The Quarterly Review

but for a long time the results were not as had been anticipated, chiefly owing to the unfortunate turbulence of nearly all the new Republics, which disturbed trade. Sir Francis Head, who travelled across the Pampas about the time of the establishment of Independence, stated that it would not be prudent to embark a large capital in the country. He remarked that:

"Taking into consideration the peculiar political situation of the country, I must own it appears to me that during the troubles and vicissitudes which must unavoidably attend the progress of these provinces towards civilisation, it would be imprudent for a stranger to enter into any permanent establishment. . . . He may have treated with a government which has ceased to exist, or with an individual whom fortune or whose influence may have suddenly disappeared.'

When the ferocious civil wars subsided, Argentina fell under the domination of the tyrant Rosas, who desired to prohibit all foreign commerce. After his fall, in 1852, trade improved; but it was checked by the war with Paraguay (1864-70). With peace there came gradual development; railways were now in being, and improved methods of preserving meat were introduced. Great Britain took the leading part in the development of the country into one of the greatest corn-growing and grazing lands in the world. The following table shows the substantial increase of the Argentine import trade. It will be noticed that trade suffered a serious set-back in the last years of the 19th century. This was the result of the historic financial collapse of 1891, caused by frantic speculation; it was one of the greatest disasters in the history of the Republic.

1874

1882

1890

1898

1902

1908

1912

1926

Whereas in 1884 there were only 2290 miles of railway, in 1899 the mileage had risen to 10,285. These fine broad-gauge railways enabled the wheat and pastoral products of the Pampas to be brought to the ports. Some two hundred million sterling of British capital is invested in Argentina, and of this more than threequarters is in railways. The breed of cattle and sheep was rapidly improved, and thus great industries of meat, wheat, and wool grew up. No breeders in the world are more resolute than those of Argentina to secure the finest blood stock, and nearly all the best strains are English and Scottish. The Durham, the Hereford, and the Aberdeen-Angus in cattle; the Lincoln and the Romney Marsh in sheep, and many other fine breeds have all been imported with splendid success. Not till 1875 was the first flour exported from Argentina. In 1908-a very good year-the shipments of wheat amounted to 3,500,000 tons. It is now the second wheat-exporting country; shipping more than half the quantity of Canada, nearly twice as much as the United States, and more than three times as much as Australia.

It was about the year 1908 that British trade reached its zenith. Perhaps the main factor of our success was the practice of sending out able and energetic men to do business in the country. In railways, in engineering, in machinery, in banking, and in mercantile pursuits, Englishmen, mostly young, entered Argentina, pushed their own fortunes, and built up a great international commerce. The circumstances were favourable, as Great Britain and many other countries were in need of Argentina's products. Since the last quarter of the 19th century the standard of living has risen in almost every part of the world, and thus there has been a strong demand for the meat and wheat of Argentina. At the same time the means of transport developed by leaps and bounds, and it was easy to put the goods on the market. Further, by the opening of the 20th century, the United States began to consume more and more of their own food-stuffs, and thereby the demand for Argentine produce was stimulated.

Of the other South American countries, Chile and Brazil are the most important in international trade. Chile, victorious in the war with Peru, obtained

possession of the whole of the nitrate regions, and this monopoly was most valuable, owing to the demand for this commodity as a fertiliser. The late Colonel North was one of the founders of the industry, which at once fell into English hands. Some twenty millions sterling of British capital are invested in the nitrate fields of Chile. This country, like Argentina, being fortunate enough to steer clear of incessant internal feuds, so ruinous to the prosperity of many South American Republics, rapidly became prosperous, and Great Britain had a notable share in the trade. In some respects the conditions in Brazil were less favourable. That country provides four-fifths of the world's supply of coffee; and our consumption of that article is a minute fraction of that drunk by France, Germany, and most other countries. But before the War we had the leading share in the import trade on account of the excellence of our manufactures.

In the other Republics we had, for the most part, the leading place. Peru was a tolerably wealthy country before the war with Chile, but was almost ruined by its disasters. To ease the financial situation the Peruvian Corporation, mainly a British concern, was formed, which still administers a considerable part of the national resources. The influence of the United States, which own large mining interests in Peru, has always been strong in that country, and in the last few years before the War their share in the trade was about as large as ours. Uruguay is a country where conditions are similar to those of Argentina; and where our position was stronger than anywhere else. Before the War our exports to that Republic averaged two or three times as much as those of the United States.

We thus see that in 1914 Great Britain had the leading place in the import trade of practically every South American Republic. The position was not quite so outstanding as it had been half a dozen years before; but it was Germany rather than the United States which was regarded as the more formidable rival. In Argentina, for example, Germany was considerably ahead of the Northern Republic. In the import trade the United States were handicapped by their defective banking system, while they had comparatively little

capital invested in South America; and, further, Yankee traders were not popular in the Southern Continent. It was Germany with her method and adaptability that was threatening our supremacy, and there were many complaints about lack of enterprise on the part of our merchants and manufacturers. The late Mr Koebel quotes from a Consular Report on Uruguay of 1910and the tale was repeated year by year at all the Consulates:

'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 after, when details are given, the price of many items is left vague.

'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."

It was evident that British business men were inclined to look upon their trade as part of the course of nature which would run on without new exertions and new devices on their part. An intelligent trade strategy was being pursued by their rivals; and two essential points of advantage-the saving of trouble to customers and, above all, familiarity with the Spanish language-were

being accepted by competitors and neglected by them; the result being an undermining of British supremacy. As will be seen, these lessons and others, even now, have been but imperfectly learned; yet they must be appreciated and acted upon before we can recover our position.

The Great War came, and when it was over there was change. Germany has temporarily dropped out of the race; the United States have stepped into our position. That country did not enter the War till the latter part of the third year, and previously had been amassing enormous wealth by supplying the belligerents with munitions. What was more important in connexion with our subject, the United States became a creditor country, and at the end of the War nearly all the combatants were deeply in her debt. Before 1914 her invested capital in Latin America was comparatively small; but in ten years she increased it by eight hundred millions sterling, and, of course, during the War had enjoyed practically a free hand in consolidating her trade policy among the Republics.

The following table of statistics, detailing the value of the goods sent to the four chief Republics by Great Britain and the United States respectively, show the catastrophic alteration that has resulted:

In 1912 Great Britain sent to Argentine