Group Title: sociedad rural Argentina and Argentine economic policy during the Radical era
Title: The sociedad rural Argentina and Argentine economic policy during the Radical era
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Title: The sociedad rural Argentina and Argentine economic policy during the Radical era
Physical Description: Book
Language: English
Creator: Turner, Blair Pierce, 1947-
Copyright Date: 1986
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Bibliographic ID: UF00102781
Volume ID: VID00001
Source Institution: University of Florida
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Copyright 1986

Blair Pierce Turner


A dissertation seems to be the kind of project for

which many persons must be thanked. By definition, it is an

undertaking guided and assisted by many. Among those are

Professors David Bushnell, Lyle McAlister, and Terry McCoy,

and the other members of my committee, who provided

guidance and suffered through years of patient waiting.

Their expertise and teaching skills have made my graduate

career possible.

The Department of History and Politics and the Office

of the Dean of the Virginia Military Institute helped in

many ways, especially keeping me employed during the

writing of this dissertation and providing research funds.

I was also greatly assisted by a Fulbright Grant to

conduct research in Buenos Aires, Argentina in 1981. The

staffs of the Fulbright office, La biblioteca de la

Sociedad Rural Argentina, and the Instituto Torcuato di

Tella in Beunos Aires were of great help during that


My quatitative work was assisted by the Data Center at

the University of Wisconsin, Madison and the staff of the

Computing Center at the Virginia Military Institute.


In addition, many individuals helped in many ways. I

thank especially Sandra McGee-Deutsch, Richard Walter,

Kristine Jones, Doug Richmond, and Theron Nunez for their

encouragement. And my parents contributed in many ways, not

the least of which was fiscal.

But, more than all the others combined, regardless of

their official position or contributions, I thank my wife.

She kept me alive and made me believe this was worth doing.


ACKNOWLEDGMENTS ........................................... ii

ABSTRACT. .................................. ............. vi


ONE INTRODUCTION .....................................1

Notes ............................................7

TWO SOCIAL AND POLITICAL CHANGE, 1870-1916...........9

Notes ...........................................43

IN THE GOLDEN AGE, 1870-1930.....................52

Notes......... ................................... 82

FOUR THE EXPORT-LED ECONOMY, 1870-1930...............91

Notes ............................................122


Notes.... ................... .. ................. 157


Notes........ ......... ........................ 200

SEVEN CONCLUSIONS...... ..............................204


CONDUCTED IN CHAPTER FOUR........... .....238


Notes..... .............. ................ 262

BIBLIOGRAPHY. ................................ ... .... 263

BIOGRAPHICAL SKETCH .....................................275

Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy



Blair Pierce Turner

December, 1986

Chairman: David Bushnell
Major Department: History

The Radical party was brought to power in Argentina in

1916 by a series of political and social changes associated

with a period of economic expansion beginning in the late

19th century and is associated with the emergence of middle

sectors in Argentine political and economic life. The

Sociedad Rural Argentina (the SRA) was founded in the

middle of the 19th century and represented the established

rural aristocracy. The Radicals, as the government in

power, and the SRA, as the representatives of beef

producing interests, had to combine their efforts to cope

with crises in the export economy of the post World War I


An analysis of legislative activity concerning economic

issues in the Radical period indicates that the SRA had a

specific, but shifting, policy with regard to economic

issues. The Radicals, on the other hand, generated no

consistent economic policy, due to factionalism within the

party and lack of an apparent operational economic

philosophy. While the Radical administrations and the SRA

cooperated on some policy issues, government economic

policy had little impact on the conditions which produced

the economic crises during the period.



In an article published in 1961, Arthur P. Whitaker,

Professor of History at the University of Pennsylvania,

coined the phrase "The Argentine Paradox." The paradox he

cited was created by the juxtaposition of the seemingly

well-developed economic, social and political institutions

of Argentina with its apparently underdeveloped political

behavior. The contrast was "striking" to Whitaker in 1961.

For some time past, the political behavior of
the Argentine people has been marked by the traits
of instability and perfervid nationalism that one
associates with the economically underdeveloped
and politically inexperienced peoples just
emerging from colonial subjugation in Africa and

In terms of cultural, social and economic development, he

regarded Argentina as having advanced far beyond those

"inexperienced peoples." Yet, in spite of the contemporary

Frondizi government's "commitment to democratic principles

and international cooperation," the political norm in

Argentina had come to be "rabid nationalism and political

fragmentation. "2

The paradox Whitaker cited in 1961 was that, while

Argentina had often appeared to be politically developed, it

had not behaved that way; its political history since 1930

had been filled with revolts, coups and other breaks with

"developed" political tradition. Whitaker made it clear that

this situation was of "comparatively recent origin". In the

half century before 1930, Argentina enjoyed a remarkably

rapid economic development, and this was paralleled by a

seemingly harmonious growth in "political grace." The

paradox--the "fall from grace"--begins in 1930 with the

overthrow of the Yrigoyen government by General Jos6 F.


This view was not held by Whitaker alone. In his book

Political OrderiJnlCh gcieties, Samuel P. Huntington

expressed similar views as he discussed "mass praetorian"

polities, of which Argentina was the prime example. A "mass

praetorian" polity was one in which there was a high level

of political participation on the part of the population but

the institutions of government constituted "law-neglecting

systems, where the rulers acted in their own interests

rather than those of the polity."4 Like Whitaker, but using

different terms and analyses, Huntingon saw a paradox in the

Argentine situation in terms of "modernization" versus

"traditionalism". "Modernization", meaning more open popular

access to the political mechanism, is offset by

"traditionalism" (restricted access to power) in the actual

running of that mechanism. Huntington also cites the year

1930 as the beginning of paradoxical behavior in Argentina,

at least as indicated by changing patterns of military

intervention in politics.5

The year 1930 appears as a critical turning point in a

host of other analyses of Argentine politics and economics.

It is seen as the beginning of "chronic political

instability"6 or as the year when Argentina "moved on to

dictatorial forms" after a period of democratic growth.7

Economic historians have seen 1930 as the year marking a

shift from an "open export economy" to a less productive,

"partly closed" economy as a result of the world depression

of 1929. And this shift is seen as concomitant with a change

in politics from "middle class liberalism" to "conservative

reaction".8 Even scholars concerned with a continuing

political phenomenon such as populism see 1930 as a

watershed year between "reformist" and "national

developmentalist" types of populism9.

Even scholars writing in the years of seemingly steady

progress up to the great depression were affected by the

notion of the uniqueness of Argentina and (as a corollary)

of the contradictory nature of 1930. Writing in 1921, Austin

F. MacDonald proclaimed

The fight for democracy has been won, and
Argentina has taken her rightful place among the
great free nations of the world.10

In 1930 another scholar, Clarence H. Haring, was lamenting

the fall of the Radical government in Argentina as

"remarkable" because of the fact that the country was more

developed and democratic than her neighbors. Argentina was

"in a different category."ll

It must be recognized, of course, that 1930 appears as a

critical year for all of Latin America. Scholars have noted

the "wave of revolts" in Latin America and called 1930 "a

turning point in Latin American history."l2 Haring, himself,

was moved to compare 1930 in Latin America to 1848 in


Thus, for Argentina the point is not so much that 1930

was a year of crisis--one that Argentines suffered along

with sister nations and much of Europe--as that it ushered

in Whitaker's "age of paradox." However, this dissertation

will assert that the conditions which produced the paradox

(seemingly developed structures contraposed to under-

developed behavior) were already in existence before 1930.

The "fall from grace" had started long before 1930. Indeed,

Argentina was not sufficiently developed politically or

economically before 1930 to create a genuine paradox; what

happened in 1930 was therefore not paradoxical.

Scholarly opinion, including those examples cited above,

has tended to focus on the stunning economic growth and the

relative political stability of the 1880-1930 period in

Argentina. Compared to other countries in Latin America,

economic growth was indeed stunning and political affairs

were handled with Whitaker's "grace". The development of the

export economy, based among other things on beef, certainly

contributed to an economic explosion not matched in Latin

America and comparable to previous boom periods in Western

Europe and the United States. That prosperity was enhanced

is true. That it was equally shared or prudently managed is,

however, something else.

The case can be made that this prosperity was fragile

and temporary and that those managing it misperceived the

situation, believing it stable and permanent. Part of this

dissertation will examine the economic growth and offer the

thesis that it was not as it appeared: that it was unstable,

and dependent on foreign markets and foreign control. It was

also short-lived, ending in fact before the great depression

of 1929. Indeed it was in trouble soon after the First World

War even during the glory years of the 1920's when the

Argentine economy was perceived by many to be so healthy.

The reasons for this are complex and manifold and cannot be

blamed solely on any one social or political group.

Still, significant changes were produced in the social

structure of Argentina, creating a new and growing middle

class and a large urban working class. Both groups seemed to

gain new economic power in the period of expansion and

diversification of Argentina's economy. And the same period

was.witness to an apparent opening of the democratic process

politically. The last period of the "Golden Age" is termed

la epoca radical because of the emergence of a "middle

sector" political party, the Uni6n Ctvica Radical (UCR),

which supposedly provided the middle class the same

increased power in politics that it had been achieving in

economics. The UCR in its many varieties seemed to usher in

an era of honest elections, enhanced participation, and a

government responsive to the wishes of at least the rising

middle class, if not the entire population. That this new

political movement failed in 1930 is often attributed to

conservative dissatisfaction with the changes afoot in

Argentina and a willingness to use the military to end the

electoral process and the evils it was seen to be producing.

In addition, the crisis of the world economy in 1929 and

after is seen as a culprit, destabilizing the Argentine

government. The creator of the middle class polity, Hipl6ito

Yrigoyen, is also seen to be at fault, for he split the UCR

on personalist grounds, and his reelection in 1928 at an

advanced age seemed to demand action on the part of

reformers and conservatives alike. His insistence on

personal control of the machinery of government and his

reputation as the reclusive peludQ (armadillo) augured

poorly for his continuance in power.14

Nevertheless, it can be argued that the reforms of the

Radicals were, themselves, less than profound: that they led

to a shift in the electorate but not a shift in the process

of government or a change in real decision making. In

addition, it can be demonstrated that the economic problems

contributing to dissatisfaction and eventual dismantling of

the middle-sector government the Radicals created were

evident long before Yrigoyen's second term and in fact were,

if not created, at least abetted by the Radicals themselves.

In the light of this interpretation, one is tempted to alter

Whitaker's thesis of a paradox to suggest that the Radical

period was not the inauguration of a new norm, but rather an

aberration from an established pattern--that the paradox is

that the Radical period occurred at all. It might be more

correct to view the post-1930 period as a return to normal,

and the Radical period as a temporary escape from the

Argentine historical record.


1Arthur P. Whitaker, "The Argentine Paradox," ThB Annals
of the American Academy of Political and Socia Sciences ,
334 (March, 1961), 104.

2Robert N. Burr, "Abstract," The Annalsof the meFrri
Academy of Political andSocial Sciences, 334 (March, 1961),

3Whitaker, "The Argentine Paradox," 104.

4Samuel P. Huntington, Political Order in han
Socieies (New Haven: Yale University Press, 1968), 81.

51bid, 221.

6Peter G. Snow, Political Forces in Argentina (Boston:
Allyn and Bacon, 1971), 18.

7Peter H. Smith, Argentina and the Failure of Democracy:
Conflict among Political Elites. 1904-1955 (Madison WI:
University of Wisconsin Press, 1974), xv.

8See, for example, Gilbert Wilson Merkx, "Political and
Economic Change in Argentina from 1870 to 1966" (Ph.D.
dissertation, Yale University, 1968), 361.

9Michael L. Conniff, ed., Latin American Populism in
Comparative Perspective (Albuquerque: University of New
Mexico Press, 1982), 7.

10Austin F. MacDonald, "The Government of Argentina,"
Hispanicmerstorl Riew, 5: 1 (February, 1922),

11Clarence H. Haring, "Revolution in South America,"
Foreign Affairs, 9: 2 (January, 1931), 289.

12Howard J. Wiarda and Harvey Kline, Eds., Latin
American Political and Deyzpelojmen (Boston: Houghton and
Mifflin, 1979), 30.

13Haring, "Revolution in South America," 277.

140ne contemporary author, commenting on the
revolutionary nature of the 1930 coup, argued that much of
the responsibility for its occurance had to be laid on
Yrigoyen's second term policies which alienated the very
groups which had been the source of his support. See Ernest
Galarza, "Argentina's Revolution and Its Aftermath," Foreign
Policy Reports, 7 (October, 1931), 309-22.


The preceding introduction was not intended to suggest

that there is no reason whatsoever to view 1930 as a

critical year in modern Argentine history. That there was a

military coup for the first time since the constitutional

founding of the republic and that epic changes would issue

from that, is undoubted. But, for the purposes of this

dissertation, it is what went before that year which is

important. In this context, the year stands out as the

culmination of a fifty-year period of an extraordinary and

comprehensive metamorphosis of Argentina. One of the most

remarkable aspects of this change is the great flood of

immigrants into Argentina. For this reason, one author has

called the period "alluvial".1

This flood would eventually be responsible for profound

social, economic, and political changes, but its first and

most obvious manifestation was demographic growth. The

first national census was taken in Argentina in 1869 and

the third in 1914, which roughly covers the "alluvial" era.

Within that period, the population increase in Argentina is

impressive--some 352%. Extending the period to 1929, the

population grew from 1,830,000 in 1869 to an estimated

11,600,000 in 1929: an increase of 534%. In the first

quarter of the 20th century, the Argentine population

sustained one of the highest growth rates in the world.

While hardly densely populated even in 1929, Argentina was

no longer an underpopulated backwater.2

More important than simply aggregate population growth,

however, were the source of that growth and the effects it

had on demographic and social structures. As Tables 1 and 2

indicate, the majority of the population growth in

Argentina was the result of immigration rather than native

reproduction. Almost 60% of the expansion between 1869 and

1929 can be attributed directly to immigration.3

This massive immigration was not an accident of history

or geography. It was caused partly by the apparent openness

of the Argentine and the massive exodus from Europe in the

tumult of the second half of the 19th Century. Of the some

40 millions who left Europe during this period, Argentina

received over 12%. This influx was caused also by active

Argentine policy. The constitution of 1853 contains more

than one provision which calls for the promotion, directly

or indirectly, of immigration. Article 14, which outlines

the basic rights of citizens is not restrictive--it applies

to all inhabitants, native and foreigner alike. Article 20

reenforces this notion by specifically granting to all


YEARS (x 1000) _CONSIDE EDLABORa (x 10)l

1857-60 12.7 87.40

1861-70 80.5 95.15 41
(as of 1869)
1871-80 90.7 93.82

1891-90 648.7 98.30

1890-1900 337.8 94.70 75
1901-10 1,134.3 98.76

1911-20 280.0 96.11 91
1921-30 905.8 94.50

TOTALS 3,490.5 96.71 207

TOTAL NET IMMIGRATION, 1857-1930: 3,697,500

aImmigrants arriving 2nd or 3rd class boat passage.

Source: Diaz Alejandro, Essays on the EcDomic History
of the Argentine Republic. Table 1.13, 23-24;
Sociedad Rural Argentina, Anales de la Sociedo
Rural Argentina, 59-64.


A. 1869 population 1,830,000

B. Estimated net immigration
1869-1929 3,563,000

C. Estimated native
population growth 4,000,000

D. Estimated immigrant
population growth
(E ) 2,207,000

E. 1929 population 11,600,000

G. Total impact of immigration
(B + D) 5,770,000

H. Percent of population growth
1869-1929 due to immigration
(<___> ) 59.05
( x 100)

aExcluding the impact of immigration: based on an estimated
growth rate of 2% per year as calculated by Dfaz Alejandro.

Source: compiled from Table 1.

"foreigners" the same rights as "citizens." The same

article makes it very easy to obtain citizenship through

naturalization; the maximum residence requirement was only

two years. Even this brief period could be shortened by an

immigrant "asserting and proving services to the republic."

The federal government was specifically called upon to

"encourage European immigration" and could not

restrict, limit, or burden with any tax
whatsoever, the entrance into Argentine territory
of foreigners who arrive for the purpose of
tilling the soil, improving industries, and
introducing and teaching the arts and sciences.4

In addition, Congress is explicitly empowered to promote

immigration in Article 67, section 16.

Even before the Constitution was written, the Argentine

government had undertaken efforts to promote immigration

into its sparsely populated territory. In 1824, a

Commission of Immigration was formed to promote immigration

opportunities to Europeans. Negotiations with the British

firm of Baring Brothers to act as agents for immigration

were initiated in 1825, and included were provisions for

paying the overseas passage of Europeans willing to settle

in Buenos Aires Province. These efforts failed, in the

short run at least, because the war in Uruguay in the late

1820's and subsequent civil conflicts among the provinces

made the Argentine less attractive for potential

immigrants.5 After the 1850's, however, with the provinces

federated under their new constitution and the

establishment of at least a modicum of civil peace,

immigration efforts were renewed.

In 1863, a private commission of leading citizens of

Buenos Aires began to undertake efforts to assist

immigrants. An asylum for immigrants--a sort of halfway

house--was founded to assist recent arrivals. But residents

could stay a week only, and other private efforts at

immigrant assimilation failed. The commission disbanded in


Governmental efforts were more sustained. A Central

Commission for Immigration was founded by the federal

government in 1869, followed by a separate Labor Office

also focusing on immigration in 1872. The National

Immigration and Colonization Act of 1876, the so-called

Avellaneda Law (after president Nicolas Avellaneda,

1874-1880), combined both of these agencies under the

directorship of a new General Department of Immigration

within the Ministry of the Interior. Its explicit purpose

was to stimulate immigration, providing funds for agencies

promoting immigration as well as overseas passage for

immigrants, and to protect those immigrants upon arrival.

It also provided mechanisms for transfer of land to

immigrants free or at reduced prices, as well as loans for

land purchase and the acquisition of stock and equipment.

Specifically, immigrants with some capital and agricultural

skills were sought to settle the interior, which was soon

to be vastly expanded by new acquisitions in the Desert

Campaigns of General Julio Argentino Roca.

But this campaign to "populate the desert", like

earlier efforts at stimulating immigration, failed in its

grand design because of difficulties in getting to and

settling distant areas, hardships on the immigrants, and

land-holding patterns which discriminated against new

arrivals. Government policy did little to encourage the

breakup of large, unproductive parcels of land, or to

encourage immigrants to join the land market. Small parcels

were taxed disproportionately, making it more costly for

immigrants to obtain them, thereby encouraging tenancy

instead of ownership. Consistent with a pattern of land

distribution established since colonial times, the best

land was sold long before foreign arrivals could get at it.

Moreover, bond issues on land yet to be acquired by

military expansion were sold to speculators to fund that

very expansion. Only the least desirable, most distant

areas went unsold to remain available for acquisition by


Not surprisingly, then, immigrants avoided the

"desert." Some did go to Patagonia and, in fact,

constituted almost half the population there, but their

numbers were minimal. For the most part, the immigrants

opted in favor of the more fertile and geographically

accessible pampas and littoral areas, especially the

provinces of Santa Fe and Entre Rios. Their numbers and

impact were more impressive there. (Table 3 clearly

indicates these population movements.) But, here as

elsewhere, most immigrants did not become land owners, but

tenants on already owned but unworked land. The government

of late 19th century Argentina generally avoided direct

intervention to promote immigrant land acquisition, relying

instead on laissez-faire policies and natural economic

stimuli to provide opportunities. When the government did

pass a homesteading act in 1884, it applied only to the

worst areas: those south of the Rio Negro frontier. In

general, immigration policy was aimed at gaining a work

force, not creating an independent land-holding yeomanry.

By 1914, only about 30,000 immigrants had become


Those who had controlled the land since colonial days

clearly were not interested in losing it, and although the

government was prepared to fund immigration agents and pay

overseas passages, official policy remained otherwise

apathetic or even callous. In one case, a cash prize was

offered ". .for the design of a ship which could carry

live cattle in its European run and immigrants on its

return."9 The flow of immigration was left to the control

of market forces, peaking in economically prosperous times,

and slacking off in down times. As one scholar concluded

Agriculturalists and immigrants were accepted as
servants to build Argentina's greatness. They were
not, however, primary concerns of the nation.10

IN ARGENTINA: 1869, 1895, 1914


1869 1895 1914

Pampas and LittIral

% of total population in the region 41.3 58.2 64.3
% of region who were foreigners 24.6 32.8 34.4


% of total population in the region 7.4 7.3 5.9
% of region who were foreigners (no data) 34.5 27.7

Central and Northwest

% of total population in the region 40.9 26.8 21.9
% of region who were foreigners 1.9 4.5 9.8

% of total population in the region 10.4 7.0 6.5
% of region who were foreigners 4.7 7.5 18.0


% of total population in the region 0 0.7 1.4
% of region who were foreigners (no data) 42.3 48.5

Source: compiled from Ernesto J. A. Maeder, "Poblaci6n e
inmigraci6n en la Argentina," in Ferrari and Gallo, 555-74.

aRegions are composed of the following provinces or
Pampas and Littoral: Buenos Aires, Santa Fe, Entre
Rios, La Pampa
Northeast: Corrientes, Misiones,Chaco, Formosa
Central and Northwest: C6rdoba, Santiago del Estero,
Tucuman, La Rioja, Catamarca, Slata, Jujuy
Cuyo: Mendoza, San Juan, San Luis
Patagonia: Rio Negro, Chubut, Santa Cruz, Tierra del


2 0 0 0 0 0 0 0-
o c- co o_ o WA N (V
0 0 0 0 0 0%0%



SQource: adapted from Beyhaut, 95-97.

ote&: Agricultural occupations include farmer, rancher,
fisherman, vintner and miner.

Regardless of elite attitudes and government policy

concerning land distribution, the majority of incoming

immigrants whose background could be ascertainedll had or

were seeking occupations in the agricultural sector. This

phenomenon held true until about 1915. Yet, for reasons

outlined above, opportunity in the agricultural sector was

severely limited, and most immigrants who did remain in the

agricultural sector became tenants or colonists. Colonists

potentially had the ability to eventually own their land,

but in fact contractual arrangements produced by the

established landholders and their agents made the real

opportunities for colonists hardly distinguishable from

those of tenants. In addition, many immigrants were

"golondrinas": migrant laborers crossing the Atlantic

seasonally between Europe and Argentina. Their numbers got

as high as 100,000 a year in the early 1900's. These

migrants could earn several times more in a season in

Argentina than in their native lands, but they were not

encouraged to stay.12 In some years, in fact, the impact of

seasonal emigration from Argentina could make for net

negative immigration, although this occurred when other

factors, such as Italian reservists returning for duty in

Italy during World War I, were also in play. In short, for

many immigrants, the agricultural sector did not provide the

opportunities for economic advancement, at least in terms of

proprietorship, that they might have hoped for.

Whatever the intent of government policy regarding

immigration, a population explosion occurred in the coastal

urban area and the littoral. The population grew at a rate

of 374% for the littoral provinces, 551% for Buenos Aires

province and 786% for the Federal Capital from 1869 to

1914.13 Hence, what government policy did effect was a

demographic shift which it did not necessarily anticipate.

Part of this shift was explosive urban growth, not only in

terms of the number of people living in urban areas, but in

the number of cities being created. While the majority of

urban units were small (under 20,000 persons), the

demographic shift was nonetheless startling. Over 2.5

million Argentines lived in cities larger than 20,000 by

1914 (See Table 4). In short, a nation which had been

roughly three-quarters rural in 1869 became two-thirds urban

by 1914. It was thus the urban sector of the economy which

would in actuality become the source of employment for most

immigrants to the greater Buenos Aires area. Immigrants who

had intended to become free-holding farmers became instead

the workers in the new urban society.14

The creation of a predominantly urban society meant more

than simply a geographic shift in population; it meant the

creation of a new culture. The old "creole" society, based

on a two-strata system composed of elites and the masses who

worked for them, was being replaced by a multiclass society:

one in which there were identifiable "middle sectors"



1869 1895 1914

Size of urban popu- popu- popu-
units lation # of lation # of lation # of
in thousands (xl000) units (xl000) units (xl000) units

2 19 258 53 522 105 1,557 311

20 99 52 2 295 7 697 18

100 499 187 1 327 2

500 999 663 1

1000 + 1,576 1

tals 497 56 1,480 113 4,157 332

Source-: Maeder, 562.
- - - -------------'---------------------
figjjxe: Maeder, 562.

between the elites and masses. These middle sectors were

distinct and separate from the traditional native groups not

only in terms of their economic activity but also in terms

of origin and outlook. But they were not homogeneous,

precisely because they were formed not of native Argentines,

but of the new immigrant groups from different cultures and

economic backgrounds. And they did not join the traditional

Argentine culture partly because of the limitations on their

opportunities to do so outlined above. Instead, they created

a new culture, distinct from and in some ways in competition

with the old.

This does not mean that the old culture was disappearing

or that the elites were being displaced, although their role

was being changed. The size and composition of the

landowning (and capital holding) elites remained more or

less constant, but they began to be

transformed from "an austere, republican elite into a

capitalistic oligarchy."17 They began to shift some of their

capital into the new urban market. Hence, while there was a

growing polarity between the traditional-rural and the

new-urban economies and societies, the dominant elites of

each sector were one and the same.18 There would eventually

be political repercussions stemming from this polarized

society, and the elites would be forced to respond, but, in

general, they continued to dominate the traditional economic

sectors as well as capital formation for the new economy.

Even the traditional rural economy was itself undergoing

a change because of the new immigrant groups. Especially in

the crop producing areas, tenancy and absentee ownership

became the norm. And in the traditional ranching areas, land

was fenced, production practices changed, and old social

roles were altered. As one author put it "nuestro gaucho

degenero en peon."l9 Foreign ownership of agricultural

production, never very large proportionately, declined from

about a third in 1887 to only a quarter by 1914.20 This

corresponds to a migration of immigrants in general from

farm to non-farm occupations. The proportion of immigrants

in the rural population steadily declined throughout the

alluvial era (See Table 5). In conjunction with increasing

concentration of control of the rural sector, the change in

the consumption markets with the emergence of the new urban

areas and the rise of new economic activities in those

cities demanded an alteration in what the rural sector


The fundamental changes in Argentine society, however,

occurred outside of either elite society or the rural

economy. They occurred rather in the creation of the new

urban middle sectors, whose members numbered about 50,000 in

1869 and well over 600,000 in 1914. The middle groups as a

whole grew from 11% of the economically active population as

defined in the national censuses to 30% during the alluvial

era.22 The middle sectors were composed of commercial and

FARM AND NON-FARM: 1857-1924

Years_ % Farm % Non-farm

1857-1870 76 24

1871-1890 73 27

1891-1910 48 52

1911-1924 30 70

Source: Table VIII in Gino Germani, "Mass Immigration and
Modernization in Argentina," in Horowitz, 299.

industrial managers, professional groups, shop owners and

other non-manual workers, and constituted the new factor on

the Argentine social and economic scene. In relative terms,

because of the influx of immigrant proprietors and workers,

the industrial and commercial sectors of the economy

experienced large-scale growth and the rural sector shrank.

The elites may have still controlled the capital, but

the new enterprises themselves were controlled by new

economic actors: some 80% of the enterprises remained in

foreign hands throughout the period from the 1880's to

1914.23 (See Tables 6 and 7.) It must be noted, however,

that many of these enterprises were small, employing only a

few persons. They produced for the domestic market (they

accounted for about 2/3 of it) rather than for the growing

export market. That market was not a "key sector in the

national economy of the time,"24 but it was one which was

growing in importance. New industries to supply new demands

were created, and with them new social groups of industrial

and commercial owners.

The urban middle sectors would make new demands on the

political system of Argentina as well. They wanted different

policies and different resource allocations: more education,

more industrialization, more infrastructure, more public

facilities. Earlier, the immigrants had felt that the source

of their welfare should come from the same laissez-faire

prescriptions as the liberal elites had proposed for most of


Economic Sector and Year

1895 1914
Industry Commerce Industry Commerce

Number of owners
(in thousands)
Native 4.5 11.5 15.8 24.3
Foreign 19.6 32.7 31.5 65.2

Number of employees
(in thousands)
Native 72.4 72.5 209.6 148.8
Foreign 103.3 47.4 200.6 170.1

Source: Visquez-Presedo, 139.


Native Foreign Total
Sector/Ye axrChangea (%) a.. (%) (%)


1895 23.7 13.2 36.9
1914 16.0 12.0 28.0

Change -30 -9 -24


1895 18.8 11.6 30.4
1914 18.9 16.6 35.5

Change +.5 +43 +17


1895 18.7 14.0 32.7
1914 19.0 17.5 36.5

Change +1.6 +25 +12

Sojrce: Beyhaut, 104

the 19th century. But, more and more in the early 20th

century, they began to believe that government action was

the means to achieve these ends.25 They remained a very

small proportion of the electorate, even after the electoral

reforms of 1912, but they would make themselves heard in the

political arena soon afterwards.26 The changes they sought

would not be accomplished easily or without turmoil.

The demand for change came earlier and more clearly from

working class sectors and labor organizations.27 As will be

discussed in Chapter Three, Argentina's place in the world

market economy was being drastically altered during the

alluvial period. Infrastructure to move Argentina's goods to

Buenos Aires and thence overseas was being developed in the

late 19th century, involving railroads, port facilities,

food processing plants, and other industries. The work force

for these increasingly critical industries was dominated by

immigrants, who often brought with them new ideas concerning

labor organizations.28 Not surprisingly, it was in

immigrant-dominated work places that organized labor

activities first became important.29

Immigrant labor tended to be influenced by European

doctrines of anarcho-sindicalism and socialism, creating

highly politicized worker-protection organizations. The

early unions tended to be craft oriented brotherhoods of

workers, with little hierarchy and no dues, protecting their

own workers and avoiding any link with the government or

established political parties.30 In the last decades of the

19th century, of course, there were no established political

parties with which to ally, with the exception of the

nascent Socialist Party. Loose-knit and competitive union

federations, such as the Federaci6n Obrera de la Republica

Argentina (FORA) and the Socialist dominated Confederaci6n

Obrera Regional Argentina (CORA) were founded in the 1890's

in an attempt to centralize and formalize labor efforts. The

FORA was more anarchist in approach, supporting a strategy

of general strikes and violence to bring about an increase

in labor power. The smaller CORA, fearing governmental

repression, tended to avoid confrontation, working instead

within the Socialist Party. Generally, the FORA view

dominated, and labor efforts tended to take the form of

strikes and agitation rather than political organization,

not surprising in view of the lack of political reform to

allow the new immigrants into the body politic.31

In spite of conflicts within labor, efforts at

mobilization were vigorous throughout the 1890's. The elites

and the government were willing to allow normal law

enforcement networks deal with violence and were content to

do little else. They were not willing to give labor

organization efforts any legal standing through legislation

of any labor codes. An effort to create a general labor code

was voted down by the Camara de Diputados, and labor leaders

themselves opposed the bill, fearing governmental

interference in unionizing efforts.32

In general, the government viewed problems with labor as

part and parcel of general immigration problems: a disease

originating from outside. In 1902, Argentine workers were

inspired by the Barcelona general strike and called the

first general strike in Argentine history. The response of

the Argentine government combined a growing fear of labor

and left-wing agitation with a suspicion of immigrant

groups. The Ley de Residencia (Ley 4144), passed by both

houses of the Argentine legislature on November 22, 1902,

gave the president extraordinary powers to curtail the

activities of labor. The president was not given any special

powers to control strikes or violence; these were considered

to be already available under the state-of-seige clause of

the constitution. Rather, the target of the law was the

immigrant community itself. The president could expel any

foreigner who threatened national security or public order

and, further, could bar entrance to Argentina of any

foreigner whose "antecedents" suggested he might be a

threat. The link between labor unrest and foreigners was

clear, at least to the Argentine government. The real issues

of labor problems in a changing economy were not


The Ley de Residencia did not halt labor agitation or

unrest, however, and efforts at organizing and violence

continued. A peak of sorts was reached during the

celebrations of the national independence centennial in

1910. The FORA announced plans to "sabotage" government-

sponsored celebrations several days prior to the May 25

date. The attack on the national pride of Argentina which

the planned protests seemed to constitute galvanized

middle-sector support for government repression. Many in the

middle sectors had worked their way up from working class

origins. They had a stake in the system and had become

highly nationalistic.34 A week before the scheduled

celebrations, "mobs of young hoodlums swarmed into the

streets of Buenos Aires" and sacked the headquarters of

FORA, CORA and the Socialist Party, as well as the

newspapers La Protesta (anarchist) and La Vanguardia

(socialist) .35

As a result, the government was moved to consider

additional sanctions against the immigrant-labor nexus. On

June 28, "in the space of a few hours after a bomb exploded

in Buenos Aires' Teatro Col6n," the Ley de Defensa Social

was enacted.36 It extended the provisions of the Ley de

Residencia to include organizations as well as individuals.

Any organization propagating anarchism could be banned by

executive order. In subsequent action, the government

outlawed FORA. Until the emergence of a new government after

1916, this effectively quieted overt labor activity.

Anarchist agitation declined, while the strength of the less

violent socialists increased.37

By the second decade of the twentieth century, then, new

social and economic realities faced Argentina. The "creole"

society of patrons and peones had been replaced by a

complex society of established native elites trying to

control a growing urban immigrant society with different

economic motives and political beliefs. Non-creole

majorities in some sectors were bound to make demands and

they would become a new source of power with which the

established elites--willingly or otherwise--would have to


The new economic order was already manifesting itself,

with long-term and important effects (to be discussed

later). The new political order, however, would take a bit

more time to emerge, because while society and the economy

were expanding, not only in the aggregate but also in terms

of incorporating additional groups and sectors, the

political mechanism remained closed.38 The same elite who

had tolerated, managed and sometimes abetted the shift in

Argentine social structure was initially unwilling to

tolerate any political changes. "A tightly restricted civil

oligarchy dominated by the great landowners" still

controlled the government.39

The predominant political attitude of the ruling elite

has been characterized as "conservative" or "aristocratic"

liberalism.40 Liberalism--in the sense of a desire for

expanding economic opportunity and productivity--was

combined with a determination to maintain tight control of

that development. The idea of centrally directed economic

growth was combined with a commitment to keep the controls

firmly in the hands of those who had held them all through

the 19th century, and

the members of the oligarchy believed that
political power belonged to them by right and,
furthermore, that it was patriotic not to
surrender it to the men emerging from the
creole-immigrant mass.41

The attempt to promote economic development yet retain the

reigns of political power produced a system heavily

dependent upon central authority and restricted to a small

group of actors. The executive branch of government kept

itself in power by controlling and manipulating the

electoral mechanism, especially through the widespread use

of fraud.42

Yet the necessity of promoting economic development led

to conditions which would eventually undermine the elite's

position. The same immigrants who were necessary to provide

the skills and labor of the growing economy, also provided

a potential power base for new political forces. The same

educational policies followed since the Presidency of

Domingo F. Sarmiento (1868-74) created a literate mass

capable of political action.43 The elite found itself in a

contradictory and deteriorating situation. It was dependent

on the masses, but refused to acknowledge that dependence

or to share political power.

Because of its attitude toward the
creole-immigrant mass and because of its marked
tendency to pull in and close its ranks, the
oligarchy gradually weakened its foundations
without most of its members noticing the fact.44

The new socio-economic groups were diverse in origin

and status: landowners of the upper littoral, forwardly

mobile aristocrats from the interior who had not benefited

from the export economy, the large dependent groups of

rural tenants, and native and immigrant urban middle

sectors. In many ways, these groups were equally committed

to the liberal ideas of progress and expansion and

supported the same economic system as the elite. They were

not revolutionary. They did, however, have distinct

economic goals.

The growth of organized labor has already been

mentioned. The middle sectors, often composed of native

sons of immigrant labor groups, may have been tied to the

same export-oriented economy as the elite, but they sought

expanded economic and political opportunity in urban

society. They wanted expanded professional opportunities to

be provided from increased governmental and business

activity which the establishment seemed unwilling or unable

to provide. These groups would form the core of a new

popular-based political force, bent on reform of the

political system, which emerged in the late 1800's.45

Just as there was a difference in origin among the

social groups, so there was diversity among the political

movements emerging from them. Anarcho-sindicalism gained

support among workers, as has been noted. The Socialist

Party was founded by Juan B. Justo in 1896, gaining most of

its early support in the working districts of Buenos Aires.

And, in 1889 a civic youth organization--the Uni6n Civica

de la Juventud (UCJ)--was founded in Buenos Aires as a

protest movement against the corruption of conservative

government. The UCJ had broader appeal to the middle

sectors of urban society, indicated by the fact that in

April of 1890, it was converted into an active political

party--the Uni6n Civica (UC)--to be a focus of opposition

to the government of Miguel Juarez Celman (1886-1890).

While these various political organizations made different

appeals to urban society, they tapped a common desire to

challenge the established political order.46

The opportunity for a united challenge was presented by

a political and economic crisis at the end of Celman's

regime in 1889. Celman had attempted to construct a

personalist regime, dominating not only the national and

local machinery of government, but also the established

conservative National Autonomous Party (PAN).47 His play

for power had alienated not only popular-based groups, but

members of the PAN as well, including Carlos Pellegrini,

the influential former cabinet minister from Buenos Aires,

and the party's founder and former president of the nation,

General Julio Argentino Roca.48

President Celman had other problems. The Argentine

economy was in a crisis, following a binge of speculation

which affected almost everyone (this will be covered in

more detail in the next chapter). And Celman himself had

become the symbol of all that was corrupt in the

conservative regime. In July of 1890, a revolt by members

of the military and supporters from the popular groups

including the UC (which had just issued a manifesto for

revolution) broke out. It was quickly put down, but faced

with rebellion from within the PAN as well as without,

Celman resigned the presidency in favor of Carlos


The "Revolution of 1890" led to more than Celman's

resignation. It resulted in the emergence of the UC as the

focus of popular struggle against the conservative regime.

The party's call for honesty and faithful representation in

government had tremendous appeal for the middle sectors,

although less for the more radical labor groups. And the

leadership of the party was filled with illustrious

persons: Leandro Nicebro Alem, ex-president Bartolome

Mitre, the governor of Buenos Aires Province Bernardo de

Irigoyen, and Alem's nephew Hip61ito Yrigoyen, among

others.49 Although the UC was clearly in opposition to the

government, it is hard to conceive of the party as

particularly revolutionary. The leadership included much of

the. elite of Buenos Aires city and province, disaffected

from the mainstream conservatives (some of them were ex-PAN

members), but not immigrant anarchists. Their interests lay

not in overthrowing the system but in taking it over.50

To this end, Mitre effected a deal with General Roca in

1891 to bring the Buenos Aires rebels back into the fold by

combining the two national leaders in a presidential ticket

under a new alliance: the Uni6n Civica Nacional (UCN).

While this move may have had some practical attractions, it

was seen as an unprincipled compromise by the more

ideological of the UC's leaders, especially Alem and

Yrigoyen. The 1891 "accommodation" resulted in a split in

the UC, with Alem and his followers declaring against the

deal and announcing a program of "relentless struggle" on

principle against the corrupt established regime.51 Thus

was established the Uni6n Cfvica Principista (UCP). The

principle of moral government demanded the UCP's abstention

from the corrupt electoral process at this time, but the

strength of the new faction still threatened to upset a

smooth transition of power. Partly as a result, Mitre and

Roca withdrew themselves from the impending presidential

elections. However, they arranged a coalition instead

around the candidacies of Luis Saenz Pena and Jose E.

Uriburu which won the 1892 elections.

Unable to effect change through the electoral process,

and committed to objectives that were incompatible with

contemporary political rules, the Radicals, as they were

now tagged by the Mitre-Roca group, developed a strategy

which was to serve them for the next two decades. They

combined armed insurrection with abstention from the

established political process. This intransigent policy

combined moral indignation with action in the only way

possible for a group committed to the belief in the

immorality of Argentine elections. The results of this

policy were mixed. Two attempted revolts in 1893 and 1895

failed, but the leaders escaped prosecution partly because

of increasing popular support for their program..52 The PAN

continued to dominate elections, but the steadily growing

UCR presence once again combined with factionalism within

the PAN to produce a breakthrough in the political process.

The prosperity which the country had come to enjoy,

combined with the knowledge that the leaders of the

radicals really were not so different from themselves,

allowed at least some conservatives to consider gradual

electoral reform. They would co-opt the Radicals into

becoming a "loyal opposition"53 with the conservatives

retaining a majority in the elected houses. As long as the

Radicals abstained from political participation, the need

for this particular solution to the problem may have

appeared less urgent, but a series of events in the early

1900's began to make the option more attractive.

In one episode, Carlos Pellegrini, as Minister of the

Interior in Roca's second term as president, "was suddenly

made aware of the new importance and power of public

opinion" in handling the national debt. He had worked out a

deal to consolidate and refinance Argentina's sizeable

foreign debt by putting her customs revenues up as

collateral. This affront to national pride created an

uproar sufficient to make Roca disavow both the plan and

Pellegrini.54 Nationalist sentiment--especially widespread

in the same middle sectors which were the base of power of

the UCR--had shown itself to be strong enough to affect

government policy.

In another instance, Joaquin V. Gonzalez, who succeeded

Pellegrini as Minister of the Interior, sponsored a law

which brought about a small measure of electoral reform. It

eliminated complete lists, under which all the seats in

multi-member districts were competed for in a single unit,

and replaced them with single-seat electoral districts.55

Although the law clearly undermined conservative control of

elections, it was passed in 1902 and indicates that the

reformist wing of the PAN was gaining the ascendancy. In

addition, there was another aborted Radical revolt in 1905,

indicating once again that the opposition movement was not

going to disappear.56 The appeal of electoral reform was

growing stronger--not so much for its own sake but so that

the PAN could continue to "rule without repression" and

even generate a measure of "mass support".57 The anti-Roca,

reformist wing had gained the presidency in

1904, with the election of Manuel Quintana, and on his

death, Jose Figuero Alcorta, another supporter of reform,

became president in 1906. He arranged for Roque Saenz Peia

to become his successor in the 1910 elections and it was

this younger Saenz Pena who undertook to bring about

fundamental electoral reform.

Saenz Pe'na at first offered Yrigoyen a post in his

government in an attempt to subsume the Radical movement,

but he was rebuffed. It was becoming apparent that only the

opportunity to participate in legitimate elections would

calm the intransigents. The key to the reform was to force

the Radicals into acceptable behavior: that is to say,

voting. In as much as the Radical and conservative leaders

were not dissimilar in social backgrounds, and since the

PAN machinery was so solidly entrenched, accommodation

seemed to carry little risk. In addition, the radical

movement itself was hardly monolithic in its extremism, and

had worked out accommodations with conservative regimes on

the provincial level.59 If a way could be found to bring

the Radicals into national electoral politics, and if the

majority party (assumed to be the PAN) could maintain a

solid majority in the elected houses, then the Radicals

could be denied real power and yet placated all in one

move. There were genuine reformers within the government

whose outlook was not so cynical,58 but, in any case, it

seemed that reform without revolution was both possible and


The Electoral Reform Law of 1912 managed to accomplish

this. It allowed for permanent registration which would

lessen fraud and allow more Argentines to participate, thus

giving the Radicals the electoral clout for which they had

fought. But the requirement for compulsory voting, while

carrying no severe penalties, promised to force the

Radicals into legal forms of protest. More extremist

parties, such as the Socialists, on the other hand,

represented in large part non-voting immigrants which would

not become an electoral threat. And, the process of the

"incomplete list" giving two-thirds of the seats from a

province to the majority party, one-third to the runner-up

party, and none to third parties,60 would assure PAN rule

with a loyal, or at least co-opted, Radical minority. Of

course, effective male suffrage would be required to allow

enough Radical voters to participate to implement the

scenario. It was the awareness of the Radical threat and

the need to control it that allowed the law to pass; belief

in the virtues of electoral politics or a respect for the

wisdom of Argentine voters was not necessary.

However, events did not progress quite according to

scenario. The UCR captured a few congressional seats and

remained a small minority until 1914. But, after that year,

the UCR, along with other reformist parties such as the

Socialists and Progressive Democrats, began to increase

their number of elected national representatives.61 New

registrations apparently yielded more Radical than PAN

voters. Also in 1914, Roque Saenz Pena, having become a

reformist hero and having had the electoral reform law

named after him, died. This may have upset the normal

succession mechanism, for the 1916 national elections

produced real surprises. In congressional elections, the

combined Radical, Socialist, and Progressive Democrat

forces captured a majority of the seats in the Camara de

Diputados for the first time. In the presidential

elections, the Radicals captured the Presidency in their

first legal try with 45.6% of the vote and widespread

support for an Yrigoyen--Pelagio B. Luna ticket.62

While surely surprised, the conservatives were not

particularly worried. Was not the leadership of the

Radicals--was not Yrigoyen--a faction of the same elite

which had ruled since 1880? Was not the export-led economy

performing at record levels? Was not stability the goal of

all? While much has been made of the victory of the

Radicals ushering in a new age of Argentine politics, the

next chapters will suggest that in essence the

conservatives were correct.

IThe term is used by Jose Luis Romero as the title to
Part Three of A History of Argentine Political Thought.
Trans. Thomas F. McGann (Stanford: Stanford University
Press, 1963), 165.

2For statistics and analyses of Argentine demographic
growth during this period, see the following: Carlos F. Dfaz
Alejandro, Essays on the Economic History of the Argentine
Republic (New Haven: Yale University Press, 1970), 23-24;
Sociedad Rural Argentina, Anuario de la Sociedad Rural
Argentina: estadfsticas econ6micas y agrarias (Buenos Aires:
Luis L. Gotelli, 1928), 59-64; and Gilbert Wilson Merkx,
"Political and Economic Change in Argentina from 1870 to
1966" (Ph.D. dissertation, Yale University, 1968), Ch. 5.

3Studies of immigration and its impact on Argentine
society are numerous and varied. Some emphasize economic
factors, some sociological change. Some tend to focus on and
criticize the absence of governmental policy, and others are
concerned almost solely with demographic impact. Almost all,
however, are in agreement that immigration was one of the
key factors in the series of social, economic and political
changes which occurred in Argentina during this period. Some
of those studies (and specifically those used for this
dissertation) include the following: Gustavo Beyhaut, et al,
"Los inmigrantes en el sistema ocupacional Argentino," in
Torcuato di Tella, eLt al, Argentina, sociedad de m sas
(Buenos Aires: EUDEBA, 1971), 85-123; Roberto Cortes Conde,
El proareso Argentin 1_880-114 (Buenos Aires: Editorial
Sudamericana, 1979), 240-270; Gino Germani, "Mass
Immigration and Modernization in Argentina," in Irving Louis
Horowitz, ed., asses in atin America (New York: Oxford,
1970), 289-330; Ernesto J. A. Maeder, "Poblaci6n e
inmigraci6n en la Argentina entire 1880 y 1910" in Gustavo
Ferrari and Ezequiel Gallo, eds., La Araentina del ochenta
al centenario (Buenos Aires: Editorial Sudamericana, 1980),
555-575; Jose Luis Romero, Ch. 6; James R. Scobie,
Revolution n the PampasA Social History of Argenti ne
Wheat. 1860-1910 (Austin: University of Texas, 1964), Ch. 3
and 7; Carl Solberg, "Immigration and Urban Social Problems
in Argentina and Chile, 1890-1914," Hispanic American
Historical Review, 49: 2 (May, 1969) 215-32; two

works by Richard J. Walter: "Politics, Parties, and
Elections in Argentina's Province of Buenos Aires, 1912-42,"
Hispanic American Historical Review, 64: 4 (November, 1984),
707-35, and "The Socioeconomic Growth of Buenos Aires in the
Twentieth Century" in Stanley R. Ross and Thomas F. McGann,
eds., Buenos Aires: 400 Years (Austin: University of Texas
Press, 1982), 66-126; and Vicente Vazquez-Presedo, El caso
Argentino: migraci6n de factors, comercio exterior y
desarollo, 1875-1914 (Buenos Aires: EUDEBA, 1971), Ch. 3.

4Various sources containing the text of the Constitution
exhibit disagreement on some particulars. For example,
concerning the text of Article 25, one source (Peaslee) uses
the term "encourage" regarding the government's obligation
towards immigration, while another (Fitzgibbon) uses
"develop". It is assumed that such differences are a
function of translation only. For constitutional references
and interpretations, see Austin F. MacDonald, "The
Government of Argentina," Hispanic American Historical
Review, 5: 1 (February, 1922), 52-82; Russell H. Fitzgibbon,
ed., The Constitutions of the Americas (as of January 1,
1948) (Chicago: University of Chicago, 1948) 12-31; and
Amos J. Peasley, Constitutions of Nations Vol. =V: The
Americas (The.Hague: Martinus Nijhof, 1970), 3-27.

5V5zquez-Presedo, 110.

6Scobie, Revolution on the Pampas, 123.

7Examinations of this persistent land-holding pattern
can be found in Diaz Alejandro, 151-159; Scobie, Revolution
on the Pampas, 114-121; CortEs Conde, El progress argentino,
149-188; and Vazquez-Presedo, Ch. 3.

8As calculated from the Argentine census of 1914 by Carl
Solberg in "Immigration and Urban Social Problems", 218.

9Scobie, Revolution on the Pampas, 125.

10Scobie, Revolution nthe Pampas, 131-132. Scobie also
gives special emphasis to the relationship between economic
cycles and immigration flow.

11Second- and third-class passengers, who comprised the
vast majority of immigrants, were subject to inspection and
interrogation by immigration officials. Part of this process
included ascertaining occupations.

12Scobie describes the lives of colonists, tenants and
golondrinas in BRevlution an the _ampas, 57-61.

13There is general agreement on these percentages since
they are derived from the Argentine censuses. These
particular figures are from Merkx, 72.

14The creation of an urban labor force was not
necessarily in contradiction with government policy. Labor -
rural or urban was relatively expensive in Argentina up to
the 1860's and '70's. Part of immigration policy tried to
encourage the immigration of persons to expand the general
labor pool, as opposed to the number of rural settlers. This
point is discussed in H. S. Ferns, Britain and Argentina in
the Nineenth Century (Oxford: Oxford University, 1960) ,

15VVzquez-Presedo, 139.

16Three works which deal with the shift from the old
society to the new are those cited by Germani and Romero,
and John J. Johnson's now famous Political Change in Latin
America: The Emergence of the Middle Sectors (Stanford:
Stanford University Press, 1958). The three quoted terms are
taken, in order, from Romero, 167, Germani, 303, and
Johnson, ix.

17Romero, 79.

18A good description of this dual elite can be found in
Thomas C. Cochran and Ruben E. Reina, Capitalism in
Argentine Culture_ Study of Torcuato di Tella andS.A.M
(Philadelphia: University of Pennsylvania Press, 1962),

19VVzquez-Presedo, 139.

20Comments on foreign ownership can be found in Diaz
Alejandro, 214-18; these figures are from Merkx, 90.

21This refers only to shifts in domestic consumption
patterns. The major influence on production in the rural
sector came from overseas markets. These will be discussed
in Chapter Two.

22These middle sectors were self-defined by respondents
to the census. A rural middle class comprised of small
landowners and managers existed distinct from the urban
middle sectors. As a proportion of the economically active
population the rural middle class shrank during this period,
although it grew in absolute terms from 46,542 in the 1869
census to 56,110 in 1914. See Merkx, 88.

23Merkx, 90.

24Germani, 303.

25For a description of the desires of the middle
sectors, see Johnson, 4-11 and Chapter 6; Milton I. Vanger,
"Politics and Class in Twentieth-Century Latin America",
Hispanic American Historical Review, 49: 1 (February, 1969),
81; and Walter, "Politics, Parties, and Elections".

26Walter discusses the shift in the electorate in Buenos
Aires province and emphasizes how few of the foreign born
became voters in "Politics, Parties, and Elections", 714.
27 The origins and development of the labor movement in
Argentina, as distinct from the general phenomenon of
immigration and the rise of the middle sectors, are covered
in the following works: Robert J. Alexander, Organized Labor
in Latin America (New York: Free Press, 1965), Ch. 4; Samuel
L. Bailey, Labor. Nationalism, and Politics in Argentina
(New Brunswick: Rutgers University Press, 1967), Ch. 1;
Thomas E. Skidmore, "Workers and Soldiers: Urban Labor
Movements and Elite Responses in Twentieth-Century Latin
America," in Virginia Bernhard, ed., Elites, Masses. and
Modernization in Latin America. 1850-1930 (Austin:
University of Texas Press, 1979), 79-126; and Richard J.
Walter, The Socialist Party of Argentina, 1890-1930 (Austin:
University of Texas Press, 1977).

28There had been at least one union established in
Argentina before this time. The Printing Trades Workers'
Union of Buenos Aires was originally a workers aid society
founded in 1853. In the 1860's, it took on the trappings of
a real union, negotiating with employers over workers'
benefits and calling strikes. But this was the exception.
See Alexander, 35.

29Skidmore (92-93), especially, makes note of the
different labor characteristics caused by the "export
economy". It might be noted, however, that the same influx
of immigrants which provided the new labor force and the new
European outlook also insured that the labor supply was
large and "highly elastic to changes in real wages during
most years," so that the pressure on employers to accede to
labor demands was lessened. This point is made clear by Diaz
Alejandro, 23.

30There was an exception to these general
characteristics. La Fraternidad, the railroad workers union,
followed the model of United States unions: charging dues
which went for sickness and unemployment benefits and
remaining outside of the political struggles of the other
labor organizations. See Alexander, 36.

31Details of the development of the labor federations
and their conflicts can be found in Alexander, 36-37, and in
Chapter 3 of Walter, The Socialist Party.

32The bill was introduced into the Camara de Diputados
by Minister of the Interior Joaqufn V. Gonzalez in 1904. See
Bailey, 24-25, and Skidmore, 95-96.

33Bailey (p. 21) makes specific mention of the
inspirational nature of the Barcelona strike. See Solberg,
"Immigration and Urban Social Problems" (pp. 228-29) and
Scobie, Revolution on the Pampas (p. 125) for detailed
discussions on attitudes towards immigrants and their
connection to the Ley de Residencia. As for the law itself,
it was introduced by Miguel Cane, a conservative senator,
and remained on the books until the presidency of Arturo
Frondizi (1958-1962) Several hundreds, perhaps thousands,
of immigrants were deported under its provisions, and even
native Argentines were sent to internal exile in Patagonia
in some cases. See Walter, The Socialist Party, 45 and 247,
and Alexander, 37.

34Both Johnson and Romero discuss the differences
between workers and the middle sectors and the importance of
nationalist sentiments within the latter. See Chapters 1 and
6 respectively. See also Bailey, 33-34.

35Alexander, 37-38.

36Walter, The Socialist Party, 45-46.

37The 1910 episode is covered in detail by Alexander
(37-38), Bailey (25-27), Skidmore (96-97), and Walter, The
Socialist Party (45-46).

38Some of the works previously cited in this chapter
deal with the political developments which accompanied the
social changes already discussed. They include the works by
Bailey, Cortes Conde, Johnson, Merkx, Romero, and Walter. In
addition to those, there are several works which deal more
exclusively with the politics of the alluvial era, although
some of them by necessity also touch on topics covered
Several sources cover general political developments of
the period. They include Natalio R. Botana, El orden
conservador: la pol~tica argentina entreL880 y 1916 (Buenos
Aires: Editorial Sudamericana, 1979); Juan Eugenio Corradi,
"Argentina," in Ronald H. Chilcote and Joel C. Edelstein,
atin America: the Struggle with Dependency and Beyond (New
York: John Wiley and Sons, 1974), 305-407; Eduardo Crawley,
A House Divided: ArUentina,_L_ 0-19j8 (New York: St.
Martin's Press, 1984); Roberto Etchepareborda, "La

estructura socio-politica argentina y la generation del
ochenta," Latin American Research Review, 13: 1 (1978) ,
126-134 ; H. S. Ferns, Argentina (New York: Praeger, 1969);
George Heaps-Nelson, "Argentine Provincial Politics in an
Era of Expanding Electoral Participation: Buenos Aires and
Mendoza, 1906-1918" (Ph.D dissertation, University of
Florida, 1975); John A. Peeler, Latin American Democracies:
Colombia. Costa Rica, Venezuela (Chapel Hill: University of
North Carolina, 1985) especially the introduction, "The
Theory and Practice of Liberal Democracy," 3-41; Karen L
Remmer, Party Competition in Argentina and Chile: Political
Recruitment and Public policy. 1890-1930 (Lincoln:
University of Nebraska Press, 1984); Jorge Abelardo Ramos,
Revoluci6n y contrarrevoluci6n en la Argentina (Buenos
Aires: Editorial Del Mar Dulce, 1970); David Rock, ed.,
Argentina in the Twentieth Century (Pittsburg: University of
Pittsburg, 1975); two works by Peter H. Smith, Argentina and
the Failure of Democracy: Conflict among Political Elites.
1904-1955 (Madison: University of Wisconsin, 1974) and
Politics and Beef in Argentina: Patterns of Conflict and
change (New York: Colombia University Press, 1969); and
Peter G. Snow, Political Forces in Argentina (Boston: Allyn
and Bacon, 1971).
Other works which deal more specifically with the
Radical party include Gabriel Del Mazo, El Radicalismo:
ensayo sobre su historic doctrine (Buenos Aires: Ediciones
Gure, 1957); Ezequiel Gallo, Colonos en armas. Las
revoluciones radicals en la provincia de Santa Fe (1893)
(Buenos Aires: Editorial del Instituto, 1977); Ezequiel
Gallo and Silvia Sigal, "La formaci6n de los partidos
politicos contemporaneos: La Uni6n Cfvica Radical
(1890-1916)," Desarrollo Econ6mico, 3: 1/2 (Abril-
Septiembre, 1963), 173-230; Lauro Lagos, Doctrina y acci6n
radical (Buenos Aires: 1930); Felix Luna, Yriaoyen (Buenos
Aires: Editorial Desarrollo, 1964) and as editor, "Noventa
anos de radicalismo" Todo es Historia: Ntmero Especial, 15:
170 (July, 1981); Rudolfo Puiggros, El Yrigoyenismo (Buenos
Aires: Editorial Jorge Alvarez, 1965); three studies by
David Rock, "Machine Politics in Buenos Aires and the
Argentine Radical Party, 1912-1930," Journal of Latin
American Studies, 4: 2 (November, 1972), 233-256, Politics
in Argentina: The Rise ancd Fall of Radicalism (Cambridge:
Cambridge University Press, 1975) and "The Rise of the
Argentine Radical Party (the Unin _Cvica Radical) ,
1891-1916," Cambridge: Cambridge University, Centre of
Latin American Studies, Woking Papers No (n.d.); Carlos
J. Rodrfguez, Irigoyen; su revolution political y social
(Buenos Aires: Libreria y Editorial "La Facultad", 1943);
Peter H. Smith, "Los Radicales Argentinos y la defense de
los intereses ganaderos, 1916-1930," Desarrollo Econ6mico,
7: .25 (April-June, 1967), 795-829; Peter G.Snow, Argentine
Radicalism: The History and Doctrine of the Radical Civic

Union (Iowa City: University of Iowa Press, 1965); and David
Tamarin, "Yrigoyen and Per6n: The Limits -of Argentine
Populism" in Michael L. Conniff, ed., Latin American
Populism in Comparative Perspective (Albuquerque: University
of New Mexico Press, 1982), 31-45.
Two works dealing with particular aspects of the period
are Edgardo L. Amaral, Lisandro de la Torre y la political de
la reform electoral de SenzPea. (Buenos Aires: 1961);
and Darlo Canton, Argentine Parlementarians in 1889. 1916.
and 1946 (Buenos Aires: Instituto Torcuato di Tella, 1966).
All these have provided the framework for the coverage
of political developments which follows.

39Peeler, 25.

40Romero uses the term "conservative liberalism:" Merkx
uses "aristocratic liberalism."

41Romero, 180-81

42The endemic nature of fraud in the Argentine political
process has been noted by several scholars, including Walter
in "Politics, Parties, and Elections", 721, and Rock,
Politics in Argentina, 26,29.
In an interview in 1902, Carlos Pellegrini, ex-
President, described the following episode (from Joaqufn V.
Gonzalez, La reform electoral Argentina 1903> as cited by Dario Canton in Argentine Parlementarians.
I remember that when I was a boy. .even before
being able to vote, the custom had it that the struggle
was limited to taking possession of the tables;
this was the preliminary act of the election, and once a
party was in possession of a table, the election was by
this very fact over: everybody knew that party would
What was the basis for saying that? The very simple
fact that fraud was accepted and admitted as a regular

43A description of these educational reforms and their
impact can be found in Merkx, 76-79.

44Romero, 199.

45The socio-economic makeup of the Radicals is discussed
by Walter "Politics, Parties, and Elections", 717-18 and in
detail by Gallo and Sigal, 198-207. Rock emphasises the
non-revolutionary nature of the middle sectors and the UCR
in Politics in Argentina, 19-24. Tamarin examines the
relationship between populism and the radicals, claiming
that "Radicalism is a classic representative of 'reformist
era' populism" on page 31 of "Radicalsim and Per6n."

460n the origins of the UCJ and the Uni6n Civica, see
Rock, Politics in Argentina, 41. On the early Socialist
Party, see Walter, The Socialist Party, Ch. 1 and 2.

47Gallo, Colonos en armas, 21-22.

48Rock, Politics in Argentina, 30

490ther personages included Vicente Fidel L6pez and
Arist6bulo del Valle, making up the "old elite" element of
leadership of the Radicals. See Romero, 209-10

50Rock and Smith, among others, emphasize this point.
See Rock, Politics in Argentina, 32, and Smith, Argentina
and the Failure of Democracy, 9.

51Romero, 212.

52How much support was actually due to Radical programs
is debatable. Both Gallo and Scobie point out that the 1893
revolt in Santa Fe had more to do with combatting the local
PAN elite, than with supporting the Buenos Aires radicals.
See Colonos en armas, 82, and Revolution on the Pampas, 154.
Nevertheless, it was the Radicals who benefited.

53This point is made by Smith, Argentinaand the Failure
of Democracy, 10.

54It is Rock's contention that this episode moved
Pelligrini to the side of the reformers. He also points out
the connection between nationalist issues and the middle
sectors, as does Johnson. See Rock, Politics in Argentina,
33, and Johnson, 96-97. Nationalist sentiment also played a
part in the passage of the Ley de Residencia of the same
year. It would seem that this law, given the emerging class
structure of Argentina, was more a palliative to the
emerging native middle class than to the older elites.

55As a result of this reform, district four, containing
working class portions of Buenos Aires, elected the first
Socialist deputy, Alfredo L. Palacios, in 1904. See Walter,
The Socialist Party, 73-74.

56Pellegrini, in fact, helped campaign for amnesty for
the Radical rebels. See Romero, 201. Oddly enough, in a
political system dominated by the presidency, Article 67,
Section 17 of the Argentine Constitution gives the power of
amnesty to congress.

57Rock, Politics inArgentina, 34.

58Romero (pp. 200-201) points out that genuine reformers
were to be found within the conservative ranks.

590n the differences between the mainstream Radicals in
Beunos Aires and elsewhere, specifically Mendoza, and on
accommodations reached with the conservative regime, see
George Heaps-Nelson, Ch. 3-5.

60Single-seat districts had been rescinded in 1910. See
Walter, The Socialist Party, 248 (fn. 4).

61For specific statistics on elections from 1912 to
1916, see Darfo Cant6n, Materiales para el studio de la
sociologia polftica en la Argentina. Vol I (Buenos Aires:
Institute Torcuato di Tella, 1968), 35-37.

621tid., 85-86.


The social and political changes of the alluvial era

were significant, in that they produced at least the

appearance of a new society. Even more significant for

Argentina, both at the time and for the future, were the

economic changes which accompanied and sometimes drove those

social and political developments. The economic progress

enjoyed by Argentina in this period is unparalleled in Latin

America and approaches what occurred in Europe and the

United States during the same period. Argentina developed

from a pastoral world backwater in 1880 to a leader in the

world agri-commodities market by the beginning of the First

World War. Argentina's economy entered a golden age of

progress and expansion.

The period has also been termed "la bella 6poca". Many,

extend this period of economic expansion and productivity

past the first world war, sometimes as far as 1930.1 Often,

the years of Radical party governments from 1916-1930 are

seen as part of, and even the capstone of this epoch.

As outlined in the previous chapter, the normal approach to

the period after the unification of Argentina and the

federalization of Buenos Aires is to see it as one of steady

--sometimes even spectacular--economic growth coupled with

the gradual expansion of political opportunity. The period

ends with the "revolution of 1930" which is seen as the

death knell of what had been political development in the

same way as the world depression is seen as the demise of

Argentina's economic miracle. The half-century from 1880 to

1930, then, is seen as a package of progress--a classic

example of political and economic development--which was cut

short by economic and political violence.2

There are no aggregate figures, such as Gross National

Product or Gross Domestic Product, to measure Argentine

economic growth before 1900.3 Import figures, however, show

that there was steady expansion of the Argentine economy at

least as indicated by increasing imports from overseas trade

from the early 1870's to 1889. Total imports more than

tripled from 49,125,000 pesos oro in 1870 to 164,570,000 in

1889. The economic crisis of 1890, which was integral to the

Juirez Celman resignation fiasco (see previous chapter)

halted this steady growth. Imports fell to a low of

67,208,000 pesos oro in 1891 and then began a slow climb

reaching 1890 levels in the early 1900's.4 The crisis of

1890 was severe, but its effects were not long-lived.

After 1900, indexed figures for the Gross Domestic

Product (GDP) have been calculated and are represented in

Figure 2. With the exception of WWI and the postwar recovery

period from 1914 to 1920, these figures too show a steady

growth in the Argentine economy even in real terms as

measured by fixed values of 1950 pesos. The Argentine

economy grew almost four fold in the last 30 years of the

"Golden Age".

Per-capita GDP shows a considerably less impressive

expansion--a little over 50% for the period--lessening the

personal impact of economic growth. This is due, of course,

to the massive immigrant-fed population growth which

Argentina experienced in the same period and which at least

partly fueled that economic expansion. Even so, the overall

record for the period as a whole is impressive.

Other authors view Argentina's development over the 50

years from 1880 to 1930 as a series of different stages, not

all of which are as positive as the period as a whole.

Especially during the Radical period, some analysts perceive

a malaise, or at least a slowdown of economic development.

Argentina ceased being an "expanding open export economy"

and became a "stationary open" one: Argentina "marked time

economically."5 In similar fashion, it has been argued that

Argentina reached a "state of maturity" after the First

World War when growth slowed,6 or worse, simply stagnated in

a pattern of "delay" until the economic collapse of the

!iilmniinTni Tf


441W4 I JT4R14 7 I44thi? if H I 4iIi i

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Source: Merkx, 43 and Randall, 2-3.

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i EI


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wtti y

1930's.7 Hence, economic developments in Argentina were not

smooth and harmonious, but somewhat unstable.8 In fact, as

Table 8 shows, some important indicators of economic

progress actually peaked rather early in the period, to be

followed by actual decline in the 1920's, preceding the

collapse of the 1930's. These indicators suggest that the

golden age ended earlier than sometimes acknowledged.

Regardless of differing opinions of the exact

periodicity and pace of development, it is clear that at

least some portions of the half century witnessed an

extraordinary performance by the Argentine economy.

Beginning as early as the 1860's the productive potential of

Argentina began to be recognized by possible customers and

investors in industrializing Europe. From 1850 to 1880, the

value of Argentine exports grew at a rate of 7.4% annually

as exports from the Littoral of Argentina became

increasingly important.9 The election of Bartolome Mitre as

President in 1862 marked the beginning of Argentina's

purposeful and methodical entry into the "international

commodity and capital markets" and was followed by a period

of economic expansion through the 1870's.10 Once national

consolidation became a reality in 1880, this potential began

to be fulfilled and Argentina underwent a period of

sustained economic growth until the Baring crisis of 1890.

The crisis, named after the large and established

British investment firm which was heavily involved, did not




Total Investment as % of GDP 1907
New investment per capital 1910
Total fixed investment per capital 1912
New foreign investment 1913
Total foreign investment 1913


Rate of population growth 1906
New railroad mileage 1911
Number of immigrants per year 1912
Land under cultivation 1914


Price of beef (Linears Market) 1919
Exports per capital 1920
Total foreign trade 1920
Total imports 1920
Beef exports (tons) 1924


Domestic beef consumption per capital 1923
% increase in GDP (post war) 1923
GDP per capital 1929

Source: Both the choice of indicators and the years are
from Merkx, 129.

have a lasting impact in that the Argentine economy

recovered and experienced even greater growth after 1890.

The crisis did, however, point up some characteristics of

the economy which would haunt subsequent Argentine

development. The first characteristic is that of heavy

reliance upon foreign investment to produce capital

infrastructure. Argentina had relied almost exclusively on

foreign money ever since the 1850's for capital investment

needs, and when an orgy of speculation and over-borrowing by

large and small investors caused foreign funds to dry up,

Argentina faced a fiscal crisis. Argentina's credit

reputation, currency value, and exports all suffered.11

Perhaps more importantly, the crisis pointed out a

chronic and unhealthy situation in the economy. Argentina

depended upon foreign investment and earnings from exports

to secure the funds needed to buy the imports which would

fuel development. It also relied on the customs duties

levied on imports to provide the government with revenues to

run the country. Argentina suffered a continual lag between

what she could earn from exports and what she needed to

import. And, state expenses and state revenues stayed out of

balance. Hence there was pressure to maintain high import

duties to pay government expenses including debt service.

But this made the costs of imported goods necessary for

development more expensive and necessitated even higher

levels of exports to balance imports. This situation existed

before the Baring crisis, but was made most clear in 1890.

In order to escape this vicious cycle of revenue
shortages, borrowing abroad, and the inability to
face long-term payments, the country needed to
increase exports and obtain more foreign exchange
in gold. Increased exports would allow the
government to buy gold inexpensively and meet its
outstanding loan obligations.12

Argentina avoided total collapse in the 1890's partly

because it had just gone off the gold standard in 1885. In

addition, the government budget was cut, and the world

exports market fortuitously improved. The volume of exports,

if not the price, increased dramatically in the 1890's and

Argentina was able to climb out of the crisis. In fact,the

period after 1890 and continuing to the First World War, at

least, saw the most dramatic growth rates of the whole


It may be that aggregate growth is not the critical

characteristic in an assessment of the Argentine economy.

Possibly more important are the structural changes in

economic development during the period. Not only was the

value of production in Argentina increasing, but the source

of that value was changing too. After 1900 agricultural

activities, while important, were declining as a share of

Argentina's economic production and the industrial sector

was growing. As a percentage of the GDP from 1900 to 1929,

the production of the rural sector slipped from 38.1 to

30.9. At the same time, the contribution of the industrial

sector rose from 12.9 to 16.5 and the service sector grew

from 49.0 to 52.6. The apparent shift from agriculture to

industry might be somewhat exaggerated in these figures and

the shift is not large anyway, with agricultural production

still accounting for almost a third of GDP even at the end

of the period.13 Yet the figures appear to signify a

diversifying as well as a growing economy. In addition,

Argentina's industrial sector was growing at a faster rate

than the rural sector, but her industrial economy never

became as large as the rural sector and produced always for

domestic consumption, not for the export market. The

industrial sector was not able to meet even domestic demand

in spite of its growth, so most of Argentina's demand for

manufactured goods had to be met by imports. In addition, in

spite of growth in mining, Argentina could not fill her

needs for minerals. From 1900 to 1929, imports of industrial

goods and materials equaled one quarter of Argentina's GDP,

and almost two thirds of these were ferrous metals and


Other important changes in the Argentine economy have to

do with infrastructure changes. The wave of immigrants gave

Argentina the labor pool needed--especially in skills and

for economic activities not present earlier (as discussed in

the preceding chapter). The period also witnessed the

construction of port facilities, power and commercial

networks, and other essential industries which contributed

to the growth statistics in non-agricultural areas cited

above. Yet, the key piece of infrastructure--the key

economic input--upon which these immigrants were to work and

whose products the ports were to handle was land.

Land expansion was constant over the period. Land was

brought into use by conquest, or rather extension of

Argentine control, and by the influx of labor already

discussed. The cultivated land area of Argentina increased

from just under 400 thousand hectares in 1872 to almost 26

million in 1930 with the period of greatest expansion coming

in the fifteen years before World War I. In the 1870's,

grazing areas predominated, but wheat-growing land expands

rapidly thereafter, becoming about one-third of the total by

the early 1900's and remaining at that level throughout the

early 20th century. Lands in fodder declined from almost

half the total in 1872 to about 20% in the first years of

the 20th century, and then rebounded rapidly after 1905 as

beef exports grew. The increase in fodder lands continued

more or less steadily, reaching 41.5% of the total land area

cultivated in 1922, then declining to a 1930 level of


Throughout the 19th century, fodder lands were

unimproved grazing lands, but with the emergence of a new

market for Argentine beef in the first decade of the 20th

century, a specific fodder--alfalfa--began to be

purposefully introduced.16 Alfalfa has certain distinct

advantages which make it a grazing crop of exceptional

value. It yields the highest amount of protein per area

sown, permitting greatly increased yields of beef. And it is

perennial, requiring little labor input. Later, actual grain

feeding of beef would be introduced, but alfalfa grazing

remained a staple of Argentine beef production.17 Alfalfa

growing was a key indicator of the direction of Argentina's

export economy. Since it was linked to the new beef

industry, it became a more secure and lucrative use of land

than grains.18

Patterns of land use shifted according to the perceived

value of what the land could produce. Estancieros,

particularly, regarded land as capital, as an input to be

employed to reach a large foreign market.19 While the amount

of land in wheat tended to undergo slow and steady changes,

the amount of land sown in fodder was unstable. There was a

sudden and large expansion in fodder lands starting in 1907,

which settled after 1912, then occurred again in the first

half of the 1920's.20 In many areas, cereal production

ceased entirely with obvious impact on the supply of grains

and on labor. Grain production often shifted from one

producing area to another, with an impact on certainty of

supply. A source in 1922 stated that "many areas which a

decade ago produced large quantities of wheat and other

grain grow almost none."21 As we shall see, these changes in

land use were responses to market forces.

This pattern of shifting land usage is reflected in

cattle statistics. The number of head of cattle produced in

Argentina fluctuated with the amount of land put over to

fodder. Argentina's ratio of cattle per capital was 6 times

that of the Unites States in 1913, allowing for a

considerable surplus of available stock over domestic

consumption.22 While sometimes increases in slaughter

overcame the rate of cattle production,23 Argentine breeders

generally were able to take advantage of the existence of a

domestic surplus and to respond rapidly to refurbish the

supply of stock. This allowed a certain mobility in dealing

with foreign markets.

Argentine land owners were able to respond en masse to

market forces because land holding was so concentrated.

Traditional latifundia patterns and commercial credit

policies insured that land ownership did not become

dispersed in spite of immigration and population growth.24

Argentine estancieros were thus able to keep herds together

for generations, maintaining unsurpassed quality of breeding

stock,25 and land prices and rents remained high in response

to its increasing productive value.26 The use of land as

capital meant that while the pampean region was able to

absorb a labor force of 800,000 immigrants up to 1914,27

they remained tenants, by and large. Shifting land to

alfalfa production exacerbated the tenancy pattern. Cereal

producing land--especially in the Northeast region: Entre

Rfos and parts of Santa Fe and Corrientes, as well as Buenos

Aires Province, C6rdoba and San Luis--was converted into

grazing land and fodder producing areas. Once an area was

sown in alfalfa, the need for tenants was terminated since

alfalfa is a perennial with few requirements for tending.

The tenants might move to another land parcel or to another

owner, but their services were no longer needed for

pasturage land (although the services of other ganadero

workers might be, of course). The ease with which land use

could be shifted created a migrant tenant class, some of

whom moved out of agriculture altogether, who played a role

in the social and political changes discussed in the

previous chapter. It also made capital formation and

technological application in the rural sector less urgent

and attractive, because profits could be insured simply by

changing crops, rather than increasing productivity. This

would have economic impact later.28

If land was one important aspect of the Argentine

economy, another was the phenomenal growth of the railroad

network. Starting with only about 700 kilometers in 1870,

the railroads had an average growth of about that same

number per year throughout the period, so that by 1913,

Argentina had 32,500 kilometers of railroad, or 41.9 per

inhabitant. This compares to 65 kilometers per person for

Australia, 61.3 for Canada and 43.5 for the United States.

Argentina's ratio was more than twice that for any other

large Latin American country.29 Railroad expansion after the

start of World War I slowed drastically, but it revived in

the 1920's to reach a total of 37,700 kilometers by 1927.

As well as serving as a consumer of materials and labor,

the railroad system served the obvious and critical

functions of carrying goods and linking the interior of

Argentina to overseas ports, especially Buenos Aires. In

1900, some 12,600,000 tons of cargo were being transported

yearly at a cost (income to the railroads) of 41,401,00

pesos oro. By 1927, 53,698,000 tons of cargo were shipped at

a cost of almost 300 million gold pesos with profits to the

railroads of 95.6 million pesos.30 The railroads were goods

movers and money makers.

A glance at any maps of the railway networks shows the

pattern as opposed to the size of expansion.31 Rail lines

radiate from Buenos Aires as a hub to connect the productive

regions of the interior--from Tucuman in the north to the

southern flanks of La Pampa and Buenos Aires province in the

south--to the ports of the coast. It is the land and its

productive capacity which are being linked to an outlet.

Land became accessible as the railroad web spun from Beunos

Aires reached it, and agricultural colonization followed the

railroad web.32 More importantly, land became a capital

asset when tied to the ports. The land was often owned prior

to the arrival of the railroad, but it became part of the

productive sector of the Argentine economy only after the

arrival of the railroads. For this reason--as well as its

own profitability--the railroad network was a key to

Argentine development.33

Equally important was the way the railroads were

developed. Two characteristics in particular are indicators

of the evolving nature of the Argentine economy. One has

been touched on above: the railroads were links for produce

to foreign markets, not for persons. And, secondly, the

railroads were predominantly foreign-owned. Hence, the

railroad was not just a symbol of development, but of a

particular kind of development for Argentina.

Railroad expansion occurred in two stages which reflect

ownership patterns. During the first stage, up to the

1880's, expansion was slow with about 50% of the financing

being domestic and the pace of investment tended to outstrip

returned revenues. After 1890, however, the pace of

expansion picked up and foreign investment began to

dominate. In part, the pace of investment quickened because

of a return of confidence after weathering the 1890 crisis.

It quickened also because of the increasing use of state

guarantees of profits. Investors would not undertake to

finance railroads into undeveloped territory without some

sort of government backing. Under various arrangements, the

Argentine government guaranteed certain profit levels (often

as high as 7% per year) to railroad investors. By the

1890's, some 20% of national government indebtedness

consisted of these guarantees. Even so, investors stuck to

routes which would have proved profitable regardless of

government action, so that unprofitable regional routes had

to be financed directly by the state.34 By the early 1900's,

railroads had become sufficiently profitable that even state

regulation did not diminish investor enthusiasm, partly, no

doubt, because the regulation was not particularly onerous

and because certain privileges, such as exemptions from

duties on imported construction materials, were granted.35

Profitability and security were so attractive that by

1914 British investors, by far the major foreign ones, owned

between 70 and 75% of the railroad mileage in Argentina.36

Native investors seemed uninterested.

Argentines were not investors in railways or
generally in joint-stock companies. Their wealth
was largely land, and with the prospect of
expansion their resources were directed to the
acquisition of more land and its development.37

The native elites seemed content to profit from the land

development boom which the railroads produced, rather than

from the railroads directly. And, in general, real estate

and land were more profitable.38 The land with its

productive capacity was Argentine, but the key to its

productive potential--the railroads--was British.

The phenomenon of foreign dominance of a key

infrastructure element was not limited to the railroads. The

most famous product of Argentina's rich land resources and

the one which has become synonymous with pampean society--

beef--was in its turn to become dominated by foreign

interests in a fashion similar to the railroads. In the same

way that the land was owned by Argentines, but its

productive capacity was determined by foreign interests

through the railroads, so the great cattle assets of

Argentina would become dominated by foreign interests

through the frigorfficos. Frigorfficos are more than just

slaughterhouses, or abattoirs; they also process meat

by-products and prepare beef for shipping in a variety of

forms. When meat production is oriented towards local

consumption, or only limited exporting in primitive forms

such as dried beef, frigorffico technology is not important.

Nor does hide production require high levels of technology

or investment. These, in fact, were the Argentine beef

products of consequence until the 1880's, and as long as

they were, Argentine beef interests remained in Argentine


In the 1880's, however, the emergence of a foreign

technology--refrigeration--would allow Argentine beef to be

transported long distances in palatable form.39 This meant

that the world market--the real market--was now open to

Argentine production. The very first successful frigorlfico

was established by George W. Drabble, a British

entrepreneur, as the River Plate Fresh Meat Company in 1883,

eventually taken over by the firm of George Nelson and

Sons.40 The majority of the early frigorificos, however,

were founded with Argentine capital or as joint

British-Argentine ventures.41 They were mutton-exporting

ventures for the most part, because the technology available

could deal more easily with smaller carcasses, such as

sheep, rather than large cattle.

The appearance of this new technology coincided with

several fortuitous events outside of Argentina. In the

United States, for example, domestic consumption of meat

products was increasing, and the amount of surplus

production for export was declining. At the end of the

nineteenth century, Britain, already a consumer of Argentine

beef, would demand new supplies of meat to feed its troops

in the Boer War, but dominion states, such as Australia,

would be unable to meet that demand.42 A new market to

consume what the new technology could produce was being


The advancement of refrigeration technology, and the

opening of new markets as mentioned above, stimulated a

shift to beef exports in the 1890 's. The Sociedad Rural

Argentina had opened La Congelada Argentina plant in 1884,

but it had failed because of capitalization and shipping

problems.43 But on April 30, 1900, Britain closed its ports

to what had been Argentina's major beef export: live

animals.44 Now, the frigorffico technology had to be applied

to the beef trade if the major foreign market was to be

maintained. Once again, foreign capital was called upon, and

Argentine government actions to guarantee profit levels and

exemptions from export duties were granted to stimulate

investment.45 Argentines realized that the level of

investment needed to create a major industry capable of

taking advantage of the new market situation was beyond

their means. After the boost to the industry created by the

Boer War and British contracts for food for the troops,

British control of both the production and consumption end

of the industry seemed inevitable. Even so, plants

capitalized by Argentines did open between 1902 and 1904,

including the La Blanca plant, and Frigorffico Argentino.46

After 1904, however, foreign capital began to pour in in

earnest and from more than one source, so that within the

next 13 years, the vast majority of the meat packing

capacity wound up in foreign hands. Similar to the

investment pattern in the railroads, once the real potential

for profitability was established, foreign money took over

the frigorifico trade. And profit levels for investment in

frigorfficos were spectacular during this period, averaging

over 10% per annum.47 But, unlike the railroads, the capital

for the expansion of the frigorffico industry now came from

the United States. The major North American meat packers,

with immense capital backing, saw the Argentine industry as

not meeting its potential and determined to expand it. The

United States companies came to dominate the Argentine

frigorffico industry through takeovers of faltering

Argentine plants or major new construction.48 By 1917, the

US companies controlled some 57.4% of the frigorffico trade,

while the Argentine share had fallen to less than 5%. Table

9 summarizes the situation.

AS OF 1919


United States


& Morris




& Sons


Frigorffico Armour de La Plata

Sociedad Anonima La Blanca

Compania Swift de La Plata

New Patagonia Meat & Cold Storage Co.

Frigorffico Wilson de la Argentina

River Plate Fresh Meat Co.

Las Palmas Produce Co.

and Argentina

Smithfield and Argentine Meat Co.



Compania Sansinena de Carnes
Congeladas, Ltda.


SourceF: Federal Trade Commission, Report on te Meat
Packing Industry (1919), 24-35, 160-167, 172-73.

Note: *indicates date of founding under named country: both
formerly Argentine owned.









The emergence of United States leadership of the

frigorifico industry altered the structure of the beef trade

in Argentina. North American firms seemed more aggressive

and expansionist than established British and Argentine

firms. Were the new companies to rapidly expand beef buying,

ruinous competition for supply could be the result. Weaker

firms might be driven out, and, in any case, the cost of

beef to the frigorificos was bound to go up. Before the

appearance of the American firms, competition for supplies

of cattle had been avoided by informal arrangement. Periodic

"friendly chats" had assured each frigorifico of a

reasonable supply of beef, without price competition. These

early pools had worked well in keeping the growth of the

industry controlled.49 Similar accommodations were worked

out initially with the new arrivals.

In late November of 1911, it was agreed among the major

frigorfficos to meet every six weeks to establish production

quotas which would guarantee everyone an adequate supply of

beef without competing for supplies of cattle. Under the

pool cattle prices remained reasonably stable and profits

were not excessive, averaging about 13.5%.50 However, under

the restraints of the pool, plant had not been used at

capacity and the new arrivals were too strong to keep in

line. By April, 1913, the U.S. firms felt in a position to

break out of the restraints of quotas and did so. What

followed was a brief price war--not in sales prices but in

bidding for cattle. This hurt small producers as the larger

firms could sustain the higher payments and were controlling

the price paid for cattle. In general, the British and

Argentine firms had no choice but to seek another

accommodation with the U.S. producers. And, as long as they

had a guaranteed share of a growing market and enjoyed the

same advantages of limited competition, it was to their

advantage to do so. In June 1914, a "new pool" was

established with the U.S. Companies receiving the lion's

share of the market. This arrangement, with occasional and

minor interruptions, continued well into the 1920's. Thus,

the domination of the frigorffico industry by U.S. firms was


The suppliers of cattle and consumers of beef, of

course, were affected by these machinations. Beef producers

were not affected as adversely as might be expectly in

selling their cattle, as the price continued to rise in

spite of the pools. Beef prices tended upwards until 1919,

then dropped considerably to 1923, and then rose again for

the rest of the 1920's, although never again reaching 1919

levels. The number of cattle bought for slaughter tends to

follow, rather than oppose, price movements: rising to 1918,

then dipping but returning to those levels by 1922, then

steadily climbing for the rest of the decade of the

1920's.51 Perhaps the presence of the pool dampened normal

supply and demand interactions somewhat. When slaughter

increased, the supply of cattle did not rise so fast as to

level off prices, nor did falling slaughter totals greatly

reduce prices. On the other hand, the generally steady

increase in herd size and in the price of production land

indicate that the producers did not suffer undervaluation of

their produce.

Cattle producers did, however, have to drastically alter

their production standards. Cattle now had to be bred

simultaneously for heavier weights and higher quality of

beef. Frigorffico buyers, especially the North Americans,52

wanted heavier, younger steers for their plants.53 This

required alterations in feeding and breeding. Slaughtering

at an earlier age also temporarily affected the herd size.54

Costs of breeder bulls skyrocketed,55 and the use of

supplemental feeds, such as alfalfa, increased. This, of

course, affected the use of land resources, as has already

been mentioned. The beef producer was entering a new world

because of the frigorfficos.

Consumers in Argentina generally did not buy their beef

from the frigorfficos. They bought fresh meat, for the most

part, which usually came from different grades of cattle.

But, the necessary changes in beef raising would affect the

abundance of all grades and the pricing practices of the

frigorfficos, being major consumers of cattle, affected all

markets. Thus, while beef producers who sold directly to the

frigorfficos were obviously at the mercy of the pool, so

too, to a lesser extent, were domestic producers and

consumers. Prices at the Liniers market, the major market

for domestic beef in Buenos Aires, rose rather steadily from

1911 to 1914, and steeply thereafter until 1920.

Per capital consumption reflected these price motions to

some extent and fell off from 1914 to 1922, declining almost

40% from 1913 to 1918 alone. This was partly offset by

increasing consumption of other meats such as mutton, lamb

and pork.56 But, these meats were not the ones of choice,

nor do they seem to have been as readily available in the

major domestic markets, therefore demand for beef tended to

become rather inelastic in the decade of the 1920's.57

Generally, Argentine meat consumption remained largely

composed of beef and as a whole stayed rather steady and was

not reflective of per capital income or beef prices over the

long haul. As we shall see, consumers did occasionally raise

complaints about the beef industry, but to little avail.

The railroads and the frigorffico industry are but two,

although the most important, examples of a pattern of

foreign dominance of Argentina's economy. Primary economic

assets, such as land and cattle, had always been native

owned, and when they became the basis of new grain and beef

exporting they continued to be so. But secondary inputs and

processing plants were foreign owned. Investment in

mercantile or industrial ventures was less secure than

investment in traditional sectors such as land, and

immigrants and agents of foreign firms dominated in this

sector. By the late 19th century, 90% of the import-export,

wholesaling, and retailing business was in foreign hands.58

This kind of concentration, as also happened in the

frigorifico industry, continued into the 20th century.

Some of the seeming reluctance on the part of native

Argentines to enter new economic enterprise may be

attributable to cultural factors. The traditional Argentine

elite spurned trading and industry for the most part.59 As

we shall see, members of influential economic groups like

the Sociedad Rural Argentina generally limited their

activities to the primary sector and did not venture into

industry. There were Argentine entrepreneurs, but they were

usually immigrants or sons of immigrants and not part of the

landed elite.60 On the other hand, as long as cattle and

land remained stable and profitable investments, incentives

for expansion into more risky areas was lacking.

More to the point is that the materials and expertise

necessary to create an industrial sector generally were not

available locally. This meant that those items had to be

imported, and as we have already seen this was an expensive

proposition with implications for the rest of the economy.

Foreign firms dominated the industrial sector because they

had expertise and capital to do so and Argentines did not.

The materials and machinery necessary to operate not only

the. major industries themselves, but their shipping and

service ancillaries, had to be provided by foreign

companies. For example, British shipping firms controlled

sea transportation, handling over half the foreign shipping

from Buenos Aires from 1895 on into the 1920's.61 After the

First World War, North American industries moved into

Argentina in numbers.62

Imports were the essential economic inputs for the

development of Argentina.63 Forty percent of Argentine

imports were comprised of foodstuffs, textiles, and iron and

steel products in 1911, and this proportion rose to 50.5% by

1930. Argentina imported over half of its textiles and

clothing, about 85% of its machinery, and almost 100% of its

petroleum and rubber products and electrical machinery.64

Imports were also essential to consumption: they constituted

between 38 and 41% of the goods consumed in Argentina from

1912 to 1927 .65 This level of imports necessitated

maintenance of high levels of exports from Argentina's

traditional rural sectors.

In addition, as already suggested, the budget of the

Argentine government was driven by imports. On the average,

over 40% of government receipts came from import levies each

year from 1910 to 1929.66 However, the Argentine government

could produce a budget surplus only twice during this

period, in 1920 and 1925, and the surpluses were modest. In

contrast, for the rest of the years, the budget deficit

averaged 106 million pesos annually, with a peak deficit of

231 million in 1926.67 Thus, neither Argentine industries,

nor consumers, nor the government could effort to curtail

imports. This may explain, in part, why protectionist

tariff programs were generally not undertaken by


The largest and most important of imports was capital.

Between 1880 and 1930, Argentina imported, that is to say

borrowed, almost all its funds for investment. In 1914, only

14% of the total financial debt in Argentina was held in

country. This may have risen to as much as 50% by 1934, but

foreigners probably still held the majority of the Argentine

debt even after the onset of the depression of the 1930's.69

Moreover, most capital came in the form of direct investment

in plant rather than actual loaned funds, which tended to

equal about 25 to 30% of total foreign invested capital.

Still, the amount of either was large: the total equaling

almost half the GDP for most of the golden age.70 Argentina

received fully a third of all the investment capital flowing

into Latin America.71 In addition, one country--Great

Britain--owned consistently over half of that investment,

sometimes as much as two-thirds. While interests of the

United States grew in the 1920's, foreign ownership of

capital in Argentina tended to remain highly concentrated in

the hands of investors from only one country. Table 10

summarises the total investment picture in Argentina from

1910 to 1931.

(in millions of gold pesos)

Year 1910__ 1913 1917 1920 1923 1927 1931

Total 2,255 3,250 3,350 3,150 3,200 3,600 4,100

British 1,475 1,928 1,950 1,825 1,975 2,075 2,100

as % of
total 65.4 59.3 58.2 57.9 61.7 57.6 51.2

USA 20 40 85 75 200 505 807

as % of
total .88 1.2 2.5 2.4 6.3 14.0 19.7

GDP* 4,196 4,875 4,213 5,424 6,431 7,761 7,906

as % of
GDP 53.8 66.7 79.5 58.1 49.8 46.4 51.9

Source: Phelps, International Economic Position of Argentina,
99, 108 and Randall, 2-3.

*Note: GDP figures in 1935-1939 pesos. Therefore, "Total as %
of GDP" is not a real percentage and is used for comparisons
between years only.

Servicing the foreign debt--paying for that portion of

foreign capital which was borrowed directly by the state--

became a burden on the government. Total debt service, which

included payments to foreign investors and domestic ones,

took 31% of government revenues by 1930. At least half, and

sometimes as high as three quarters, of this total went to

foreign investors.72. Thus foreign debt service played a key

role in making the era one of deficit spending.

The clearest demonstration of the problems inherent in

Argentina's course of economic development could be seen in

the country's response to the First World War. The war

seemed to offer Argentina an opportunity for increased

wealth and internal investment. Export prices remained high,

and Argentina remained neutral so that she was prepared to

continue trading with all her foreign customers. In reality,

Argentina's foreign trade declined. Because of Britain's

ability to control shipping lanes, Argentina lost some

customers, such as Germany, and expanded her business with

the Allies, but the real decline came in imports because the

warring industrial nations could not maintain their earlier

levels of exports. Partly as a result, budget deficits

reached an average of 153 million pesos per year, an

increase of almost 50% from the prewar period.73 In

addition, imports became more expensive. Prior to the war,

Argentina's terms of trade had consistently been good, but

wartime prices ended that happy circumstance.

Nevertheless, the wartime increase in the amount and

value of her exports enabled Argentina to amass considerable

reserves. These might have been used to create a domestic

investment pool, but they were not. Some of the foreign debt

was retired, but not a lot. Internal investment did increase

but it stayed where it always had, in land whose value

continued to climb, and did not affect the pattern of

foreign ownership of industry much. In fact, Argentina

emerged from the war somewhat richer, but the economy was

not particularly stronger than it had been before.74 It may

well have been impossible for Argentina to have done much

else. Investment in industrial plant required imported

materials, as always, which she could not get. And, the war

resulted in concentrating Argentine markets--both for

capital and for exports--even more as the United States

joined Britain in driving competitors out of Latin America

and some customers were lost.

The First World War is also a turning point in the pace

of development of the Argentine economy. As indicated

earlier in this chapter, many indicators of economic growth

took downturns at about this time. Investment continued but

not as rapidly as before. Infrastructure construction, at

least in some of the critical areas, wss complete. The

period immediately after the war presents an opportunity to

examine in more detail the other crucial side of Argentina's

economic development equation: exports.

1Jorge Abelardo Ramos considers the period to extend
from 1904 to 1922 and the term "la bella 6poca" is from his
Revoluci6n y contrarrevoluci6n en la Argentina, Tomo III: la
bella epoca. 1904-1922 (Buenos Aires: Editorial del Mar
Dulce, 1970). Other authors extend the period to the
revolution of 1930. Some examples include Carlos F. Dfaz
Alejandro, Essays on the Economic History of the Argentine
Republic (New Haven: Yale University, 1970), Lloyd G.
Reynolds, Economic GXwth in the Third World, 1850-1980 (New
Haven: Yale University Press, 1985), and Peter H.- Smith,
Politics and Beef in Argentina: Patterns of Conflict and
Change (New York: Columbia University, 1969).

2In addition to the works cited above, further analysis
of the Argentine economy during the period can be found in
the following: Gustavo Beyhaut, et al, "Los inmigrantes en
el sistema ocupacional argentino," in Torcuato S. Di Tella,
Gino Germani, and Jorge Graciarena, Argentina, sociedad de
masas (Buenos Aires: EUDEBA, 1971); Roberto Cort6s Conde,
"The Export Economy of Argentina, 1880-1920," in Roberto
Cortes Conde and Shane J. Hunt, eds., The -Latin American
Economies: Lrowth and the Export Sector. 1880-1930 (New
York: Holmes & Meier, 1985) 319-81, El progress Argentino,
1880-1914 (Buenos Aires: Editorial Sudamericana, 1979), and
"Tierras, agriculture y ganaderfa," in Gustavo Ferrari and
Ezequiel Gallo (eds.) La Arentina del ochenta al
centenario (Buenos Aires: Editorial Sudamericana, 1980) ,
377-404; Carlos F. Dfaz Alejandro, "La economfa argentina
durante el period 1880-1913," in Ferrari and Gallo,
369-376; Guido Di Tella and Manuel Zymelman, Las etapas del
desarrollo econ6mico Argentino (Buenos Aires: Editorial
Paidos, 1973); H. S. Ferns, Argentina (New York: Praeger,
1969); Aldo Ferrer, The Argentine Economy, Trans. Marjory M.
Urquidi (Berkeley: University of California Press, 1967);
Tomas Roberto Fillol, Social Factors in Economic
Devel-opment:The Argentine Case (Cambridge: Massachusetts
Institute of Technology Press, 1961); Rogelio Frigerio,
Economic polftica y polftica econ6mica national (Buenos
Aires: Libreri'a Hachette, 1981) and Sintesis de la historic
critical de la economy Argentina (Buenos Aires: Libreria
Hachette, 1979); Ezequiel Gallo, Agrarian Expansion and
Industrial Development in Argentina (1880-1930) (Buenos
Aires: Instituto Torcuato Di Tella, 1970); Wendel C. Gordon,

The Political Ecnomy of Latin America (New York: Colombia
University Press, 1965); Roger Gravil, The Anglo-Argentine
Connection. 1900-1939 (Boulder: Westview Press, 1985);
Gilbert Wilson Merkx, Political and Economic Change in
Argentina from 1870 to 1966 (Ph.D. dissertation, Yale
University, 1968); Vicente Vgzquez-Presedo, El caso
argentino: migraci6n de factors. comercio exterior y
desarrollo. 1875-1914 (Buenos Aires: EUDEBA, 1971) and "La
evolucion industrial (Argentina, 1880-1910)," in Ferrari and
Gallo, 405-18; Richard J. Walter, "The Socioeconomic Growth
of Buenos Aires in the Twentieth Century" in Stanley R. Ross
and Thomas F. McGann, Buenos Aires: 400 Years (Austin:
University of Texas Press, 1982); and United Nations,
Secretariat of the Economic Commission for Latin America,
Economic Survey of Latin America. 1949 (New York: United
Nations Department of Economic Affairs, 1951).

3There have been attempts to construct indices of some
economic indicators for periods as early as the 1880's. A.
G. Ford constructed an import and export price index based
on 1900 price levels for the period 1881-1914 in his "Export
Price Indices for the Argentine Republic, 1881-1914,"
InterAmerican Econojic Affairs, 9: 2 (1955), 42-54. Gilbert
Wilson Merkx and John H. Williams also attempted similar
indices for imports and other indicators. See, respectively,
Merkx's work cited above and Williams' Argentine
International Trade under Inconvertible Paper Money
1880-1900 (Cambridge: Harvard University Press, 1920.
Reprint; New York: AMS Press, 1971)

4See Merkx's figures, p. 42.

5Merkx, 124, 361.

6Ferns, Argentina, 98.

7Di Tella and Zymelman, 66-67.

8Beyhaut, et al, 85-94 and Ferrer, 81.

9Cortes Conde, "The Export Economy of Argentina," 327.

10Ferns, Britain and Argentina, 324-25.

llThis interpretation of the Baring crisis relies
heavily on Cort6s Conde,"The Export Economy of Argentina,"
330-34, 342. In addition, see Di Tella and Zymelman, 54-55;
Ferns, Britainand Argen._tila, 439-484; A. G. Ford,
"Argentina and the Baring Crisis of 1890," Oxford Economic
Paer., New Series, 8: 2 (June, 1956) 127-50; John E.
Hodge, "Carlos Pellegrini and the Financial Crisis of 1890,"
Hispanic AmericanJ historical Review, 50: 3 (August, 1970),

499-523; Thomas F. McGann, Argentina, the United States, and
the Inter-American System 1880-191 (Cambridge: Harvard
University Press, 1957), 113-20; and Jose Luis Romero, A
History of Argetine Political Thought, Trans. Thomas F.
McGann (Stanford: Stanford University Press, 1963), 206-07

12Cortes Conde, "The Export Economy of Argentina," 334.
13Different index bases can create different
proportional shifts. For example, using 1950 figures as
bases, the proportional increase for the industrial sector
is smaller, although the percentages themselves are higher.
See Dfaz Alejandro, 6, for indices based on both 1937 and
1950 bases.

14Diaz Alejandro, 15-16.

15Data on land use are from Di Tella and Zymelman, 41,
Dfaz Alejandro, 440, and Economic Commission for Latin
America, 130.

16Cortes Conde, "The Export Economy of Argentina," 344.

17United-States beef producers had begun planting
alfalfa, imported from Chile, as early as 1854. Its yield
per acre was four times that of common hay grasses using
early 20th century technology. See F. W. Woll, Productive
Feeding of Fajm _Animals (Philadelphia: J. B. Lippincott
Company, 1916), 114-17. According to the staff of the
Veterinary College of Virginia Polytechnic and State
University in an interview conducted on August 7, 1985,
alfalfa's inherent advantage over other forage is its high
concentration of a useful protein called saponin. A
disadvantage of proteins like saponin, however, is that they
are foaming agents; today, saponin is chemically extracted
and used as a foaming agent in beverages, fire
extinguishers, and detergents. When digested in the rumen of
cattle, saponin can produce severe enough foaming to cause
bloating, which in extreme cases can cause death. Cattle can
be acclamated to high-protein feeds, however, and a
contemporary report indicates that bloating was not "a very
serious menace" in Argentina. See A. D. Melvin, "The South
American Meat Industry," Yearbook of the United States
Department f Agriculture, 1913 (Washington, DC: USDA,
1914), 359.

18Such was the opinion of two foreign contemporaries, A.
D. Melvin, Chief of the Bureau of Animal Industry, and
George M. Rommel, Chief of the Animal Husbandry Division,
Bureau of Animal Industry, both of the United States
Department of Agriculture. See, respectively, "The South
American Meat Industry," Yearbook of the United States
Department of Agriculture. 1913 (Washington, DC, 1914),

347-64, and "Meat Production in the Argentine and Its Effect
Upon the Industry in the United States," Yearbook of the
United States Department of Agriculture. 1914 (Washington,
DC: USDA, 1915), 381-390.

19Cortes Conde makes this case in El progress argentino,

20Sociedad Rural Argentina, Anuario de la Sociedad Rural
Argentina: estadsticas eon6micas y agrarias (Buenos Aires:
Sociedad Rural Argentina, 1928), 20.

21United States Tariff Commission, Cattle and Beef in
the United States: The Tariff Problems Involved (Washington,
DC.: United States Tariff Commission, Tariff Information
Series No. 30, 1922), 57.

22Melvin, "The South American Meat Industry," 362-63

23This was the case between 1908 and 1913 as cattle
slaughter increased and the time lag between bringing new
lands into fodder and the production of saleable cattle
became apparent. See George K. Holmes, "Argentine Beef,"
Farmers Bulletin 581: The Agricultural Outlook (Washington,
DC.: United States Department of Agriculture, 1915), 39-40.

24Cort6s Conde makes this case in El progress Argentino,
129-140, as does Joseph S. Tulchin in "El credit agrario en
la Argentina, 1910-1926," Desarrollo Econ6mico, 18: 71
(December, 1978), 381-408.

25Rommel, "Meat Production in the Argentine and Its
Effect Upon the Industry in the United States," 385-86.

26For the progress of land prices see Norberto Ras and
Roberto Levis. El precio de la tierra: su evoluci1n entire
los aios 1916 y 1978 (Buenos Aires: Sociedad Rural
Argentina, 1980), 10.

27Ferrer, 8.

28Land use and tenancy are discussed in Diaz Alejandro,
141-159; Horacio C. E. Giberti, "El desarrollo
agropecuario," Desarrollo -Econmic., 2: 1 (Abril-Junio,
1962), 65-126, and Historia ec ica de la ganadra
Argentina (Buenos Aires: Ediciones Colar, 1961); James R.
Scobie, Revoltion on he Pampas: A Social History of
Argentina Wheat. 1860-1910 (Austin: University of Texas
Press, 1964) and "Una revoluci6n agrfcola en la Argentina,"
Desarrollo Economico, 3: 1/2 (Abril-Septiembre, 1963),
111-141; Carl Solberg, "Rural Unrest and Agrarian Policy in
Argentina, 1912-1930," Journal oQfInter-American Studies and
World Affairs 13: 1 (January, 1971), 18- 52; and Carl C.

Taylor, Rural Life in Argentina (Baton Rouge: Louisiana
State University, 1948).

29Vasquez-Presedo, 44. In addition to the sources listed
above covering economic and infrastructure developments, the
following concern themselves with railroad development in
Argentina: A. G. Ford, "British Investment and Argentine
Economic Development, 1880-1914," in David Rock, ed.,
Argentina in the Twenieth Cntury (Pittsburg: University of
Pittsburg Press, 1975), 13-40; Paul B. Goodwin, "The Central
Argentine Railway and the Economic Development of Argentina,
1854-1881," Hispanic American Historical Review, 57: 4
(November, 1977), 613-632; Leland H. Jenks, "Britain and
American Railway Development," The Journal of Economic
History, 11: 4 (Fall, 1951), 375-88; Colin M. Lewis, "La
consolidaci6n de la frontera argentina a fines de la decade
del setenta: Los indios, Roca y los ferrocarrilles," in
Ferrari and Gallo, 469-498; Winthrop R.Wright, British-owned
Railways in Argentina: Their Effect on Economic Nationalism.
1854-1948 (Austin: University of Texas Press, 1974); and
Eduardo A. Zalduendo, "Aspectos econ6micos del sistema de
tansportes de Argentina," in Ferrari and Gallo, 439-68.

30These figures come from Vasquez-Presedo, 44 Cortes
Conde, El progress Argentino, 81, and Anuario, 103.

31See the maps in Wright, 53, 122.

32Railroads brought labor in the form of tenants to the
new productive areas. Legislative homesteading attempts,
made in the 1880's and '90's in an effort to link
colonization in the form of ownership and railroads,
generally met with little success. See Gravil, 10-12, and
Ferns, Britain and Argentina, 444.

33paul B. Goodwin has argued that railroad building
followed demand: that railroads "were built in response to
clearly discerned market patterns and economic opportunity."
See "The Central Argentine Railway and the Economic
Development of Argentina, 1854-1881," 613. There has been
some debate over the issue of railroad-led development.
Goodwin's case was criticised directly in Sylvester Damus's
"Critique of Paul B. Goodwin's 'The Central Argentine
Railway and the Economic Development of Argentina,
1854-1881'," Hispanic Americ His ical Review, 58: 3
(August, 1978) 468-74. And, most of the authors listed
above, including Cortes Conde, Ferns, Frigerio, Giberti,
Gravil, and Wright have argued that railroads created
demand: their construction preceded any real demand for
their services in the areas in which they were constructed.

34The differentiation of stages of development is from
Gravil, 6-8. See also Cortes Conde, "The Export Economy of
Argentina," 339-46; Ferns, Argentina, 100-101; and Wright,
Chapters 3 and 4.

35Wright, 86-88.

36Gravil, 8 and Jenks, 375.

37Ferns, Argentina, 101.

38Ford, "British Investment," 33-35.

39For the history of the early efforts at refrigeration
and the opening of the first frigorfficos, see chapter six
of Companfa Swift de la Plata, Ganaderfa Argentina: su
desarrollo e industrializacn (Buenos Aires: Compagra Swift
de la Plata, SA, 1957); Federal Trade Commission, Report on
the Meat Packing Industry, Part I (Washington DC: Federal
Trade Commission, 1919); Horacio C. E. Giberti, Historia
econ6mica de la ganaderla Argentina (Buenos Aires: Ediciones
Colar, 1961), Chapter 6; Gravil, 64-74; Simon G. Hanson,
Argentine Meat and the British Market: Chapters in the
History of the Argentine Meat Industry (Stanford: Stanford
University Press, 1938), Chapter 3; Jorge Newton, Historia
de la Sociedad Rural Argentjina (Beunos Aires: Edtorial
Goncourt, 1966) 80-87; Peter Smith, Politics and Beef in
Argentina: Patterins of Conflict and Change (New York:
Columbia University Press, 1969), 33-34; and Vicente
Vazquez-Presedo, El c Argetin: migracion de factres
comercio exterior y desarrollo. 1875-1914 (Buenos Aires:
Editorial Universitaria de Buenos Aires, 1971), 177-82.

40Argentine nationalists might argue that the first
frigorffico was a natively owned one. Eugenio Terrason, who
owned a meat packing plant in San Nicolas, had provided the
dressed beef for the first experimental voyage of the
refrigerator ship Frigorifique for the French firm of
Charles Tellier. After its success, Terrason had converted
his packing plant into a frigorffico with the purchase of a
chilling machine with the capacity of 30,00 kilos per day.
He exported his first load--mutton--in the Lord Ard in 1883.
See Hanson, 53, and Compania Swift, 92.

41Federal Trade Commission, 163, and Gravil, 64.

42Hanson, 127-29.

43Hanson, 53, Newton, 80-87.

44Hanson, 50, 130-31.

45Gravil, 64.

46Federal Trade Commission, 163-64.

47As an example, the Sansenena company paid a dividend
of 50% in 1902, 12.5% in 1903, 10% from 1904 to 1907, 12%
from 1908 to 1909, and 15% in 1910: a total return of 129%
in only 9 years. The smaller River Plate firm averaged over
10% per year for the same period (Federal Trade Commission,

48Armour and Morris took over the previously Argentine
La Blanca operation in 1912, and Wilson acquired what had
been the Frigorffico Argentino in 1916. And when the
American firms built new plants, they were the newest and
best. The 1911 Frigorifico Armour de la Plata was "the
largest, finest, and most perfectly appointed packing house
ever built anywhere," according to the July, 1915 edition of
The Americas as cited in Federal Trade Commission, 173. See
also pp. 163-64.

49The works listed in note 39 cover the era of the pool.
The best source is Hanson.

50Hanson, 170.

51See Tables A4 and A16, Appendix II for prices at the
Liniers market and for the total slaughter figures for the
period. In general, the Liniers market bought for local
consumption, and the firgorrficos bought directly from the
estancias, so their price levels cannot be directly
compared. However, in the period for which comparitive data
is available (1924-1927), prices at Liniers and the
estancias follow the same paths with the latter always being
slightly higher. See Anuario, 266-67.

52American firms claimed that they bought heavier cattle
--dressed weight of 770 pounds--than the British or
Argentine firms. The heavier cattle, in their view, were
more saleable in the export market. See Federal Trade
Commission, 170.

53Breeders did respond with heavier cattle for the
frigorfficos. Data for 1924-1927 from pages 259-60 of
Anuario indicate that the average dressed weight of a steer
sold to the frigorfficos was 613 pounds, while those sold to
domestic markets averaged 424 pounds.

54The age at slaughter decreased from an average of five
to six years to three when frigorffico buying began to
affect the cattle industry. See Vgsquez-Presedo, 184. This
is probably related to the decline in herd size in the same
period as noted above.

55The top price paid for Shorthorn breeder bulls moved
from 5,000 mSn in 1895, to 80,000 in 1913, 110,000 in 1920,
and 152,000 in 1925. For Hereford bulls, the prices were
3,000 in 1896, 7,000 in 1906, 23,000 in 1912, and 50,000 in
1918 (all figures mSn).

56Consumption figures from the Sociedad Rural Argentina
indicate per capital beef consumption figures of 104.3
kilograms in 1913, dropping to 75.7 in 1918, rising to 136.4
in 1922, then leveling off for the rest of the decade. See
Anuario, 277. Peter Smith's figures are somewhat different,
but show a similar movement. See Politics and Beef, 74.
While the population of Argentina grew, the number of cattle
salughtered in the Liniers market remained stable during the
period. See Table A18, Appendix I.

57This is the conclusion of Alieto A. Guadagni in
"Estudio econometrico del consume de care vacuna en
Argentina en el period 1914-1959," in Desarrollo Econ6mico,
3: 4 (Enero Marzo, 1964), 517-33.

58Eugene W. Ridings, "Foreign Predominance among
Overseas Traders in Nineteenth-Century Latin America," Latin
American Research Review, 20: 2 (1985), 5.

59Ridings discusses attitudes, as does Tomas Roberto
Fillol in Social Fagcors in Economic Deelopment: The
Argentine Case (Cambridge: The M.I.T. Press, 1961).

60As an example of entrepreneurship, see the excellent
study of Torcuato Di Tella by Thomas C. Cochran and Ruben E.
Reina, Capitism in Argentine Culture: A Study of Torcuat
Di Tella anlS.LL.A.M. (Philadelphia: University of
Pennsylvania Press, 1962).

61See Robert G. Albion, "British Shipping and Latin
America, 1806-1914," The Journal of Economic History, 9: 4
(Fall, 1951), 361-374.
62A complete and reasonably contemporaneous study of
North American interests in Argentina is included in Dudley
Maynard Phelps, Migration of Industry to South America (New
York: McGraw-Hill, 1936).

63The importance of imports to the development of the
Argentine economy is explained by Cortes Conde in "The
Export Economy of Argentina, 1880-1920," 319-81.

64Dfaz Alejandro, 210.

65Dudley Maynard Phelps, The International Economic
Position of Argentina (Philadelphia: University of
Pennsylvania Press, 1938), 12, 145.

66Harold Edwin Peters, The Foreign Debt of the Argentine
Republic (Baltimore: Johns Hopkins University Press, 1934),

67According to calculations based on Tables A8 and Al0,
Appendix I.

68Tariff policy, especially protectionist tariffs, has
been the subject of debate. While most Latin American
nations embarked on protectionist programs following WWI,
Argentina did not. Of course, such programs were not
necessary during the war. See Diaz Alejandro, 217 and
277-308, and Carl Solberg, "The Tariff and Politics in
Argentina, 1916-1930," Hispanic American Historical Review,
53: 2 (May, 1973), 260-84.

69Peters, 142-43 and Phelps, The International Economic
Position of Argentina, 113.

70These percentages are only approximate since GDP and
foreign investment have not been measured in exactly the
same pesos. See Table 10.

71Ferrer, 89.

72Phelps, The International Economic Position of
Argentina, 118-19.

73Based on calculations from Tables A8 and A9, Appendix

74See Joseph S. Tulchin's excellent coverage of
Argentine economics during the war in "The Argentine Economy
During the First World War," Review of the River Plate,
(June 19, 1970), 901-03; (June 30, 1970), 965-67; (July 10,
1970), 44-46.


While infrastructure building and the promotion of

imports was essential to creating the new Argentine economy

of the golden age the development of exports was equally

important. Some analysts suggest that exports were the key

to Argentine economic development in the golden age.l Even

though Argentina's economy was becoming somewhat diversified

by the early 20th century,. "it still relied heavily on

steady expansion of exports."2 Figures of the proportion of

Argentina's total production being exported clarify the

importance of exports. In 1912, some 44% of her total

production was exported, declining to 34.4% in 1914, and

rising to 42% in 1927.3

The world export economy increased roughly six-fold in

the years 1870-1929.4 In the agricommodities portion of this

market, Argentina was able to assume a primary place,

becoming one of the world's principal exporters of certain

products. Argentina's foreign trade grew at an average rate

of almost 4.5% per year for the period 1880-1929.5 Indexed

foreign trade values show that this growth was not even,

suffering occasional declines, but showed spectacular

performances at times, especially after 1900. As indicated

in Table 11, foreign trade doubled from 1900 to 1905,

doubled again by 1913, then almost again by the time it

peaked in 1920. This in turn enabled Argentina to sustain

her own remarkable overall economic growth.

For most of this period, exports accounted for the

majority of the value of total foreign trade. From roughly

1890 to 1920, exports grew at a rate of 5.7% per year6:

faster than total foreign trade. In 1889, the export to

import ratio was roughly 3 to 2, shrinking slightly to 2 to

1 by 1908.7 As Figure 3 demonstrates, the total value of

exports remained generally higher than that of imports until

the 1920's, but during that decade Argentina's balance of

trade suffered.

Along with the growth in volume and value, Argentine

exports grew in diversity. The specific types of products

within the agropecuarian sector became more diverse with the

creation of the chilled beef industry in the late 19th

century and the rise of bulk grain exports in the 20th.

Although some sectors of the economy, such as construction

and mining, grew faster than the agricultural and ranching

sectors, Argentina's reliance on her pampean produce

remained almost complete.8


INDEX: MEAN OF 1910-1914 = 100



















u17 r TW






Source: Compiled from statistics in Sociedad Rural
Argentina. Anuario de la sociedad rural Argentina (Buenos
Aires, 1928), p. 8-9, 15.

Note: indices for 1928-29 calculated from data in United
Nations, Economic Commission for Latin America, Economic
Survey of Latin America, 1949 (New York: 1951), 98.

-ULLLL--,---LL~Y~!- `I ~YYY

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