W. H. Koebel

England's financial stake in Uruguay—British capital invested in the Republic—Its monetary importance compared with that of other South American nations—General commercial development of the country—A satisfactory outlook—Progress of grazing and agriculture—Marked increase in commerce—Uruguay's exports—Cured meats and frozen carcasses—Diminution of the former trade; increase of the latter—Reasons for the transformation of industry—An outcome of Brazilian protection—The breeding of fine cattle for the European markets—Present situation of the world's meat market—The British Isles as importers of meat—The position in the United States—A change from the rÔle of exporter to that of importer—The increase in River Plate shipments—Closeness of touch between South American and English markets—Probable admission of foreign meat into European countries—Intervention of the United States Beef Trust—Purchase of Frigorificos—Possible effects of a monopoly upon the producers—South American views on the subject—Favourable general position of the River Plate—The balance of power in beef—Extract of meat—The Lemco and Oxo Company—Ramifications of the enterprise—The town of Fray Bentos—Agriculture—Wheat—Maize—Barley.

The financial interest that England possesses in Uruguay is not generally realised. As a matter of fact, the amount of British capital invested in the Banda Oriental amounts to over forty-four millions of pounds sterling, and there are thus only two nations, Argentina and Brazil, that possess a greater share of the total of those funds invested in the South American continent. To the ears of the majority, it must be admitted, the names of Chile, Peru, Venezuela, and Colombia sound more familiar than that of the country with which we are at present dealing. Yet in the matter of these investments Chile alone can approach the status of the small Republic on the River Plate, and, indeed, falls behind it only to the extent of a few hundred thousand pounds. Peru, however, is interested to scarcely more than one-half of the extent, while Venezuela, the next in order, cannot lay claim to one-sixth of the amount.

A comparison such as this will show the real financial importance that Uruguay represents to England, and, such being admitted, the condition of its commerce must be a matter of proportionate interest. To deal first of all with the general commercial development of the country, the outlook is undoubtedly satisfactory. In order to obtain the broadest possible survey of the situation it is necessary to lump together the national imports and exports. Taking a recent number of five-yearly periods, the results obtained are:

The dollar quoted in this table—and wherever this unit is employed throughout the book—is, it should be explained, the Uruguayan gold dollar, the rough value of which may be estimated at four shillings and twopence.

This steady development of commerce is not a little striking in view of the fact that up to the present only a very small percentage of the resources of the country have been brought to bear. It is true that the chief national wealth is likely, in the future as in the past, to remain centred in the rich natural grazing lands. But the progress of agriculture is now such that this branch of industry cannot well fail in the course of a few years to rank as a moderate second in importance to the business of grazing. Moreover, the development of this latter itself is only now being proceeded with in a manner worthy of the great resources that exist. The marked increase in the general commerce that is evident between the years 1899 and 1908 is due to a very large extent to the introduction of modern methods into the estancia life of the country.

It is necessary now to turn to a more detailed consideration of Uruguay's exports. The chief of these, as has already been explained, is represented by live stock, and by meat in various forms. Of recent years these particular branches of industry have been undergoing a certain amount of transformation. For generations, indeed for centuries, Uruguay has represented the chief source of Brazil's supply of animal food. Not only were the herds of cattle and flocks of sheep driven northwards with ceaseless regularity across the frontier, but the millions of bales of dried beef flowed along the same channels too.

Recent events have caused a certain diminution in this commerce. With the course of time Brazil has become more and more desirous of seeing her own southern and comparatively temperate provinces more liberally stocked with cattle. With the idea of fostering the local grazing industry, the northern republic has increased the duties upon both imported cattle and meat. The immediate result naturally proved unfavourable both to Uruguayan graziers and saladero owners. In the end, however, the outcome has proved beneficial rather than detrimental to the landowner. As may be imagined, for the manufacture of tasajo a high grade of cattle is not necessarily required. The secret of the actual quality of the meat is to a great extent lost in the dried and hardened bales of the preserve. Moreover, in order to suit the taste of local consumption in Brazil a far slenderer class of animal was necessary than the fattened type that the colder climates demand.

Thus, when it became necessary to make up for the deficit in these neighbourly exports by the opening up of fresh markets and by catering for the overseas demand, one of the first means to be taken in hand towards attaining this end was a yet more close attention to the question of a quality of meat suitable for European consumption. There were many who foresaw numerous difficulties in attaining to this standard, principally owing to the comparative absence of alfalfa in the land. It is true that this fattening lucerne thrives only in limited areas of Uruguay. But to what extent the excellent pastures of the land have made up for this disadvantage is plain enough from the amount of frozen carcasses now shipped to Europe. The situation as regards the export of pastoral products has, in consequence, become improved. Less dried meat and fewer live cattle are sent to Brazil, but the deficiency is more than counterbalanced by shipments of a superior order to the new markets now established in Europe.

The present situation of the meat markets throughout the world has reached so vitally important a stage that a few comments on the position cannot well come amiss in view of its inevitable direct influences upon Uruguay, and the similar stock-raising countries. Naturally enough, the primary centres of interest are to be found in the United States, and in its Beef Trust. Ere coming to this point, however, it would be as well to review the general situation.

Until the present moment the British Isles have been the chief importers of frozen and chilled meat from both North and South America. The demand has, naturally enough, shown an annual increase corresponding with the growth of the population. A similar state of affairs has, of course, existed in North America, but here the increase of the inhabitants has been so rapid and so overwhelming that the breeding of cattle has been entirely unable to progress in the same ratio. The result of this is that the United States can now produce only a comparatively insignificant surplus over and above the quantity of animal food that is required for consumption by its own inhabitants. Of late, therefore, the shipments of North American beef to the British Isles have decreased with a rather startling celerity, and there can be no question that in the near future the trade will have ceased altogether. Exactly when this will occur—whether in two years or half a dozen—it is impossible for even the experts to tell, since so many elements of the unexpected enter into the question. But that it will come about is certain, and it is, of course, equally inevitable that the conclusion of the period of exportation will mark the beginning of another era when it will be necessary for the United States to import her animal food supply from countries outside her own frontiers.

In the meanwhile Argentina has stepped into the gap that North America had of necessity left vacant, and the establishment of its frigorifico will now enable Uruguay to take a hand in this business of shipping. The River Plate countries are undoubtedly in a position to cope with the situation for an indefinite period of years, although its effects are already evident to a certain extent upon the local markets of Argentina. In the latter country I have been present at the stockyards in November when the herds of cattle that had arrived from the Campo were being sold. The faces of those estancieros who were present were beaming, for prices were ruling quite exceptionally high. The reason lay in the demand for the London Christmas beef that had sent its stimulus all this distance—an emphatic proof of the closeness of touch that now obtains between the River Plate and the British Isles.

Were the position to begin and end at this point it would be simple enough. Some developments, however, have occurred of late that render the outlook for the future far more complicated. There seems very little doubt that the time will come when England will no longer enjoy the practical monopoly of imported beef. The desire for the admission of this commodity in several of the great European countries is becoming more and more accentuated, and it is highly probable that the agitation that is now being carried on in favour of this new departure will eventually result in the breaking down of the barriers that at present oppose the trade. It is, of course, impossible to estimate the full extent of the consequences of a move of the kind, but that it must cause a rise in the price of beef in the English markets is inevitable.

In the face of these possibilities the prospects of the River Plate countries are, of course, more favourable than ever before. With the markets of Europe open to their cattle and meat, the added stimulus to the industries of these countries cannot fail to be enormous. But here again an element has come into being that, although it will have no effect upon the industry, taken as a whole, must necessarily threaten many of the interests involved. The Beef Trust of the United States has been keenly alive to the great pastoral developments in South America. Accurately foreseeing that the importance of the present day is merely a prelude to what is to come, the great corporation has now descended wholesale upon the shores of the River Plate, has already bought up a number of frigorificos, and it will be through no want of endeavour of its own if it does not sooner or later acquire the remainder.

I have no desire to tilt against the Beef Trust, which is very probably an excellent institution, but one that, since it openly lays no claim to a purely philanthropical policy, cannot be expected to safeguard the welfare of concerns that do not tend towards its own advancement. Should this corporation, therefore, attain its present object of securing the frigorificos, and the consequent monopoly of the purchase of cattle for export, the actual producers of the live stock will find themselves face to face with a situation of which they have previously had no experience. It is quite possible that it will suit the corporation to buy the cattle at prices similar to those which now obtain—or it may not, since it is well known that the estanciero continued to exist in a more or less affluent fashion when his cattle sold at lower rates than is the case at the present day.

In any case the matter seems to be taken fairly lightly in the South American countries most concerned. The prevalent idea is that, should the danger be realised, it is easy to legislate against trusts—a theory that may, or may not, be correct. Putting aside for the moment, however, these possible complications, it will be clear that the position of the River Plate countries as regards the shipment of their beef is quite exceptionally favourable. So much so, indeed, that it is not without the bounds of possibility that the spread of agriculture may at some future period receive a check in favour of the purely pastoral industry. For the wheat and maize-producing lands are considerably in excess of those that raise cattle in sufficient quantities for serious export. Fresh areas suitable for wheat-growing, moreover, are continually being lit upon, whereas the discovery of new grazing lands is obviously more limited. It is true that our own colony of Rhodesia promises to take an important share in the cattle-breeding industry—a promise the fulfilment of which may be anticipated with confidence. With this exception, the countries of the River Plate will undoubtedly hold the balance of power in all matters appertaining to that very, very important article beef.

In addition to that of the carcasses themselves, another very important product of Uruguay is the extract of meat produced by the Liebig (Lemco) Company. Fray Bentos was the original home of this industry, with which the place has been associated since 1865. Of late years the Lemco interests have spread far beyond their original frontiers, for of the total of nearly five million acres at present owned by the concern many hundred thousands of acres exist in Argentina, Paraguay, and even in Rhodesia. As a matter of fact, the working power of the recently constructed factory at ColÓn in Entre Rios, upon the Argentine bank of the river, exceeds that of Fray Bentos. Nevertheless, the importance of this latter place will be evident enough when it is explained that in 1910 over one hundred and seventy-nine thousand head of cattle were slaughtered there in order to provide the necessary extract of meat.

The Lemco town of Fray Bentos is by way of being a model specimen of its kind. The establishments of the managers here, and the dwellings of the workmen are each admirable of their kind, and very replete with the comforts and luxuries that appertain to the various walks of life. The streets, moreover, are broad and well-engineered, and the schools and various institutions denote a liberal spirit on the part of the directors of the concern.

To turn from the meat industry to that of agriculture, we come, naturally enough, to a far less imposing condition of affairs, but one, nevertheless, that is increasing in importance each year. The chief cereal of Uruguay is wheat. At the present moment nearly three hundred thousand hectares have been devoted to the raising of this crop. Although the discovery of fresh lands suitable to the production of wheat has caused this particular area to increase, the main centres in cultivation up to the present have been rather strictly localised. The provinces that contain the really important wheat districts are those of San JosÉ, Colonia, and Canelones. The lines of railway, however, that have recently been constructed to the east and west of the Republic are opening up much land that is undoubtedly admirably suited for the production of this cereal. Wheat, it may be explained, is a crop the nature of which renders it more immune than the majority from the attacks of the voracious locust. By the time the all-devouring insect is wont to make its appearance, the ears of the wheat are as a rule hardened to a sufficient extent to render them unpalatable. Wheat therefore, frequently escapes, wholly or in part, where the maize crop suffers severely from the ravages of the locusts.

The production of maize is only very slightly less than that of wheat. The yield of this commodity in 1909 amounted roughly to one hundred and seventy thousand tons, while that of wheat fell just below two hundred and thirty-four thousand tons. Generally speaking, it may be said that the districts where wheat is grown are suitable for the cultivation of maize, and thus in Uruguay the two are wont to flourish to a large extent side by side. It is worthy of note, however, that whereas the wheat area has remained more or less stationary, although its development is now practically certain, that of maize has increased to a marked extent—from one hundred and forty-five thousand hectares, in fact, in 1900 to over two hundred thousand hectares in 1909.

The production of oats and barley—although that of either still remains comparatively insignificant—has increased rapidly during the past decade. In 1900 the output of oats only just exceeded thirty tons, whereas in 1909 it had amounted to nearly seven thousand tons. Barley has a similar, although a somewhat more gradual, tale to tell, since in the corresponding period its production rose from four hundred to three thousand tons.