In dealing with this subject it will be necessary to make use of a considerable number of statistics, for there is no other way by which to express the unprecedented development of this great Republic. Her genial climate, her fertile soil, her vast waterways, potent alike to fertilise the country and bring produce to the sea, and now her unequalled railways and excellent docks, have caused the trade of Argentina to be surprisingly large in proportion to her population, and, unfortunately, wealth seems likely to multiply more rapidly than men. As has been said before, the importance of Argentina as a world State is purely industrial and commercial; her politics, literature, and people are interesting, but they still belong to the day of small things. Her exports of wheat and pastoral products, her railway share list and her bonds are scrutinised eagerly at every commercial centre, and Buenos Aires is an increasingly important member of the delicate system of international commerce.

In 1908[106] the imports were £54,594,547.
" exports " 73,201,068.[107]

The principal items of import were as follows:—

It is clear from this table that Argentina still relies on the foreigner for most of her manufactures. Her policy of high Protection has not yet enabled her to produce high-class goods, but it would be rash to say that success will never come, when we consider the position of the United States and the enormous advantage which an industrial start of some fifty years gives a country. The imports show a decline from the previous year of some two and a half million sterling, doubtless in sympathy with the prevailing depression, and the principal importing countries all sent slightly smaller quantities. Of the imports England has 34·2 per cent., Germany 13·9, the United States 13·2. The figures are:[211]
[212]—

A remarkable feature in the history of Argentine trade returns is the enormous advance of Germany. In 1874 she sent to Argentina £160,000, in 1882, £920,000. England's figures for those two years are £1,040,000 and £1,480,000. Those of the United States are £380,000 and £580,000. But it should also be remarked that the advance of our own country has been even more rapid, and here, as elsewhere, the absurdity is demonstrated of those who declare that English trade is vanishing. Everything has been done to write down England and to write up Germany, and at the end of it all John Bull can beat Germany with one hand, the United States with the other, and has still an ample margin of strength to beat Belgium as well. We are handsomely above the Two Power standard in the Plate district. France makes steady progress, and Italy shows a large increase, as is only to be expected, because the emigration from Italy has long been very large. It may be added that French goods make their way by sheer merit, for France has in her own land ample scope for her scanty population. Some advantage may be obtained by her as the head of the Latin race, but wherever there are women and luxury there will French trade flourish, and further, in machinery of many kinds France, if equalled by any other nation for excellence, is equalled by England alone.

It is very interesting to see how Argentina has passed from small to great things in matters of trade.

The following table shows in round figures her progress during a space of more than a hundred years. They refer to her total foreign trade.

Thus, in eight years, the foreign trade has far more than doubled. In former days the results of feverish development were by no means an unmixed benefit. Immense sums had been invested in railways and other enterprises, and the Mortgage Bank of the Province of Buenos Aires recklessly lent money upon land and credit was inflated. Everybody thought that unbounded riches were either in their possession or within reach, and the inevitable collapse followed. The difficulties were aggravated by the fluctuating state of the currency. At present the paper dollar circulates with a tolerably steady value of about 1s. 9d. There is a scheme for establishing a gold currency, and the gold held by the Conversion Office amounts to 132,769,134 dollars gold. The note circulation is over 500,000,000 dollars paper. In December, 1891, the Banco de La Nacion Argentina was opened with a capital of 50,000,000 dollars, now increased to 90,000,000. The Bank may lend money to the National Government, but the total amount is not to exceed 6,000,000 dollars, and it has no authority to place loans in other quarters.

The exports now demand our consideration. In 1908 the main items were:—

A more detailed investigation of the figures shows that of wheat 3,636,294 tons were exported, of maize 1,711,804, of linseed 1,055,650, of oats 440,041. The shipments of wool were 175,538 tons, of frozen beef 180,915, of jerked beef 6,650. Quebracho wood stood at 254,571 tons, quebracho at 48,162, and hay at 32,078. Hides were largely exported.

For 1908 the following is the percentage of imports received by various countries: England, 21·4; Belgium, 9·8; Germany 9·5; France, 7·9; Brazil, 4·1; United States, 3·6.

The following table shows our reciprocal trade with Argentina in 1907[108]:—

The various industries of this Republic, which supply the materials for the rapidly increasing commerce, are dealt with in other chapters. Buenos Aires from very early times has had a brisk trade. Even in the seventeenth century the traffic in hides excited the admiration of travellers, and at the end of the eighteenth century the new and liberal commercial policy pursued by the Home Government resulted in a promising development which was roughly checked by the Revolution. From 1825 to 1842 the foreign trade per inhabitant positively diminished, and by 1850 it was only £4 8s. per head as against £3 12s. in 1795. Now it is some £20. Obviously the slow progress after the Revolution was due to the sinister tyranny of Rosas, which stifled the development of communications and all other progress. A traveller,[109] who visited the Pampas in 1848, says: "The soil is good for agriculture, yet flour is either imported from the United States, or obtained from the northern provinces; and its price is enhanced by the cost of land-carriage several hundred miles." He concludes his interesting work with these words[110]: "But while our own colonies of Australia and New Zealand offer such rich and boundless fields for the profitable employment of capital among our own countrymen, there is less inducement than ever for merchants to risk their capital and energies amongst a race of people where the wealth of nature is wasted by the combined operation of ignorance, unstable government, and interminable warfare."

Very different has been Argentina's commercial history for the last sixty years, and the only check was afforded by the Celman crash. Now[111] "the producing capacity of the country is steadily increasing, and in cereal production its status is evidenced by the fact that as a corn [i.e., maize] exporter the Argentine Republic took first rank in 1908, occupying the place formerly held by the United States. In the production[112] of this foodstuff the country ranks third, and as a wheat-grower fifth. It is first as an exporter of frozen meat, and second as a shipper of wool. In the number of its cattle the Republic holds third place among the nations, being ranked by India and the United States. Russia and the United States exceed it in number of horses, and Australia alone has a greater number of sheep."

As a complement to this description of the commerce, a few words should be said about the industries which directly nourish it. Elsewhere will be found an account of the foreign steamship lines which connect Argentina with the outer world.[113] Here it is necessary to give the figures of her modest mercantile marine as far as they can be ascertained:—

It has already been said that the Argentines are not a seafaring nation, but no doubt, in course of time, the exigencies of national defence and the growth of her trade will turn the energies of her people to the sea.

There are in Argentina four banks with their offices in London. First comes the London and River Plate Bank, which was the only one of the four doing business in the country at the time of the Celman catastrophes, and this British Bank was the only banking firm of any description that weathered the storm. It has branches in Buenos Aires, Rosario, Mendoza, Concordia, Bahia Blanca, and Barracas. The other three, though younger, are sound and prosperous. The Anglo-South American Bank (formerly Tarapaca) has branches in Buenos Aires, Mendoza, and Bahia Blanca. The British Bank of South America has branches in Buenos Aires and Rosario, and the same is the case with the London and Brazilian Bank. There are, of course, many foreign and Argentine banks, and of these the Spanish River Plate Bank is said to be the best. It was recently stated that the United States does not possess a single bank in the whole of South America.

The financial position of the Republic may be briefly stated. It is generally believed that the fiscal management is somewhat wasteful, and the competence of Congress to produce a satisfactory budget is questioned. Men of eminent business ability are, of course, found in the pursuits that make wealth rather than in Congress. But the finances are flourishing, as the following figures[114] will show:—

ESTIMATES FOR 1909.

Below are given the figures since 1903:—

In conclusion, the important subject of tariffs demands notice. The Republic has long adopted a highly protective fiscal policy. The object is to create as many industries as possible, and therefore to discourage foreign competition by the imposition of heavy duties. The high cost of living is usually attributed to this system, and undoubtedly many articles would be cheaper if the tariff was lower; but its effect is probably exaggerated, and even under complete Free Trade Argentina would still be a dear country. It is the comparative lack of development and enterprise, and also the unwillingness to take trouble over small things, which are the main causes of dearness; and this is the characteristic of all new countries. That Protection is unpopular it would be rash to affirm. It is the direct imposts, and above all the municipal, that give rise to complaining in the streets. The immigrants come from highly protected countries, and are accustomed to heavy indirect taxes; they would, in all probability, angrily resent direct taxation, even if it were much lower than the present scale of imposts. As the table above shows, the customs are the sheet-anchor of the Exchequer, and Ministers could not possibly dispense with them, nor would manufacturers hear of such a thing. "Every one," says an experienced resident in Buenos Aires, "as soon as he starts a business, looks about for higher tariffs in his line."

A good many among the intellectual classes have academic leanings towards Free Trade, and the opinion is sometimes expressed that in the end the Government would raise more revenue by a general duty of about 20 per cent. But the manufacturing interest, which already complains that it cannot compete with English and French goods, is an insuperable obstacle.

The accomplished Dr. Martin Garcia MÉrou remarks: "The situation of the United States is unique in the world. The amazing prosperity of this country is based upon the producing and consuming power of her forty-five independent States, which stretch over an immense continent, and of which some differ in climate and conditions as widely as Spain differs from Norway, but they all have a single system of land and river communication which is without rival and without precedent. The absence of fiscal barriers between those different States is the permanent and fruitful cause of their greatness and prosperity. In this manner a country, which is apparently the most Protectionist in the world, is the very one which demonstrates in the most practical and visible fashion the incalculable benefits of free commerce."

This conviction is gaining ground, and there are many persons, intimately conversant with trade and industry, who wish for changes in a liberal direction. SeÑor Ricardo Pillado, the able chief of the Agricultural Department, has penned many minutes urging a reduction of tariffs, but it is doubtful whether the opinions of a few men, however accomplished, will ever penetrate among an ill-informed population; and even if their views were understood it is most unlikely that they would have power to eradicate the ingrained protective opinions of the masses and to create a feeling among them powerful enough to overcome the resistance of vast interests whose policy is now in complete accord with the feelings of the masses.

SeÑor Pillado says[115]: "For a considerable number of years Protection has been a heavy obstacle to the progress and expansion of our country. Most sincerely do I declare that we all ought to use our utmost efforts to reform a financial system which is grounded in such fundamental errors as protective tariffs."

It was in 1883 that the Republic first decided upon Protection. By the tariff of 1884 a duty of 50 per cent. was imposed upon arms, powder, alcohol, cards, perfumery, tobacco, snuff, and wax matches. A duty of 40 per cent. was imposed upon clothing, hats, shoes, harness, carriages, furniture, rockets, and wooden matches. Many articles necessary to production, such as coal, thread, ploughs, wire, agricultural machinery, printing presses, books, sacking, steam engines, iron, lumber, rock-salt, and paper, were taxed only 5 or 10 per cent. Similar articles, which were even less likely to be produced at home or were still more urgently needed as the raw material of industry, were admitted free. Among these were machinery for factories or shipping, live cattle or fish, plants, seeds, railway material, metal pipes of at least 30 inches diameter, blasting powder, and sheep-wash. It will be seen, therefore, that an attempt at a scientific tariff was made, and it has proved so acceptable to the Argentines that it has been greatly elaborated and extended. Nor does the nominal figure of the duty represent the whole of the increased cost, for the customs officials are required to add to the declared value of the articles the freight and other expenses, and to raise the duty in proportion. Consequently the imposts are subject to large and arbitrary enhancements. The following summary will give a rough notion of the present fiscal system:—

Free.—Most industrial materials, such as railway, mining, or electrical plant and most kinds of machinery; also herbs and seeds. Books and magazines are free.

Five per cent. ad valorem.—Other forms of industrial material, as mercury, crude sulphur, china clay, jute, lead, &c. Several kinds of machinery. Jewellery comes under this section.

Ten per cent. ad valorem.—Various chemicals for industrial use.

Fifteen per cent. ad valorem.—Certain kinds of timber.

Twenty per cent. ad valorem.—Steel in bars, plates and sheets; tissues of unbleached cotton or coarse linen cloth.

Twenty-five per cent. ad valorem.—All articles not elsewhere specified or exempted.

Thirty per cent. ad valorem.—Tissues of wool of any kind, pure or mixed.

Thirty-five per cent. ad valorem.—Blankets, jewel cases, iron screws, bolts and nuts.

Forty per cent. ad valorem.—Most fancy articles as trunks, perfumery, furniture, boots, and many kinds of clothes.

Fifty per cent. ad valorem.—Arms and saddlery.

Comestibles are specially dealt with, usually by a duty per kilo. The intention and effect, it is needless to say, are protective—e.g., the duty on fruits in syrup is over 5d., that on bacon over 4d. per kilo, that on refined sugar, polarising over 96 degrees, is a little less than 2d., that on sugar below that grade is nearly a half-penny less. A little more than 5d. is the duty on wines per bottle, that on soda-water is the same per dozen bottles, while that on beer is over 2d. per bottle. But it must not be inferred from these figures that the kindly State does not take good care of vintners, brewers, and the like, for the system of enhancements aforesaid adds handsomely to these and all duties. The case of tobacco will illustrate this. The preliminary duties are as follows:—

But all tobacco that enters Argentina is "evaluated" at a certain sum, and then 20 per cent. ad valorem duty is charged in addition.

There is also a miscellaneous "per kilo" section, which includes matches, paper, and hats, all heavily taxed.

Export duties are insignificant.

It may be observed that the 40 per cent. section and the miscellaneous section between them include almost all the articles likely to be purchased by the ordinary shopper, and they are extremely dear. But English and French goods appear to monopolise the best shops. The following clause embodies the principle which we know as "the most favoured nation clause": "The import duties established by the present Law shall be deemed to be the minimum tariff, and shall be applicable to products and goods of all countries which apply their minimum tariff to exports from the Argentine Republic, which do not increase the previous duties, which do not establish a duty on exempted articles, which do not exceptionally reduce their present tariff for similar goods of any other origin, and which do not impede by restrictive measures the importation of Argentine products."[116]

As an example of Protection both rigorous and effective the case of sugar may be given. Not long after the first tariff of 1883 the sugar duties were enormously increased with the following effect:—

The production of sugar, which was also 24,000 tons in 1884, leaped to 75,000 in 1894. SeÑor Pillado remarks that this legislation converted Tucuman into an El Dorado. He concludes an able work by quoting the appeal which he made in his minute to the Minister of Agriculture[117]:—

"The trade of the Republic is at present in a condition thus favourable, the wealth hidden in her soil is thus great. She owes this situation to the maintenance of exterior peace, the elimination of fluctuations in paper money, and the establishment of those institutions by which she advances with gigantic strides. We watch her progress, and see her offering to the rest of the world the products of her fertile territories, without restrictions and without preferences that take their rise in grasping tariff laws. Our country thus wins a reputation which corresponds to her pastoral and agricultural wealth and the excellence of her products.

"What, sir, would be our rate of progress if the law of our custom-house, which sets up a prohibitive tariff wall against the goods which our people demand and which act as a stimulus to our great industries, were more lenient, more just, and more in accordance with the principles of liberty which we have inherited with our charter of independence!"

But, in fact, all influences of to-day seem to be on the side of further restrictions in trade as they have long been on the side of further restrictions in social matters. The principles of liberty are considered by most people as very excellent for themselves but hardly suitable to the rest of the world; but from Manchester to Shanghai the ideal of every trader is Free Trade for the whole world and Protection for himself. As all pull one way, the result is almost everywhere the same, and no country seems less likely to abandon Protection than Argentina.