. Burgeoning road construction and growing motor transport
diverted cargo and forced the British-owned railways to reduce their
own rates. Perhaps the companies could have remained competitive
by modernizing operating equipment and adopting new technology,
but the British managers completely suspended capital investment in
