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Foreign-Owned Railways in Argentina: A Case Study of Economic Nationalism

Published online by Cambridge University Press:  11 June 2012

Winthrop R. Wright
Winthrop R. Wright
Affiliation:
Escuela de Ciencias Sociales, Universidad de Oriente, Venezuela
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Abstract

The interplay between national economic policy and private business policy in Latin America is a constant historical theme. The case of foreign-owned railroads in Argentina illustrates the road to nationalization between 1854 and 1948.

Type
Research Article
Information
Business History Review , Volume 41 , Issue 1 , Spring 1967 , pp. 62 - 93
Copyright
Copyright © The President and Fellows of Harvard College 1967

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References

1 According to Argentine Republic, Dirección General de Ferrocarriles, Estadística de los ferrocarriles en explotación, año 1933, XLII (Buenos Aires, 1935), 48Google Scholar, British firms owned approximately 66½ per cent of Argentina's 23,862 mile railway system by the time of the depression of 1930, as compared with only 9 per cent owned by French companies. The nationalist historian of the Argentine railways, Ortiz, Raúl Scalabrini, Historia de los ferrocarriles argentinos (Buenos Aires, 1940), 44Google Scholar, ascertains that as far as the railways are concerned, the terms “private capital,” “foreign capital,” and “British capital” are interchangeable.

2 Kohn, Hans, Nationalism: Its Meaning and History (Princeton, 1955), 9.Google Scholar See, also, Silvert, K. H., “Political Change in Latin America,” The United States and Latin America (New York, 1959), 65.Google Scholar

3 Snyder, Louis B., The Meaning of Nationalism (New Brunswick, N.J., 1954), 134.Google Scholar Snyder refers to economic nationalism as a “philosophy of security.”

4 Kohn, Hans, The Idea of Nationalism (New York, 1958), 18.Google Scholar Kohn states that economic nationalism holds that “the well being of the individual can be achieved and secured only by the economic powers of the nation.”

5 For a brief discussion of nationalism in Latin America, with particular emphasis upon the Argentine case, see Whitaker, Arthur P., Nationalism in Latin America: Past and Present (Gainesville, 1962).Google Scholar The best treatment of Rosas and his use of nationalism is found in Burgin, Miron, Economic Aspects of Argentine Federalism, 1820-1852 (Cambridge, Mass., 1946).CrossRefGoogle Scholar

6 See Jenks, Leland H., “Britain and American Railway Development,” Journal of Economic History, XI (Dec, 1951), 375–88CrossRefGoogle Scholar, for an informative comparison of the role of British capital in the development of railways in the United States and Argentina.

7 Alberdi, Juan B., Bases y puntos de partida para la organización político de la República Argentina (Buenos Aires, 1914), 82.Google Scholar Alberdi's concept found expression in Article 67 of the Constitution of 1853, according to which Congress was provided with power to promote industrial enterprise, immigration, the construction of railways, and the importation of foreign capital.

8 The account of early railway undertakings is drawn from Alberdi, Juan B., La vida y los trabajos industrials de William Wheelwright en la America del Sur (Paris, 1876)Google Scholar, also available in an English translation; Argentine Republic, Registro oficial de la República Argentina, tomos III-IV (Buenos Aires, 1882-1883)Google Scholar; Castro, Juan José, Treatise on South American Railways and the Great International Lines (Montevideo, 1893)Google Scholar; and Scalabrini Ortiz, 75-76, 83-85.

9 Ferns, H. S., Britain and Argentina in the Nineteenth Century (Oxford, 1960), 313–15.Google Scholar

10 Ibid., 335.

11 “Ferrocarriles,” Gran enciclopedia argentina, tomo II, edited by Santillan, Diego A. de (Buenos Aires, 1957), 313.Google Scholar Also, Etcheguía, Gregario, Los ferrocarriles argentinos por ojos argentinos (Buenos Aires, 1938), 11.Google Scholar

12 Ferns, 313, and Rebuelto, E., “Historia del desarrollo de los ferrocarriles argentinos,” Boletín de obras públicas de la República Argentina, tomo V (Buenos Aires, November & December, 1911), 134.Google Scholar

13 Ferns, 313; Rebuelto, 135; and Scalabrini Ortiz, 24. According to Railway Gazette (London, May 25, 1910), 16Google Scholar, the rails for the original Oeste were made out of Sebastopol cannon purchased from the British.

14 Ferns, 314. Although the Oeste was merely a suburban railway in 1860, the aspirations of its directors can be seen by the names they gave to some of the locomotives they acquired after 1857. Besides the Porteña, there were the Voy a Chile (I am going to Chile), the Progreso (Progress), and the Luz del desierto (Light of the Desert).

15 Ibid. See, also, Lestard, Gaston H., Historia de la evolución económica argentina (Buenos Aires, 1937), 139.Google Scholar Typical of the degree to which the Argentines went during the nineteenth century in order to encourage foreign investors to build railways are the liberal concessions granted to the Central Argentine and the Great Southern railways. In both cases the railways were guaranteed 7 per cent profits, and were given free land, tax exemptions, and a promise that the government would not interfere in rate fixing. For details see Registro nacional …, V, no. 5899, p. 29, and Rögind, William, Historia del Ferrocarril Sud (Buenos Aires, 1937), 9, 15–17.Google Scholar

16 República Argentina, Tercero censo nacional: leventada el I de junto de 1914, tomo X (Buenos Aires, 1917), 405–406.Google Scholar

17 Ferns, 315.

18 Bryce, James, South America: Observations and Impressions (New York, 1912), 337.Google Scholar

19 Statistics are found in Tercero censo nacional …, II, 124; Ibid., X, 405-406; and League of Nations, Economic and Financial Section, International Statistical Yearbook of the League of Nations, 1926 (Geneva, 1927), 121–22.Google Scholar

20 According to McGann, Thomas F., Argentina, the United States, and the Inter-American System, 1880-1914 (Cambridge, Mass., 1957), 32–33Google Scholar, the oligarchy was “the political organization composed of the president and his associates, the provincial governors and their supporters, the national representatives who obeyed the behests of the executive, whether national or local, and the economic interests, mainly landowners, which allied themselves with these men.” See Matienzo, José Nicolás, El gobierno representative federal en la República Argentina (Buenos Aires, 1910), 322Google Scholar, and Romero, José Luis, Las ideas políticas en Argentina (México, D.F., 1956), 181-82 and 187.Google Scholar

21 Romero, 196.

22 Scalabrini Ortiz, 42-48.

23 See Etcheguía, 37, and Rögind, 156.

24 Etcheguía, 185.

25 Balestra, Juan, El noventa: un evolución política argentina (Buenos Aires, 1935), 12.Google Scholar

26 de Vedía y Mitre, Mariano, La revolución del 1890 (Buenos Aires, 1929), 29–30Google Scholar: del Valle, Aristóbulo, La política económica argentina en la década del 80, intro. and edited by Sommi, Luis V. (Buenos Aires, 1955), 162–200Google Scholar: del Valle, Aristóbulo, Discursos políticos (Buenos Aires, 1922), 126.Google Scholar

27 Cuneo, Dardo, Juan B. Junto y las luchas sociales en la Argentina (Buenos Aires, 1936), 104Google Scholar; and Romero, 193.

28 República Argentina, Cámara de Diputados, Diario de sesiones (Buenos Aires), August 5, 1907Google Scholar through September 30, 1907. Hereafter cited as Diputados, Diario …

29 A full text of law number 531, of 1872, is found in Registro nacional …, no. 9028, September 18, 1872, p. 293. Comments upon that law and the general railway regulation of 1891 are found in Bunge, Alejandro, Ferrocarriles argentinos: contribución al estudio del patrimonio nacional (Buenos Aires, 1918), 66–77.Google Scholar

30 Tercero censo nacional …, X, 406.

31 Etcheguía, 40.

32 Romero, 220. Pinedo, Federico, En tiempos de la República, tomo I (Buenos Aires, 1946), 45Google Scholar, states that Irigoyen represented “an unadulterated regressive tendency of isolationism and nacionalistic exclusivism that for moments became notoriously xenophobic.”

33 The best accounts of Battle's activities in Uruguay include Vanger, Milton I., Batlle of Uruguay (Cambridge, Mass., 1962)Google Scholar; Hanson, Simon G., Utopia in Uruguay: Chapter in the Economic History of Uruguay (New York, 1939)Google Scholar; and Batlle, Jorge, editor, Batlle, su vida y su obra (Montevideo, 1953).Google Scholar

34 See South American Journal, October 6, 1920, 301-302. Only 87 miles of new line were built between 1915 and 1923.

35 See Johnson, John J., Political Change in Latin America: The Emergence of the Middle Sectors (2nd edition, Stanford, Calif., 1962), 103.Google Scholar

36 Whitaker, 49-50. See also, Weil, Felix J., Argentine Riddle (New York, 1944), 97Google Scholar; Dorfman, Adolfo, Evolución industrial argentina (Buenos Aires, 1942), 73 ffGoogle Scholar; and articles in Anales de la Unión Industrial during the 1930's.

37 Diputados, Diario …, July 19, 1933, 349.

38 Clause 3a of the Roca-Runciman Treaty. For details of the convention see Salera, Virgil, Exchange Control and the Argentine Market (New York, 1941).Google Scholar

39 Typical treatment of the railway situation by revisionist historians can be found in Ortiz, Raúl Scalabrini, Historia de los ferrocarriles argentinos (Buenos Aires, 1940)Google Scholar: Julio, and Irazusta, Rodolfo, La Argentina y el imperialismo británico (Buenos Aires, 1934)Google Scholar; and Ortiz, Ricardo M., El ferrocarril en la economía argentina (2nd edition, Buenos Aires, 1958).Google Scholar

40 South American Journal, October 1, 1932, 314. Even though it competed with some of the British-owned railways, the highway program was encouraged by Justo in order to open up new regions and to create jobs for large numbers of unemployed laborers.

41 Economist, CXX, no. 4785 (1935), 1081.Google Scholar

42 As quoted by Diez, Manuel María, Regimen jurídico de las comunicaciones (Buenos (Aires, 1936), 105–106.Google Scholar

43 See London Times, June 5, 1936, and South American Journal, April 27, 1935, 417.

44 de Bustamente, Teodoro Sánchez, “La vialidad en la República Argentina: su evolución y estado actual,” Revista de ciencias económicas, XXII (January, 1934), 35–68.Google Scholar

45 Ortiz, Raúl Scalabrini, Política británica en el Río de la Plata (Buenos Aires, 1939), 158–59.Google Scholar

46 Ortiz was Minister of Public Works under Alvear. He had served, also, as legal adviser to several of the British-owned railways and later as Minister of Finance under Justo. He was consistently sympathetic to the railway's position.

47 According to figures prepared by Bunge, Alejandro for the Revista de economía argentina, XXV, no. 221, p. 176Google Scholar, the colectivos carried over 45 per cent of the Buenos Aires passenger trade in 1934 and close to 49 per cent in 1935.

48 In fact, the large Unión Ferroviaria, union of those railway workers not involved in the actual operation of the locomotives, passed a resolution in favor of a transportation coordination as early as June 27, 1933. For a copy of their resolution see Diputados, Diario …, September 26, 1935, 549-50.

49 The 7 per cent guaranteed profit was not included, in the text of the law as it was passed by the Chamber of Deputies on September 26, 1935. It did appear in the Senate version of the bill passed on September 30, 1936, however, and its mysterious addition was never fully explained because Conservatives refused to permit an investigation of the situation.

50 For accounts of the strike see Review of the River Plate, October 2, 1936, 9; Financial Times (London), September 26, 1936Google Scholar: and South American Journal, October 3, 1936, 329.

51 Guaresti, Juan José, “La coordinación de los transportes,” Revista de ciencias económicas, XXIII (May, 1935), 525–38.Google Scholar

52 Diputados, Diario …, September 19, 1935, 41, 78, and Ibid., September 25-26, 1935, 305, for typical arguments.

53 La Res, as quoted by South American Journal, August 22, 1936, 180.

54 For the text of the decree see Diputados, Diario …, December 28-29, 1936, 920-22.

55 This opinion is shared by Salera, 161-62; Rennie, 241; and Scalabrini Ortiz, Historia de los ferrocarriles argentinos, 210.

56 Diputados, Diarto …, May 19, 1937, 37.

57 For an informative study of Argentine public opinion towards the foreign-owned railways during the 1930's see “A Vigil” (pseud.), Railway Propaganda and Publicity (Buenos Aires, 1939).Google Scholar

58 South American Journal, October 29, 1939, 424; Ortiz, Roberto M., Mensaje del presidente de la nación, 1939 (Buenos Aires, 1939)Google Scholar. According to Tornquist, Ernesto, Business Conditions in Argentina, no. 223 (July, 1939), 67Google Scholar, the receipts and profits of the railway increased noticeably under state ownership.

59 Universidad de Buenos Aires, Facultad de Cieneias Económicas, Instituto de Economía de los Transportes, Los ferrocarriles argentinos de capital privado en los últimos once años, 1928-1939: posibilidad económica-financiera de su nacionalización (Buenos Aires, 1940).Google Scholar

60 Alberdi, Paulino González, La situación económica del país: el plan Pinedo, plan de la oligarquía (Buenos Aires, 1941), 19–21.Google Scholar Pinedo was said to have received £10,000 from the British railway companies for his services. See South American journal, March 22, 1941, 207 for more details.

61 See Tornquist, no. 244 (October, 1944), 107, and ibid., no. 245 (January, 1945), 25.

62 Ibid., no. 250 (April-May, 1946), 54; and Economist, November 30, 1946, 884.

63 Perón as quoted in Senadores, Diario … June 26, 1946, 64.

64 Review of the River Plate, July 5, 1946, 6. Sir Wilfred Eady should not be confused with the chairman of the railway mission, Sir Montague Eddy. Because of the similarity of their last names their full names will be used whenever there is a chance of confusion.

65 Ibid., and Economist, August 31, 1946, 344-45. Argentine meat comprised about 25 to 35 per cent of the British meat supply. The British bought nearly 80 per cent of Argentina's surplus meat.

66 For details see Diputados, Diario …, July 5, 1946.

67 Economist, September 14, 1946, 425.

68 Perón's address of September 17, 1946, was republished in South American Journal, September 21, 1946, 133 and Review of the River Plate, March 5, 1948, 4.

69 La Nación, September 21, 1946; La Prensa, September 19, 1946; La Vanguardia, September 24, 1946; and Diputados, Diario …, September 25, 1946, 3567.

70 Diputados, Diario …, 3567. Peña Guzman added that, “the origin of the mixed company was proposed by the British railway directors in order to guarantee protection of their capital investment … Giving such privileges is a rare concept of Argentinidad.” Argentinidad was a term coined by the liberal cultural nacionalist Ricardo Rojas to explain the integral characteristics of being Argentine.

71 London Times, February 13, 1947; La Prensa, February 13, 1947; and Review of the River Plate, February 14, 1947, 15. The purchase price was equivalent to £150,000,000, or $600,000,000. The British railway holdings came to approximately 16,000 miles and associated holdings included real estate, grain elevators, station buildings, and one oil refinery.

72 President Perón Speaks to Members of the Banking and Monetary Committee of the House of Representatives of the United States of America (Buenos Aires, 1951), 12.Google Scholar

73 Economist, July 27, 1946, 154; and South American Journal, July 20, 1946, 27.

74 Economist, September 28, 1946, 515; Buenos Aires Herald, January 15, 1947; London Times, February 13, 1947; and Financial Times, January 15, 1947.

75 South American Journal, November 9, 1946, 214.

76 Ibid. Secretary of the Treasury Snyder's correspondence with Dalton was made public in February, 1947, and is discussed in Economist, February 8, 1947, 235-36. According to Torres, José Luis, Una batalla por la soberanía (Buenos Aires, 1946), 11Google Scholar, many Argentines feared that the British would transfer their railway holdings to the United States in order to pay the latter the British war debt.

77 Perón, Juan D., La fuerza es el derecho de las bestías (La Habana, 1956), 32.Google Scholar

78 New York Times, February 13, 1947.

79 EI Obrero Ferroviario, November 1, 1945, 5, and ibid., August 1, 1946. See South American Journal, June 22, 1946, for information concerning the resolution of La Fraternidad.

80 See El Obrero Ferroviario, March 1, 1947, 10.

81 From ‘Los Ferrocarriles son argentinos,” Hechos e ideas, VII (Buenos Aires, February, 1948), 385.Google Scholar

82 The ceremony of March 1, 1948, is described in detail by La Prensa, March 2, 1948, and by El Obrero Ferroviario, March 16, 1948. Also see New York Times, March 2, 1948.