Fields of Maize.It is said the profits of a single harvest have repaid the cost of the land.
Fields of Maize.
It is said the profits of a single harvest have repaid the cost of the land.
Still, the fact remains that, due largely to the popular conception of the Argentine as the new Eldorado for European manufacturers, enormous sums of money are annually being wasted by ill-advised effortsto secure business for which competition has suddenly become keen. Now, we have to remember that with a borrowing people an element of thriftlessness is inevitable, and that there is a necessarily high percentage of wastage in the heavy loans which the country has secured from Europe. Hence that general sense of prosperity and abundance which on closer examination is often found to be more apparent than real. Right through the Argentine this spirit of borrowing prevails. They are a nation of borrowers, and in all ranks of society—by which is meant the various divisions graded according to the supposed dimensions of their banking accounts or their credit—the one notion of doing business is by drawing on the Bank of the Future. The countless thousands of land-sales, which have brought unequalled prosperity to one class of the community and riches to the leading newspapers (daily crammed with advertisements of these auctions) have been and still are conducted on the principle ofmensualidades, or monthly payments. The hire purchase system is universal. Mortgage banks abound and flourish on interest rates that range anywhere from 8 per cent. to 14 per cent., many such banks offering depositors 7 per cent. per annum for their money, which they lend out at 10 per cent. or 12 per cent. to help landowners in the development of their properties. You will be told by local residents that this high rate of interest is perfectly compatible with the capabilities of the country, and that the Englishman, with his time-honoured notions of 4½ per cent. on land mortgage, is a hopeless back number in the Argentine. There may be some truth in this, but it is difficultto get away from the feeling that there is the hectic flush of unhealthiness in any system that demands such high rates for its financial accommodation.
As one could fill a whole book discussing nothing else than the aspects of the various branches of commercial enterprise, all so different in their essentials from most of our home conditions, I am making no attempt to enter into detailed consideration of the subject, but to illustrate broadly the danger I have hinted at, arising from the almost uncanny feeling of prosperity which the peculiar conditions of the country have induced.
I may touch briefly on the motor-car business. Although, as I have already stated, there are few countries in the world less attractive from the point of view of motoring than the Argentine, where roads such as we know them in Europe, or even in North America, simply do not exist; and no large city so ill-adapted for motoring as Buenos Ayres, where the principal streets are extremely narrow and badly kept, while those of the suburbs are almost entirely unpaved; the popularity of the motor-car as an article of luxury and ostentation is supreme. The importation of expensive cars was proceeding in the most reckless manner during my stay there in 1912, with the result that I was informed by one of the leading automobile dealers whom I met in Chili some six months after leaving the River Plate, and who had come over to spy out the Transandine possibilities, that it was estimated by the various houses dealing in cars at the end of the 1913 season that there were no fewer than twelve hundred unsold cars in the store-rooms of the numerous agenciesin Buenos Ayres. In the previous season, I think the highest number I saw on a motor-car was in the 4000’s. No wonder there was general talk of “the Motor Crisis” in 1913!
In my walks abroad during 1912, it was an endless source of wonder to me to contemplate the folly of the European companies in their mad scramble for this business. I saw dozens of establishments being opened at enormous cost, stocked with expensive cars and served by retinues of gorgeous youths who were to sell these to the fabulously wealthy Argentines. In eight months’ time, I saw more than one of those splendid establishments shut up, and doubtless since then many another has pulled down its shutters (the use of metal shutters which pull down from above is universal). Of one in particular I secured some inside information. It was a German concern, and it took a magnificentexposicíonin a fashionable quarter, paying a rent of $4,000 per month. In the first nine months, it had sold some thirty-five cars, the total value of which did not greatly exceed the rent of the show-room. In addition to the show-room, the concern in question required a large warehouse and repair shop in another part of the city, so that the man of business will be able to gather how such an enterprise was likely to end. Moreover, most of those cars were sold at so much “down,” and the remainder in ten monthly instalments. I suppose it is a safe assumption that more money has been lost in the motor-car business in Buenos Ayres than is likely to be made in it for some time to come.
One particularly astute foreigner with a large stockof unsold cars devised a most admirable selling scheme. He made a bargain with a number of willing scoundrels that each should go to a certain organisation which provided any conceivable article to its customers on the instalment system, exacting from the customer an increased price, and from the seller of the article a substantial discount. These accomplices of the motor agent, each through this medium of the purchasing agency, bought one of his motor cars, tendering the initial payment, the money for which had been supplied by him, and the buying agency in due course furnished the car, paying the vender his trade price for it. Each car sold in this manner immediately came back into the possession of the vender, and naturally the accommodating financiers soon discovered no second payments were forthcoming. I understand this enterprising motor-dealer had thus netted quite a respectable sum on his surplus stock before his good work was interrupted by an unwillingness on the part of the purchasing agency to continue!
All this will serve to suggest the general looseness of business methods and the accompanying wastage that is going on, which can be attributed to no other cause than the ease with which the country has been able to borrow, and the avidity with which foreign manufacturers have taken the bait by rushing into the market without due consideration of its risks and the characteristics of the people with whom business has to be done. In no wise do I wish to belittle the commercial possibilities of the country, for I am a firm and convinced believer that South America generally is “the Coming Continent,” and that Buenos Ayres isprobably the most attractive of the newer business centres of the world to-day, with limitless opportunities for sound commercial expansion to European and North American manufacturers, but by reason of its very attractiveness, the freedom with which money circulates, and the readiness with which the people burden themselves with responsibilities, the desideratum in all business enterprise is not boldness, but caution.
One of the most experienced native business men assured me that in land speculation, which is even a more popular form of gambling than the public lottery—servants and street porters actually owning “lots” they have never seen, and never will see, and for which they are paying every month,—the venders never hesitate to make the number of instalments run into several years, in order to make the individual instalment as low as possible, because the purchaser, incapable of a “long view,” in no case realises the burden he is accepting, and merely looks at the amount he has to pay monthly. The sum total of payments is seldom mentioned, the accepted formula being a small initial payment and anything from twenty-four to sixty mensualidades, also of comparatively small amounts. The vast majority of the buyers never complete their purchases, surrendering, after a year or two, what they have paid, together with the land, to the seller, who will probably resell it to another purchaser, who will also make default, and in this way the land speculator grows rich.
Every day the newspapers contain particulars of some fresh scheme for relieving the public of their money; sharks abound, and their variety is endless.From the point of view of the foreign manufacturer, one of the most pernicious forms of unfair trading is that practised in connection with the registration of trade marks. The law grants the sole title in a trade mark to the first person who registers it, and exacts from him no evidence whatsoever that he is registering that which is his own property. The outcome of this delightful state of affairs is that a fraternity of longsighted speculators has grown up in Buenos Ayres, whose business is to keep in close touch with the commercial worlds of Europe and North America, and the moment a manufacturer places a new article on these markets and registers his trade mark, one of these gentry hastens to secure the proprietorship of that trade mark for the Argentine, registering it as his own. His next movement—which may be delayed for a year or so—is to write to the foreign manufacturer and to state that he shall be very pleased to act as agent for the article in question, which he thinks he can sell to advantage, and indeed so confident is he of being able to handle it successfully that he has taken the trouble to register the trade mark. The manufacturer, if he wishes to introduce the article in South America, must then either appoint this nimble gentleman his agent or pay him an extortionate price for the right to sell his own article under its original name.
One example of how this works will suffice. The Oliver typewriter is sold in the Argentine by its duly accredited agent as the “Revilo,” because an enterprising citizen had forestalled the owners by registering the name “Oliver” as applied to typewriters, and the company, neither caring to appoint him itsagent nor to pay for the privilege of selling their typewriter there, adopted the plan of labelling their machines for sale in the Argentine with the name spelt backward! Some famous brands of Scotch whisky cannot be sold in the Argentine, as a Jewish gentleman is in possession of their trade marks, which he registered in anticipation, and thus the whisky drinker will discover all sorts of unfamiliar brands specially prepared for export, while it is possible that the purloiner of the familiar trade mark may arrange to bottle any sort of vile rubbish under the well-known label. This is a state of things, of course, that can easily be met by the foreign manufacturer, whenever he is introducing any new article of consumption, taking care to have it formally registered in the Argentine at the same time that it is placed on the home market, so that if in the future he should wish to export it, he will be able freely to do so.
Owing to the accessibility of legislators to influence and bribery, all sorts of abuses arise. In Montevideo, for instance, a typical case came under my personal knowledge. A large British manufacturing house, which for many years had been supplying an article of wide consumption throughout South America and in Uruguay particularly, suddenly discovered that an excessive import tariff had been placed upon it. A large consignment of the article in question arrived in the harbour of Montevideo two or three days after the passing of the Act, and a battle royal ensued between the representative of the British company and the Customs officials, who endeavoured to exact the new tariff, but who were eventually defeated on the groundthat the tariff did not date from the passing of the Act, but from the signing of the same by the President, which, fortunately, had not taken place until two or three days after the arrival of the cargo. This increased tariff had been imposed solely on the initiative of an ambitious Uruguayan, who had determined to manufacture a competitive article locally and got his friends in thecámarato assist him by choking off the foreign competitor. The result was that the British firm had immediately to buy land and build a factory in Montevideo in order to get “inside the tariff,” which they did before the bungling native was able to work out his own plans, and so completely outwitted him. The probability is that the tariff will again be taken off, and the British company will be able to make the Uruguayan consumer pay for the inconvenience and expense which the unsuccessful trickery of their compatriot incurred.
Bags of Wheat awaiting Shipment at a Railway Station.Three Huge Piles of “Jerked Beef” outside a “Saladero,” or Curing Factory.
Bags of Wheat awaiting Shipment at a Railway Station.
Three Huge Piles of “Jerked Beef” outside a “Saladero,” or Curing Factory.
Before turning from this subject, I must add a final word about the extraordinary incompetency of native labour, already mentioned, which conditions to so large an extent the business life, not only of the Argentine, but of all South America. Inefficiency is the keynote of the Spaniard as a worker. A complete indifference to the pressure of time is another of his characteristics, and both of these we find more or less eminent in the South American. The Argentine himself is steadily escaping from the influence of his Spanish original, and will eventually become a more wide-awake, competent, and altogether a more intelligent worker. But even so, he has still to rid himself of innumerable faults in order to come into line withwhat modern industrial conditions exact from the worker in France, Germany, and Italy, in Great Britain and in North America. The tradesman will dismiss you with the blandest assurances of completing the work he has in hand for you “to-morrow,” and probably you will discover a week later he has not yet begun it. He doesn’t care a hang whether you are pleased or not. The professional man will make no attempt whatever to keep an engagement within half an hour of the appointed time, and the employee does not believe that the interests of the employer and his own can ever possibly be identical.
There is but one way to deal with the Spanish-American worker, and that is never to encourage him, never to express your approval of his work, never for one moment to let him feel you value his services, and never voluntarily to advance his wages! The master who finds his native helper really useful and shows his appreciation by doing any of these things will speedily have to meet a demand for an impossible increase of wages, or to suffer the annoyance of seeing his employee “slacking” at every opportunity and assuming an attitude of disregard for his interests. The man reasons that if his master thinks so well of him as to advance his wages without a request, or to express his satisfaction with his services, he has become so invaluable to that master that he can presume on him by taking liberties which a less useful worker would not expect to be allowed. Presently, the only thing his master can do is to discharge the man whom he has thoughtlessly encouraged, and it may be that the latter will retaliate by waiting at the door andeither shooting or stabbing the misguided employer.
Especially in handling thepeonesis it necessary to maintain the severest, almost the most brutal conditions of discipline. Among my acquaintances in the Argentine is a wiry little Englishman, whose reputation as a disciplinarian is so widely known that his services are much in request to “clean up” estancias where unsuccessful managers have allowed slackness to prevail among the hands, or “arms,” rather: agricultural labourers being collectivelybrazosorbraceros, though the latter term is also used in the singular. He looks the last man in the world for the job, having more the appearance of a natty, little London lawyer. But he was wont to ride among the rough Italian and Gallego labourers, always complaining about the inefficiency of their work, and if one ever muttered a protest, he calmly smashed him to the ground with a well-directed blow on the forehead from the butt of his loaded riding whip. On various occasions he has even gone so far as to have two peones seize one of their number who had retorted to some complaint, carry him to a barn and strip off his shirt, and after having him tied to a post, personally apply a substantial number of lashes to his back. It might be thought that this was just the type of man to receive a shot some night, or a stab in the back, but that is not the way of things in South America. He has gone about his business for nearly thirty years and has won the respect of the creatures he has knocked down and flogged, as well as that of all the others who did not wish to feel the weight of his strong hand. No, the type of employer more likely to be assassinated is hewho has treated his employees with ill-directed kindness.
I met a gentleman, the manager of an estancia, at our hotel in the middle of one week leaving for his home and heard the following Sunday that he had been shot dead by a labourer on the Saturday, because he would not re-employ the man whom themayordomohad discharged during the manager’s absence. The fellow had no grudge against the man who discharged him, who was probably in the habit of making his arm felt among the workers, but the manager, who had shown a kindly interest in the peones and braceros, and could, had he wished, re-engage this one, was the natural object of his vengeance. Another gentleman with whom I came into occasional relationship was shot dead one evening by one of his workers because he would not advance him a day’s money, declaring that he already had received sufficient for the week. Wages are paid nominally by the month, but improvidence is so common among the workers that seldom has a man, no matter his status, to draw his full pay at the end of the month, continual advances having been asked for week by week.
Therefore any North American or European house that purposes branching out in the Argentine is faced with difficulties that do not exist, at least to the same extent, in almost any other great centre of trade, and some allowance must be made to discount these in money values from the cost of doing business there.
Blackmail and “graft” entering so largely into business and politics, it would be surprising were it entirely absent from the Press. In proportion to itspopulation, Buenos Ayres probably supports more periodicals than any other city in the world. There are about fifteen morning and evening journals devoted to Argentine interests, “national” newspapers; two dailies which cater for the Spanish community in distinction from the native Argentine; three or four Italian morning and evening papers; two English dailies (one of which has a wide circulation and is extremely profitable to its proprietors); two French dailies; two or three flourishing German dailies; one Turkish daily (containing four pages about the size of a New York evening paper, printed in Arabic characters), and weekly, semi-weekly, bi-weekly, and monthly publications almost innumerable, catering for all manner of interests and representing a veritable babel of tongues—Yiddish, Scandinavian, Syriac, Russian, Greek, Catalan, Basque, to mention a few at random. A mere glance at a list of these journals would be sufficient to indicate, even to the uninitiated, that they cannot all be getting an honest living. Those that are conducted on strict business principles are relatively few; the blackmailer is busy on the others. His methods are simple, naïve to a degree. The advertising manager calls upon you and states that he has seen your advertisement inLa Prensa,La Nacion,La Razon,La Argentina, orEl Diario, all of which are reputable and important journals, and that he would like you to put it into his paper, and if you do not think of doing that, his editor is contemplating publishing an article attacking you, and it would be a pity to let that appear. They are foolish indeed who allow such threats to induce them to use space in any ofthe numberless rags that issue from obscure printing offices, as the circulation of these sheets is so small, their influence so contemptible, that it would scarcely matter whether they published a full page denouncement of a Calle Florida tradesman as a thief and a swindler and offered their paper for sale at his door, so little attention do the general public pay to them.
On the other hand, there is an abundance of good journalism, and neither New York nor London can produce more profitable mediums of commercial publicity than several of the daily papers already named, or such weeklies asCaras y Caretas,Fray Mocho, andP. B. T.Relatively, the advertising rates in all these journals are higher than in American or British publications of the same circulation, but the ready response to the advertisements in them not only compensates for the difference in cost, but makes them work out cheaper mediums of publicity than the average in North America or Great Britain.
From every point of view, the Argentine offers to the man of business almost unequalled opportunities, but, as I have endeavoured to illustrate in this chapter, it has the defects of its merits, and he who imagines it a veritable gold mine where there is no more to do than pick up the nuggets and bring them home, is the most deluded of optimists. It will give rich return for industry, for intelligence, and for honest merit, but while the business man in search of new fields of enterprise may reasonably expect to do relatively better in the wonderful Argentine than in most other markets of the world, what I have written may show that business life in Buenos Ayres is not entirely a bed of roses.