W. H. Koebel

British enterprise in South America—The various industries controlled—The railways of the Southern continent—A remarkable record—The opening up of new lands—Some possibilities of the future—Sound basis on which the extension of the lines is founded—Products and transport facilities—Probable influence of communications—Uruguayan railways—A high standard of enterprise—Comfortable travelling—Some comparisons between Uruguay and Argentina as railway countries—Level country versus hills—Stone versus alluvial soil—Questions of ballast—Importance of the new ramifications—Railway construction in Uruguay—History of the lines—Government obligations—Mileage and capital of the companies—Interest paid on capital—Various railway systems—Areas served—The Central Company—Sketch of lines and extensions—Important developments—The communication with Brazil—Financial position of the Company—Midland Uruguay Railway—Development and extension of the line—Receipts and expenses—The North Western of Uruguay and Uruguay Northern Railway—Montevidean tramways—Local, British, and German enterprise—Steamer service of the River Plate—The Mihanovich line—Ocean passenger traffic—Montevideo the sole port of call—The Royal Mail Steam Packet Company—The Pacific Line—The Nelson Line—Other British companies—Position of British exports—Sound consular advice.

British enterprise throughout South America is admittedly remarkable. If one except the retail and local trades that are carried on by the native-born inhabitants of each republic, or by the Spaniards, Basques, Italians, and Turks, each of which have taken some particular trade under their own protection, there is probably not a single branch of industry in which the British are not interested in a more or less important degree.

From mining and banking to farming and general commerce, the scope is sufficiently broad. In no other kind of enterprise, however, has intelligence and skill been so freely lavished as upon that of the railways. The British have not the sole monopoly of these great undertakings, it is true. There are the local Government lines, numerous French railways, and others of various nationalities that are ably served and administered. Yet almost every one of the most important lines throughout the entire Southern continent owes its existence to British capital, and is managed by British officials. The record is a remarkable one, and the full tale of its magnitude has yet to be written. It is true that in many branches of industry the ratio of British increase has not been in proportion with that of other countries—a falling off that may be inevitable, but that in any case is regrettable. Fortunately, this is not the case with the railways. Indeed, when the progress that is now being made is taken into consideration, it becomes evident that the results that must ensue within the space of a few years cannot well fail to affect the entire world.

Of the feats of this kind that are at the present moment being achieved some of the most important are concerned with Bolivia, Paraguay, and the hinterland of Brazil. The opening up of many of the hitherto inaccessible regions of these countries means more than the enclosing within the fold of civilisation vast areas of rubber, timber, and general agriculture. It promises, in fact, some revelations in the way of minerals and mines that, although the possibility of a disappointment must never be lost sight of, are likely enough to prove of an astonishing nature.

The tales of gold in the untravelled lands where the Indian still holds sway do undoubtedly not emanate merely from the imagination of the few travellers who have penetrated within certain of the districts. The reluctance of the aboriginal to disclose the spots from which they derive the precious metal is an acknowledged phase of his character. But it is not solely upon the unwilling testimony of the Indians that such hopes are based. It is well enough known that when the expulsion of the Jesuits occurred, and when many of the remoter districts in which they had established precarious missions returned to a state of savagery and seclusion, numbers of the mines that were even then known were abandoned when in the full flush of their yield—a yield that the primitive native implements could never make complete.

But it is not in anticipation of such developments as these that the railways have been built. The ordinary products of the countries in question are more than sufficient to demand their existence. The possibility of greater mineral fields than are at present suspected is merely a side issue in the general scheme. The influence of steam transport, however, upon many of the silver-mines cannot fail to be marked, since the utter want of transport facilities now renders imperative an astonishing number of mines of this kind the productive power of which is very great indeed.

The Uruguayan railways form no exception to the prevailing South American rule. The three companies in existence in that Republic are all British, and the standard of each is as high as that of the others in the remaining republics. Although the enterprises naturally enjoy lesser advantages in the way of skilled labour and technical conveniences than those here at home, there can be no doubt that the degree of comfort enjoyed by the traveller on a Uruguayan line compares very favourably with that experienced on an average British railway. The service and observation of punctuality are both to be commended, while the dining and sleeping cars are not only admirable of their type, but extremely well adapted to the needs of the country.

The natural facilities that the Uruguayan country offers for railways differ considerably from those of the Argentine. In the central provinces of the latter many hundreds of miles may be travelled without any gradient whatever becoming apparent. The absence of streams here, moreover, obviates almost entirely the necessity for bridge building. It has already been explained that the characteristics of the Uruguayan Campo are entirely different. Although it possesses few hills of any really imposing height, its stretches of dead level ground are equally rare. Thus, although the gradients may be gentle and sufficiently easy, they are almost continuous. In some places, moreover, the rise and fall of the line is necessarily accentuated, and even abrupt—at all events, compared with the neighbouring areas.

Although, however, Uruguay may not be quite so favourably situated for railway purposes as regards its levels, it possesses one very important advantage over Argentina. In the central and richest provinces of the latter one of the most serious drawbacks lies in the total absence of any local material with which to ballast the track. For hundreds of miles on all sides no stone—not even the merest pebble—is to be met with, since the land consists of nothing beyond the rich, alluvial soil. Thus, if stone be required for the perfection of the tracks, it is necessary to import it from afar, and the haulage of the material inevitably forms a weighty item in the cost and upkeep of the line. In this respect Uruguay is far more favourably provided for. Stone abounds, not only in certain districts but throughout the country—although, of course, there are many centres where the quality of the material is far superior to that of others. Thus the question of ballast and embankments is solved in a very simple fashion here, and in a land of numerous rivers and streams the construction of stone bridges is made possible.

As regards the present position of Uruguayan railways, it is impossible to over-estimate the importance of the new ramifications that are now spreading through the country. Uruguay contains no mysterious hinterland, it is true. But, although every corner of the Republic is known, the resources of many of its regions have of necessity remained quite untapped for want of the railway communication that was essential for the transport of the produce in whatever shape or form it might emerge from the soil.

I am indebted to Mr. V. Hinde, the secretary of the Midland Uruguay Railway, for the following information concerning the railways of the country:

The construction of railways in Uruguay may be said to have commenced in the year 1866, when a concession was granted for a line from the capital (Montevideo) to Durazno, a distance of 130 miles. The construction of this line was followed by the building of a short line from the city of Salto towards the frontier of Brazil. In 1877 an English company, the present Central Uruguay Railway Co., Ltd., was formed to take over the former and complete the line to the town of Rio Negro, which extension was finished in 1886.

In the meantime the Uruguayan Government had devoted considerable attention to the question of railways, and in the year 1884 a law was passed by the Chambers embodying a definite scheme of railway communication with various parts of the Republic, the executive being authorised to contract for lines as outlined, and to guarantee an income equal to £560 per annum per mile of line for a period of forty years. A result of this enactment was the formation of several companies in England, and railway construction was rapidly proceeded with. By the year 1891, 1,000 miles of line were opened for traffic. In respect of which some 670 miles enjoyed the Government guarantee, equal to 7 per cent. on a capitalisation of £5,000 per kilometre.

At this point, however, further development received a check by the Government finding it necessary to rearrange its obligations. This rearrangement took the form of a reduction of the interest on the External Debt, including railway guarantees, from 7 per cent. to 3¹/₂ per cent., the service at this reduced figure being secured on 45 per cent. of the Custom House receipts specially hypothecated. Punctual payment of guarantees at this rate has always been made.

In 1889 the Central Uruguay Western Extension Railway Company was formed to construct a line from San JosÉ to the towns of Mercedes, Sauce, and Colonia. This line does not enjoy a Government guarantee, and reverts to the Government in the year 1862.

The railway system of the Republic to-day amounts to some 1,432 miles of line opened for traffic and 78 miles in course of construction.

The following shows the capital of the respective companies and length of lines:

The amount of interest, &c., paid on the above capital may be seen in the table on the following page, which is equal to rather over 4¹/₅ per cent. on the whole capital of £13,444,089.

The railway system of Uruguay may be said to be represented by the following companies:

The Central Uruguay Railway and its allied lines.

The Midland Uruguay System, which joins that of the Central and forms a means of communication with the cities of PaysandÚ and Salto, with a branch to the town of Fray Bentos, now almost completed.

The North Western of Uruguay, continuing the railway from Salto to the frontier of Brazil at Cuareim.

In addition there are the short lines in the nature of branches—that of the Northern Uruguay Railway Company, branching from the North-Western system at Isla de Cabellos connecting with the frontier of Brazil at San Eugenio; and the Uruguay East Coast Railway from a junction with the North-Eastern Uruguay system at Olmos to Maldonado, a distance of seventy-eight miles.

Central Company.—By far the most important system is that of the Central Company, including leased and worked lines. The lines of this system extend from the capital to the frontier of Brazil at Rivera, with branches to the city of Mercedes in the west, and the towns of Melo, Treinta y Tres, and Minas on the Eastern and North-Eastern Extension. The railway from the capital passes through a well-populated agricultural district for a radius of about thirty miles; this radius is gradually extending, stimulated by the increasing importance of Montevideo and the gradual breaking up of lands in the fertile regions of the western and eastern extensions.

The extension now finished to Melo opens up another district suitable to the cultivation of cereals, from which considerable traffic is being derived.

An extremely important matter in connection with the future development of these lines, and, in fact, all the railway interests of the Republic, is to be found in the completion of the port works at Montevideo. Until the port works were taken in hand the embarkation of cargo at this principal outlet of the Republic had been greatly hampered by natural difficulties, and consequently heavy charges in connection with the lighterage from the railway wharf to the ocean steamers. The deepening of the inner port and the construction of extensive wharfs and piers at which ocean steamers can berth will doubtless lead to an increase in traffic, not only from Uruguay but the neighbouring State of Rio Grande do Sul.

An important connection with the railway system of Rio Grande do Sul is made at the terminus of the Central Uruguay Northern Extension Railway at Rivera, and by the completion of a connecting link between the Sao Paulo Rio Grande Railway System and the lines of the Cie Auxiliare de Chemins de Fer au Bresil, a Company which controls practically the whole railway system of the State of Rio Grande do Sul (now almost completed), direct railway communication will be established between Montevideo and Rio de Janeiro.

The following table shows the result of working of the Central Uruguay Main Line, exclusive of extensions, which, as far as expansion in receipts is concerned, may be regarded as indicative of those lines:

The increase in gross receipts is perhaps not quite so marked as in the case of neighbouring lines in the Argentine Republic, and a reason for this is to be found in the fact that, favoured by magnificent grazing camps, cattle raising is still the principal industry of Uruguay. Agricultural development, although more marked of recent years, has been slow, but an increase in this is probably due to efforts which are being made by the Government to promote colonisation and the extension of lines in the Eastern provinces.

Midland Uruguay Railway.—This Company's line passes through an entirely pastoral district, and its traffic is principally derived from the carriage of cattle, wool, and general merchandise. An important extension is now practically completed to Fray Bentos, the headquarters of Liebig's Extract of Meat Company. The River Uruguay at this point is navigable for large ocean steamers, and a pier has been erected to accommodate these, which will put the railway system of the north of the Republic in a more favourable position to handle the various products of cattle-killing establishments, both in Uruguay and on the Brazilian side of the frontier of Rio Grande do Sul, an industry of increasing importance.

At the present time a considerable tonnage is transported by river from Salto for shipment from Buenos Aires. It is possible, therefore, that the extension of the Midland Company to Fray Bentos will play an important part in the development of its line and those of the companies north of Salto, and Fray Bentos should very shortly become the second port of the Republic.

The receipts in Uruguay of the Midland Company have shown some expansion of late years, having increased from £55,000 in the year ending June 30, 1904, to £88,165 in 1909-10 (see opposite page).

The North-Western of Uruguay Railway and Uruguay Northern Railway.—The remarks with regard to the nature of the country and the traffic of the Midland apply also to these lines. At the terminus of the North-Western Line at the River Cuareim arrangements exist for the interchange of traffic with the Brazil Great Southern Railway, and the respective Governments have sanctioned a project for the construction of an international bridge to connect the lines at this point. It is probable that this bridge will be constructed within the next few years, as the interchange of traffic due to the extension of the Brazil Great Southern Railway to San Borju is likely to be considerably enhanced.

The excellent tramways with which Montevideo is served are administered by three companies, local, British, and German. The local enterprise is considerably the smallest of the three, the extent of its lines not exceeding twelve miles. The concern, moreover, is dependent solely upon horse traction, with its attendant disadvantages.

The British enterprise, the United Electric Tramway Company, is the most important in the capital. It possesses eighty-two miles of line, 195 passenger-cars, and sixty-eight trailers. By the terms of the concession at least two-thirds of the employees must be citizens of the country. The Compania Alemania Transatlantia is a German Company, with a length of seventy-five miles of electric tramlines.

The steamer service of the River Plate and Uruguay is almost entirely in the hands of the Mihanovich Company, as, indeed, is that of the entire system of these great rivers. The Company is an extremely powerful one, possessing a very large fleet that comprises all classes of steam vessels from the small, puffing tug to the largest and most modern liner of the fresh waters. Many of these latter are peculiarly fine specimens of their type, graceful in build, powerfully equipped, and provided with broad and roomy decks. Although the larger of these craft will carry between two and three hundred passengers, the cabin and saloon accommodation is contrived on a most liberal and imposing scale. Indeed, there is no doubt that the Mihanovich boats are a credit to the broad rivers on which they float.

So far as the ocean passenger traffic is concerned, Montevideo is the sole Uruguayan port at which the liners call. The capital affords a port of call for the magnificent vessels of the Royal Mail Steam Packet Company that, notwithstanding their size, are now enabled by means of the recent harbour improvements to enter the inner waters of the port. Of the other British lines concerned, the most important are the Pacific (that is now incorporated with the R.M.S.P.) and the Nelson Line, that possesses a fine new fleet of ten-thousand-ton boats. The other great British shipping companies whose vessels call at Montevideo are the Lamport and Holt, Houlder, Prince, Houston, the New Zealand Shipping Company, and the Shaw, Savill.

Thus it will be seen that in all monumental undertakings of the kind the British are holding their own in a satisfactory fashion. As regards ordinary commerce and the exports of manufactured goods, the progress, unfortunately, is by no means so evident. I have so frequently laid stress upon the narrowness of the home commercial ideas in this respect that still obtains in so many quarters that I am glad to be able to quote the words of another that admirably fit the case. The following is from the Consular Report on Uruguay issued in 1910, and the sentences undoubtedly sum up the situation with a commendable accuracy: "It has been pointed out to me that careful investigation into the commercial methods of our competitors reveals several reasons why British trade has failed to retain the proportion of the imports it held a few years ago. For instance, greater attention to detail is paid by the foreign merchant than by his British rival, who, as a rule, adheres in catalogues and invoices to British standard weights and measures and prices, without giving their equivalent in terms of the country. In tenders for public works German firms study the specifications with minute care, and tender for every item, leaving nothing in doubt, besides drawing up their applications in so clear and simple a manner as to give the minimum labour in examination, and the maximum of facility in comparison to the authorities who deal with them; whereas British tenderers sometimes merely quote a lump sum, ignoring all details, and often, when details are given, the price of many items is left vague, 'As may be agreed upon.' When goods are imported into the country from Germany, France, the United States of America, &c., a detailed statement in Spanish of the contents of each package is generally furnished, with metric weights and measures, which facilitates their rapid examination and dispatch, whereas British firms as a rule content themselves with the brief statement, 'Case containing machinery' or 'hardware,' &c., leaving to the Custom House official the task of working out details and calculations.

"Then, again, as regards languages, the British commercial traveller, armed with British catalogues and price lists [although I note with pleasure that some are now printed in Spanish], knows no language but his own, but the German invariably speaks Spanish and English, and he has carefully studied beforehand the needs of the market which he is visiting and the financial position of merchants. This gives him a great advantage over his British rival, who rarely has previous knowledge of his would-be customers, and is dependent on such chance information as he may pick up to be subsequently confirmed by inquiries at the banks. Time is thus lost, and irritation is caused to respectable buyers, who resent what appears to them impertinent suspicion."