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CHAPTER XX
TUCUMAN AND THE SUGAR INDUSTRY
It was my good fortune to visit Tucuman in the northern area of Argentina during the height of the sugar-cane harvest. Here one was about as near the centre of South America as could be desired. The vegetation was wildly luxuriant, and seemed to have lapped over into Argentina from the jungles of Brazil. Here, also, the Latin colonists seemed to have been left behind, and one ran into a strangely mixed people, mostly native Indian in origin, but with a tincture in their veins from the Spanish settlers of centuries ago, together with a subsequent negro admixture.
I had looked forward to visiting a tropical town, of long streets of mud shanties heavily thatched, and with innumerable palm trees waving their plumes overhead. This kind of thing was to be found in the suburbs, where the Spanish-negro-Indians wore big, rough-made, straw-plaited hats, and their dusky mates, in bright garments, gossipped in the shadows, whilst their prolific offspring – often stark naked – gambolled in the sand. But Tucuman itself is much like other Argentine towns, for it has its plaza and statues and public gardens, its imposing houses and hotels and restaurants, its tramcars and electric light.
Tucuman has played its part in the history of the Republic. It was here that Independence was proclaimed in 1810, when the overlordship of Spain was repudiated; and it was here that, after much fighting, the treaty of peace was signed on July 9th, 1816. The house in which this took place was a modest building, not much bigger than a cottage. Sentiment prevented it being swept away before the rush for improvement, and so it has been left standing. But about it has been erected an imposing structure. Here is a house within a house; and a stout dame conducts the visitor into a gaunt room where Argentina's first parliament assembled; where there are paintings of fierce-eyed national heroes, frescoes depicting the proclamation of Independence, the chair where the first president of the Republic sat, and in which the visitor is invited to sit; and there is the customary visitors' book to be signed.
Tucuman vies with Cordoba in having amongst its residents some of the real old Spanish aristocracy of Argentina. Indeed, Tucuman puts forth the claim that it has the most beautiful women in South America. Certainly at the hour of promenade, when the sun begins to dip and before nightfall comes swiftly, and the people take to walking amongst the orange trees in the Plaza, or sauntering along the main thoroughfares inspecting the attractions in the shop windows, there is no difficulty in imagining that this is a bit of Madrid instead of being a little-visited town tucked away in the north of Argentina. Several enthusiastic residents assured me that their ladies were as close to the fashions as Paris itself. I am no authority on these matters; but I can say that the womenfolk appeared as well garbed as they are in the capitals of Europe. Along the clean streets whizzed expensive motor-cars. Before the restaurants were the little round marble-topped tables with which most of us are acquainted in European cities; and here men sat and drank their amer piquant and puffed their cigarettes, whilst the band played music, ragtime and other, with which we are so familiar at home.
The main avenue, still in the making, promises to be a gorgeous thoroughfare one of these days. There is a casino, a theatre (the Odeon), a palace for the bishop, barracks, a hospital, a brewery which cost £250,000 to build, and a "Savoy Hotel," where there was on sale whisky "as drunk in the House of Lords," and where one's admiration was only checked by finding the telephone system defective.
Tucuman is the centre of the sugar-growing industry. For many miles around the country is covered with sugar plantations, and the railway companies have little belt lines running through the cultivated area to facilitate the gathering of the crop. When I was there in 1913 the harvest had been the most prolific within knowledge. In places the line was blocked with wagons piled high with the cane, whilst in several quarters I heard grumbling that there was not a sufficiency of trucks to cope with the trade.
One day, accompanied by several friends, I made an extensive motor-car trip to the sugar plantations. As soon as we got beyond the town, and upon the broad road which stretched as far as eye could reach until it was lost in the shimmer of sunshine, we experienced the inconvenience of a bad way. With all its excellences, Argentina, as I have before remarked, has as bad roads as you will find in the world. There had been no rain for months, and our route was across miles of powdery earth. We sank into it almost to the axle. We churned up dust so that soon we were smothered in it. Our faces were almost as grimy as though we had been in a coalpit. Gaucho horsemen pranced past us in clouds of dust. When we overtook an ox-drawn wagon it was like pushing through a fog of dust. On either side the vegetation was profuse and rank, and the terrific heat of the tropics filled the air with a strong, nauseating aroma.
When we were in the sugar-cane district we saw hundreds of tawny-skinned men cutting the cane. Armed with an instrument which seemed to be half knife and half butcher's chopper, the peon seized the top of a cane, cut it off near the root, gave it a swing in the air, and with rapid slashes removed the protruding leaves, and then pitched the stalk on one side, where a heap was lying to be gathered by women and children and carried to the waiting wagons.
Twice we halted to watch the dexterity of the cutters and to visit the mud huts. These were picturesque but not pretty. They looked like disreputable brick-kilns, and although possessed of a door, were deficient in windows. The interior was dark, but most of the family spend their time out of doors under the trees, where they have their fires and prepare maté, the native tea, which is served in a shell and sucked through a tube. Whenever the natives have nothing else to do you are sure to find them drinking maté.
Around Tucuman are twenty-five sugar mills, and it is reckoned they produce 200,000 tons of sugar, of which between 60,000 and 70,000 tons are exported. We went to the fine mills at San Pablo belonging to Nouges Brothers, and the senior partner was good enough to show me over the place, so that I could inspect the whole process, from the arrival of the cane until the sugar is loaded in sacks ready to be sent to Buenos Aires.
The stalks, as high as a man, are thrown into a machine which literally chews them up. As they pass through heavy rollers they crunch and crack, and yield their juice which runs in a nasty brown fluid into a trough. Again the mashed-up cane is subjected to further squeezings between rollers, until practically the last drop of the syrup is squeezed out. The treacle-like stuff is run into big basins beneath which furnaces are blazing, and is kept at a simmer until the sugar reaches the consistency of dough. After that it is sluiced into highly heated steel cups, which are constantly whirling.
It is interesting to stand by in the sickly-sweet atmosphere and watch how, in the constant spinning and evaporation from the heat, the stuff loses much of its brown appearance and becomes, when thoroughly dried, like the cheap brown sugar as we know it at home. It is further refined in other hot chambers until it is quite white. Then men with sacks catch the stream of sugar as it rushes from the mouth of the refinery. Much of it is spilt, and the men are up to their boots in sugar. But the bags are quickly filled, pushed on one side, sewn up, hastened on lorries to waiting carts, which, when loaded, convey the freight to the railway wagons close by. Señor Nouges told me that at that time his firm was turning out 175 tons of sugar a day.
The sugar-cane must have plenty of sun and water. The rivers I saw during harvest time were miserable, shallow streams, meandering their way through what looked like a broad boulder-strewn bed of what once had been a wide stream. I was there, however, in the dry season, but was told that in the rainy season these streams are increased a thousandfold in volume, are frequently a quarter of a mile wide, and, when the torrents are heavy, overflow their banks and inundate the land. Irrigation is carried to a high point, so that in times of flood the waters of the rivers can be conveyed many miles and utilised in providing moisture to the cane.
It has only been in comparatively recent years that the possibilities of the extensive region of North Argentina, of which Tucuman is the centre, in regard to sugar have been realised. There is the initial expense of clearing the ground of jungle, and providing irrigation. Once, however, this has been done, and the cane planted, a paying crop is obtained the first year. The same roots grow useful stalks for three or four years, and then comes the process of gradually planting new roots and removing the old ones so that the same soil can be made productive. Weeds are numerous, and in the early months of growth these have to be constantly removed, first of all to prevent their smothering the young shoots, and secondly to give the cane all the nutriment there is in the soil. There is also the danger of invasion by locusts, and the occasional possibility in the cold months – say about May and June – of frost doing injury to the saplings. Allowing, however, for these disadvantages, the advance in the sugar industry in Argentina during the last dozen years has been nothing short of amazing. Still, I could not help feeling that the industry is only in its infancy. As soon as the foreigner appreciates what northern Argentina can do – at present most of the sugar growing is in the hands of Spanish-Argentines – there will certainly be enormous development. One of the things which will appeal to the foreign capitalist who takes up sugar growing on an extensive scale is that there is a quick return on the money invested in development.
Though Tucuman is the capital of the sugar growing interest, it may be said there are plenty of areas equally favourable for raising the cane. Sugar growing at Tucuman began about thirty years ago, long before the railway ever reached the place, and to meet purely local demands; because in those days the transport of imported sugar, as of other goods, by cart was expensive. When the railway put Tucuman into near communication with other parts of the Republic, the possibilities of a great trade were at once recognised. Tucuman sugar, however, could not in those days compete, either in quality or price, with that which came from other countries. It was, therefore, decided to give encouragement to Argentine sugar growing by a tariff on sugar which came from across sea. As one who favours the saving of a struggling industry in a home country from being strangled by vigorous foreign competition, I believe this was the right thing to do. Sugar growing bounded ahead. Not many years elapsed before the sugar growers became a powerful combination, with much influence on the Government. The result was that, whilst at the start the duty on imported sugar was small, it was gradually increased until it became prohibitive. Therefore at the present time very little foreign sugar comes into the country, and the Argentine industry has gone ahead in a remarkable manner.
Mr. N. L. Watson, in his publication "The Argentine as a Market," describes how Tucuman became a veritable El Dorado. Two years sufficed to give a net return four times as great as the capital invested. As a natural consequence, labour and capital flowed into the sugar districts. Lawyers deserted their professions, workmen their tools, to throw themselves with a regular fever into an occupation so full of promise. Works sprang up as if by magic, palaces were constructed to house the staffs, capital was lavished on the industry by individuals and banking houses alike. While fortunes were being created in the cultivation of the sugar-cane, orchards, orange crops, pasturage, and arable land were being either transformed or neglected.
Something like a trust has been formed amongst the sugar growers, with the object of maintaining prices. But public opinion is becoming so pronounced that, whilst there is no disposition to let the foreigner come in and undersell the native production, the tariff should be reduced in order that there may be more competition between the native and outside growers, with a slight advantage always given to the Argentine grower. The Republic is quite capable of growing all the sugar its inhabitants may require; but fair competition from the sugar of other countries will do much to regulate prices.
CHAPTER XXI
THE INDUSTRIAL SIDE OF THE REPUBLIC
The main energies of Argentina must for some time be devoted to her most obvious source of wealth. Yet it would be unwise to neglect a consideration of her industrial possibilities. Naturally she is anxious to supply herself with the commodities essential to daily life and comfort. But up to the present the Argentine has relied chiefly upon the exchange of its products, even for commodities which might be produced at home. This is due to the tendency common to new countries of going in for the "big deal." In this sense the agricultural industry has still a long journey to go. Intensive culture has so far not become a necessity. Extensive culture has yielded such good profits that no impulse has been given to the full exploitation of Argentina's hidden resources. This partly explains why the casual observer is confronted with the apparent anomaly of vegetables, fruit, eggs, and other foodstuffs being dear in an agricultural country.
It is on the lines of finishing her existing industries, attending to by-products as well as main products, that the foundations of Argentina's industrial future will best be laid. The immediate obstacle is the scarcity of labour. The essential requirements already exist, a good climate, excellent means of communication, a growing population, an open Custom House for most of the machinery and implements required for national industries, and a stable credit.
Few countries have been able to inaugurate home industries under more favourable auspices. Nothing can deprive Argentina of her agricultural eminence. But how she will fare when embarking upon the more uncertain career of a home manufacturer depends upon many things. Necessity is already driving Argentina seriously to face the problem of producing for herself her more obvious needs. The comparatively high cost of living is a growing trouble. Infant though she may be industrially, Argentina has already experienced the evils of industrial unrest. The principal manifestations have been in Buenos Aires, which, in addition to being the port and the centre of national activities, has been the storm centre of the rush to exploit her resources. It is the pulse of the Republic. Like other great cities, it is crying out against the diminishing value of the dollar.
Argentina's readiness for home manufactures is an urgent problem confronting the Government. The Government wants a more all-round development of the country's resources. Interwoven with this problem are important considerations: a more equable distribution of the population; the provision of more centres for the exchange of commodities; the relation between taxes for revenue and protective tariffs; the selection of what industries are to be established at an economic profit; the extent to which foreign manufacturers can be induced to start their industries within the Republic.
So far, the only industries that have continued with success are those producing articles difficult of transport, or of an expensive character. With a greater mobility of trade in the country, and a more scientific manipulation of the tariff, there is no reason why Argentina should not provide herself with many of the things which to-day furnish the labour agitator with opportunities for tirades against "costly living." Backed by agricultural wealth, and supported by splendid railway facilities, Argentina should be able to make advance on particular lines. Take wool as an illustration. Argentina produces more than sufficient for her own requirements, and yet she obtains woollen goods from other countries. Is it to be taken as final that the absence of coal in the country makes the development of woollen industries at home an economic impossibility? It is not, perhaps, so much a question of labour and initiative as the absence of natural advantages.
It is necessary to look farther afield than Buenos Aires in considering the chances of a new industry. The concentration of trade in the capital has probably been a hindrance. The congestion of all interests, commercial, political, and social, in "B.A." has caused land to increase enormously in value, an important consideration in setting up factories. In turn, other charges are correspondingly increased. Trade rises and falls according to the season. There is less stability for the worker, more fluctuations for the trader.
But, with railways linking up the interior with the coast, there is now no necessity for the drama of Argentina's commerce to be confined to a single theatre. There must be more centres of exchange, fresh districts for production and manufacture. If the auxiliary industries to corn growing and cattle raising were better fostered there would be no necessity for inland towns to go to Buenos Aires for vegetables, eggs, cheese, butter, and poultry. The market garden, the dairy, the poultry farm, the orchard, and the auxiliary factories would pour their products into the provincial centres. Local needs would be met locally. The surplus would be sent on with the grain and the cattle to the markets at Buenos Aires.
These, after all, are probably the safest lines upon which a new country can travel in her march to greater economic independence. First the purely agricultural; then the by-products of agriculture as a supplement; then gradually the establishment of whatever manufactures are practicable and profitable. For the present Argentina has greater need for cheaper eatables than for cheaper motor-cars.
Countries doing a big trade with the Argentine are beginning to see the force of providing goods on the spot. The crowding of agents in the principal towns has increased competition to a point at which the next move by certain competitors must be in the direction of producing in the country or losing the trade entirely. This will be all the better for Argentina. She has long had justifiable cause for complaint against those who are sent to Buenos Aires and other parts to barter for her trade. A well-worn lament in the reports of the British Consul concerns the English trader's lack of adaptability to the peculiar conditions of Argentina. Mention is made of quotations in English, the sending of representatives unacquainted with the language and business terms of the country, the adherence to methods applicable only to England.
On the other hand, the British exporter has grumbled at economic conditions calling for long and sometimes exaggerated credit; the taxes levied on commercial travellers; the difficulty of dealing direct with customers. Between the two points of view is the fact that commercial enterprise has stopped with the arrival of trade representatives in Buenos Aires.
The Argentine has already made shots at industry building. Tangible signs of an industrial future were visible on many occasions during my tour. Tall and smoking chimneys and busy factories for tinned meats, clothing, and boots were evidences of the start already made. Before, however, an advance can go towards full development there must be a more definite scheme of working, and a clearer apprehension of the end in view. There are, for example, greater possibilities for brewing and distilling. A recent census showed that these two activities engaged about 160 factories. Sugar, too, has proved for itself that when worked on proper lines it is a most profitable industry. Sugar-canes, formerly exported for others to refine, are now refined in the country, where the product finds a ready market.
It would be well-nigh hopeless for Argentina to attempt the introduction of industries to compete in her own market with well-established foreign industries of the same kind without the aid of tariff protection. This might mean a temporary loss in revenue by checking imports; but compensation would come through the success of the home industry. At the present time Argentina exports in raw wool over £10,000,000 worth annually. She imports woollen goods worth nearly £3,000,000. Her imports are increasing and her export of raw material decreasing. In ten years the latter fell considerably in actual bulk, through the rush to make quicker money from meat. Meanwhile, the question arises as to why Argentina should not prepare and manufacture woollen goods for home needs? The existing market is a large one. Textile industries already exist. They are few, but the fact that the number of establishments has increased is a clear proof that textile industries can be profitable. The opportunities here presented for the investment of capital are invaluable. There is room for new and increasing enterprises in a growing country with many years of growth before it.
It is essential to all industrial expansion that a country's credit should be good and its currency stable. Argentina is well off in this respect. Contrasted with some other American republics, in which revolution, revolt, and financial distress are painfully frequent, Argentina is a political and financial paradise. This stability, if not in itself an inducement to the investment of capital, is at any rate a guarantee that capital may be invested with safety. And in these days safety itself is a big inducement. Paper dollars form the everyday currency of the country. Careful provision has been made to establish the paper in circulation on a definite gold basis. Since the Caja de Conversion, the Government institution for the issue, exchange, and conversion of the paper currency, was established in 1899, the paper dollar has always been worth $.44 gold (between 1s. 8d. and 1s. 9d.). Certain specified resources are appropriated for the formation of a conversion fund, which guarantees the paper currency.
During the latter part of 1913 there was a considerable shipment of English sovereigns to the Republic. Under the Pellegrini Law passed in 1902 the Caja de Conversion must hold in gold an equivalent to the paper money in circulation. Indeed, the National Conversion Office, the National Bank of Argentina, the London and River Plate Bank and other banks had in June, 1913, an accumulation of gold amounting to £67,188,039. The gold in the Caja de Conversion began with the insignificant sum of £568 on December 31st, 1902; in 1904 it was just over £10,000,000; the next year it was up to over £18,000,000, and on June 30th, 1913, it was £53,306,866.
Argentina has a number of well-established banks, affording many facilities for the development of trade and industrial enterprise. One of the principal, the Banco Hipotecario Nacional, makes a feature of special loans for building and land improvements. Its loans are made on the mortgages of property by the issue of bearer bonds in lieu of cash to persons mortgaging properties to the bank. It need not be feared, therefore, that industrial enterprises of reasonable prospects will starve for the want of financial credit during the difficult years of inauguration. On the contrary, there is a good supply of money waiting fresh outlets. Bankers realise that it is to their own as well as to the country's advantage to have a wide field of financial operations. They have the money if others have the enterprise and the initiative.
The point has now been reached at which manufactories might well be harnessed to agriculture not only for the fuller working of Argentina's resources, but for remedying some of the social difficulties that have arisen through her relying too much upon one source of wealth.
