-----------------------------+-------------- Public works (in bonds)

5,000,000 Spirits and beer

19,800,000 Tobacco

17,400,000 Sanitary works

7,100,000 Stamps

9,450,000 Posts and telegraphs

9,700,000 Railways

9,000,000 Various

12,529,319 +--------------

89,979,319 -----------------------------+--------------

Below are given the figures since 1903:--

-----+-------------------------+-------------------------

REVENUE.

EXPENDITURE.

+------------+------------+------------+------------

Gold.

Paper.

Gold.

Paper.

-----+------------+------------+------------+------------ 1903

46,615,855

65,466,010

32,139,160

93,072,572 1904

52,254,428

70,004,834

25,597,625

104,177,150 1905

53,076,067

84,778,282

82,813,587

136,065,516 1906

61,616,090

88,835,790

30,128,828

174,688,551 1907

64,527,983

97,153,870

25,521,412

186,107,107 -----+------------+------------+------------+------------

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 compet.i.tion 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 munic.i.p.al, 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 cla.s.ses 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 Merou 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. Senor 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 ma.s.ses 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 ma.s.ses.

Senor 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 coa.r.s.e 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 ill.u.s.trate this. The preliminary duties are as follows:--

s. d.

Havana cigars in cardboard boxes, about 3 11 per kilo " " in wooden boxes " 2 7 "

Cigarettes " 1 9 "

Tobacco leaf from about 2d. to 1 2 "

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:--

IMPORT OF SUGAR.

1883 24,000 tons 1884 35,000 "

1889 34,400 "

1890 29,500 "

1895 5,600 "

1900 458 "

The production of sugar, which was also 24,000 tons in 1884, leaped to 75,000 in 1894. Senor Pillado remarks that this legislation converted Tuc.u.man 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 inst.i.tutions 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.

FOOTNOTES:

[106] For 1909 the figures were--

Imports 60,551,219 Exports 79,470,102.

[107] I have divided the figures, which are given by all authorities in American gold dollars, by five. It is greatly to be regretted that the splendid private enterprise of Englishmen in Argentina receives so little help from English statisticians or the English Government. The statistics are best set forth by an excellent publication, the _Bulletin of the International Bureau of the American Republics_, published at Washington. Even the _Statesman's Year Book_ (Macmillan) gives totals in American dollars. We have far more trade in South America than the United States, but we cannot, in view of the approaching completion of the Panama Ca.n.a.l and the intelligent efforts of American statesmen, hope to retain our position indefinitely if our own Government continues to trust to the policy of "muddling through."

[108] According to the _Statesman's Year Book_, the figures appear to be too high.

[109] MacCann, "Two Thousand Miles' Ride," i. 160.

[110] Ibid. ii. 304.

[111] _Bulletin of the American Republics_ (July, 1909), p. 14.

[112] As opposed to exportation.

[113] The table given below shows the tonnage of the chief ports in 1908:--

--------------+---------------------

TONNAGE.

PORT. +----------+----------

Entered.

Cleared.

--------------+----------+---------- Rio Gallegos

41,266

42,239 Bahia Blanca

799,198

783,272 Puerto Madryn

19,921

12,666 C. de Uruguay

603,818

646,411 La Plata

855,950

840,548 Diamante

375,779

449,492 Santa Fe

440,466

481,948 Parana

636,091

635,064 Erquina

374,037

373,596 Goya

404,917

377,227 Bella Vista

399,667

402,235 Empedrado

306,136

309,635 Correntis

504,433

494,693 Rosario

1,924,808

2,029,596 Buenos Aires

7,555,574

7,562,055 --------------+----------+----------

[114] The various authorities almost always differ slightly, sometimes considerably, in their figures. Thus the _Statesman's Year Book_ gives the tonnage of Buenos Aires in 1908 as 4,760,316, while the _Bulletin_ states it at 4,888,741.