The message is a plain document that deals in a general way with the
affairs of the country. It is quite hopeful, even optimistic, in
sentiment, but contains little but what was already known. Its delivery
was awaited with much interest by the public in the expectation that it
would be full and explicit on two points deemed of vital importance at
this time, namely, international relations and the financial situation.
Especially was there a good deal of curiosity to know the status of the
negotiations carried on through the friendly mediation of the British
Government to bring about an agreement for limitation of armaments
between the Governments of Argentina and Chile, but the general way in
which this matter is treated in the message was a great disappointment.
It is probable that the President would have been more explicit as to
the state of such negotiations had not the untimely death of Dr.
Alcorta, minister of foreign relations, occurred, which doubtless had
the effect to put its consideration temporarily in abeyance, rendering
it inconvenient to do more than refer to such negotiations in a general
way.
The circumstances which led to the suggestion for a mutual limitation of
armaments seem to have arisen from conditions prevailing in Argentina
and Chile materially affecting their credit and welfare. Both countries
have incurred heavy expense for the equipment and maintenance of largely
increased army and naval forces. Chile has recently contracted for two
formidable warships involving a heavy cost with the object of putting
her navy upon an equality with the
[Page 14]
Argentine navy, whereupon Argentina, not to be outdone, contracted
for two war ships larger in size and perhaps more formidable at a like
heavy cost in order to continue and maintain her naval superiority. The
costly expenditures incurred on account of war and naval preparations is
paralyzing industrial activity and commercial enterprise. Both countries
are largely in debt and confronted with a deficit. Botli have
appropriated their conversion funds which had been set apart for a
specific purpose, and which, it would seem, should have been preserved
inviolable. Neither is able to make a foreign loan without paying a high
rate of interest and giving guarantees to meet the additional expenses
which their war policy is incurring, and both Governments know and their
people know that the only remedy to which either can resort to meet
existing financial conditions is to levy fresh taxes of some
description, notwithstanding nearly everything that can be taxed is now
taxed to the utmost limit. The weight of taxation already imposed bears
heavily upon the energies and activities of the people. The outlook is
not promising, business being dull, wage employment scarce, and failures
frequent. With this condition of affairs confronting them, Argentina and
Chile fully realize that their war policy is fraught with ruinous
consequences to their credit, their Governments, and their people, and
that the dictates of wisdom and common sense demand that some means
should be devised of stopping costly expenditures.
In Chile as in Argentina, the British people own large and valuable
property interests of various descriptions, much larger in the latter
than in the former, * * * and they are anxious, even eager, to have a
peaceful solution of pending difficulties, believing that its effect
would be to relieve business depression and improve the financial
condition of both countries.
Looking at this condition of things, it would be reasonable to suppose
that Argentina and Chile would be in a favorable state of mind to listen
to any suggestions having for their object the curtailment of expenses
and leading to a better and more friendly understanding. The purchase of
the two war ships by Chile, involving a heavy expense, was certain to be
followed by a like increase in the naval force of Argentina, and this
circumstance, in connection with those to which I have referred, seems
to have led to the suggestion that the best way to stop further
expenditures was for both countries to agree upon a mutual limitation of
armaments.
It is supposed that the Chilean Government hinted to Mr. Lowther, the
British minister at Santiago, that it would view with pleasure his
intervention in favor of disarmament. Mr. Lowther, by letter,
communicated this information to Sir William Barrington, the British
minister in Buenos Aires, who at once tendered his good offices to the
Argentine Government with a proposition for disarmament, embodying, it
is said, the canceling of orders for the ironclads which the Argentine
Government then had under consideration. It is understood that the
Argentine Government refused to entertain this proposition. And, at this
stage of the negotiations, it is also understood that the British
Government had absolutely nothing to do with the proposition. These
events occurred sometime between the 15th and 30th of April. In the
meantime Mr. Concha, the Chilean minister, who had been on a leave of
absence, returned to Buenos Aires and immediately placed himself in
communication with the Argentine
[Page 15]
Government and, as I understand, offered a proposition more restricted
in its teims and to the effect that no further armaments should be made,
and that the two countries should restrict themselves to those already
ordered. At this time the Chilean Government had already ordered two
ironclads, and it is supposed that, if the Argentine Government should
accept the proposition to make no further armaments, Chile would have
equal, if not greater, naval strength than Argentina. If this
supposition is true, the Chilean Government was under a wrong
impression, for the Argentine Government had already ordered the
construction of two ironclads which would continue her naval
supremacy.
About this time General Mitre, who now stands high in the councils of the
Argentine Government, wrote an article for La Nación, an influential
newspaper, edited by his son, taking the ground that the Argentine
Government should not interfere in Pacific coat troubles.
This article exerted a great deal of influence, but considerable
opposition was expressed to its views, as a lively feeling of sympathy
has always existed here in favor of Peru and Bolivia since their war
with Chile. The Mercurio, of Santiago, noticing this article, stated in
substance that, if it should be the policy of the Argentine Government
not to interfere in the affairs of the Pacific, it would open the road
to good feelings and be a guaranty to better relations between both
countries. The Chilean Government has always maintained that the
Argentine Government should not meddle in the affairs of the West coast.
* * *
Referring now to the negotiations pending, after the proposition for a
limitation of armaments had been initiated as above mentioned, the
British Government tendered its friendly mediation, and the negotiations
since have been conducted by its respective ministers under its
auspices, as appears in the Presidential message.
These are the facts and circumstances, as far as I am able to gather
them, leading to the initiation and connected with the progress of these
negotiations, which have been conducted with much reserve, rendering
their ascertainment difficult. The result of such negotiations, which
were temporarily interrupted by the death of Dr. Alcorta, are now
awaited with much interest and curiosity.
The financial portion of the message fully sets forth all matters
connected with the debt revenue, etc., and is decidedly optimistic in
tone. The President evidently does not share the fears entertained by
the people with reference to the financial condition of the country.
This portion of the message has attracted a good deal of attention and
provoked some criticism as to its statement. The President refers to the
steps being taken toward the settlement of the boundary question, to the
policy of the Government in favor of arbitration, and also refers in
complimentary terms to the army and navy, and states that the ministry
of agriculture intends to forward colonization and settlement of the
country. Outside of the financial statement, there is nothing of
particular importance in the message. The President has evidently held
in reserve much that he would have more fully and definitely stated if
the delivery of his message had come later.
As the message was so meager in its reference to the negotiations now
pending for limitation of armaments, I concluded that it might be of
interest to detail the facts and circumstances as I understand them.
[Inclosure.—From the Standard, May 9,
1902.]
Extracts from the President’s
message.
Senators and Deputies:
I come to open your ordinary session under the sorrowful impression
caused by the unexpected death of Dr. Amancio Alcorta, minister of
foreign affairs, whose disappearance from among us has profoundly
afflicted the whole country, which loses in nim one of its noblest,
most constant, and most disinterested servants.
The Republic is at peace with all sovereign states. The boundary
questions have been already settled, or are in the way of being so,
in the regular course established for the purpose in the respective
conventions.
In order to draw closer our relations with the civilized world, and
especially with the countries of America, we have celebrated several
arbitration treaties which will, in due course, be submitted to you
for consideration; and we have assisted at the second international
congress, held in Mexico, all the States of the continent being
there represented, and where the delegates of this country
faithfully represented our international policy.
We have, in fact, a foreign policy sanctioned by a long tradition, in
accordance with which we have invariably sought, either by direct
agreement or by arbitration, a friendly settlement of all our
differences and this policy has never been altered, even by the
extreme exigencies of war or victory.
This invariable course of conduct should also have its influence in
the pacific termination of all other differences, although they may
arise from incidents or complications which, by arousing national
sentiment and awakening natural distrust, force us to increase our
military strength, as has happened on several occasions, putting the
patriotism and vigor of the country to the test. No state has a
right to consider this course in the light of hostility or offense,
as it is simply dictated by self-defense, considering the precedents
on record, our respect for the independence of others, and the
sentiments of justice and international fraternity which we have
always endeavored to diffuse in this part of America.
We can thus consider at an end the last boundary question which we
had with Chile, which was submitted by both sides to His Britannic
Majesty for arbitration. A distinguished expert sent by him is now
surveying the territory in dispute, and his report will precede the
award on this last territorial question bequeathed to us by the
colonial régime.
The just expectations of the two peoples directly interested in this
long boundary dispute and those of the nations that have large
commercial interests at stake in them will be sorely defrauded if,
once the award is given, all distrust and uncertainty do not vanish,
and we can not have full enjoyment of the benefits of peace, thus
reestablishing between the two countries the cordial and frank
relations that should never be interrupted.
finance.
The financial situation at the beginning of the presidential period
toward the end of 1898 was difficult and complicated. At that time
Congress passed a law authorizing the Executive to contract a loan
of $30,000,000 gold, guaranteed by the proceeds of the alcohol tax
and without specified limits of interest and amortization, voting a
lump sum of $4,000,000 gold per annum to cover the service. The
product of the loan was to cancel the floating debt.
The loan, however, was not carried through because the proposals did
not satisfy the Government. Meantime, as it was indispensable to
meet heavy obligations, a plan of unification of the public debt was
laid before Congress, but I deemed it advisable to withdraw it, even
after the sanction of the Senate had been obtained, in view of the
opposition on the part of the public.
This plan having been replaced by the projects submitted to and
approved of by you in the same year, the Executive has availed
itself discreetly of the resources which accrued, thereby
vanquishing the difficulties and attending to obligations which had
their origin either in the past or proceeded from extraordinary
circumstances. In order to appreciate with exactitude the actual
situation it is necessary to consider the difficulties with which it
was surrounded.
The revenue has been greater than in other years and greater than the
estimates. The latter, according to the budget, were calculated at
$62,300,000 paper and $37,991,718 gold, whereas the revenue returns
were $62,341,306 paper and $38,244,638 gold, giving a surplus of
$600,000 paper over the estimates and of $850,000 paper over the
revenue of 1900.
The gold revenue for years past has shown almost a constant increase,
but the paper revenue has fluctuated. The latter in 1897 stood at
$61,000,000, dropped to
[Page 17]
$50,000,000 in 1898, only to expand again to $61,420,000 in 1899,
which figure has been exceeded in the last two years.
The budget fixed the expenditure for 1901 at $92,466,605 paper and
$26,025,175 gold, and the expenditure effected was $23,835,847 gold
and $91,160,225 paper.
The surplus of gold revenue over the gold expenditure was sufficient
to cover the deficit in paper and leave a net surplus revenue of
about $4,000,000 paper.
By decrees of the Executive $380,327 paper was spent on post-office
and telegraph service and on the Sociedad de Beneficencia de la
Capital.
In the finance report you will find other data relating to sums paid
in virtue of special laws.
The home consolidated debt on December 31, 1901, stood at $89,610,983
paper and $17,863,000 gold. But in the paper debt is included
$8,200,000, served by the National Bank ($7,000,000) and by the
province of Tucuman ($1,200,000). The gold debt is almost purely
nominal, comprising $12,698,400 of the free banks law, which, held
by the Banco Nacional, return neither interest nor amortization. As
the Banco Nacional in liquidation is debtor of the National
Government to a much larger amount, the Government can withdraw and
burn these bonds, and it is advisable that this be done. In the gold
debt also figures $1,514,500, served by the National Mortgage
Bank.
It is shown, therefore, that the home debt of the nation really
amounts to $81,410,983 paper and $3,268,000 gold.
The amortization effected during the year amounted to $7,689,500
paper and $74,500 gold, but as some bonds were emitted corresponding
to withdrawal of national-bank shares and consolidation of floating
debt, the reduction really on the year only amounts to $3,853,000
paper and $74,500 gold.
The foreign debt apparently on December 31, 1901, stood at
$386,451,295 gold. In reality it is much smaller. In the above sum
is included $46,487,468 gold, of which the service is paid by the
provinces of Buenos Ayres and Santa Fe and by the Banco Nacional.
Furthermore there is included $29,858,371 gold in bonds, the
property of the nation. Besides this the provinces of Cordoba and
Entre Rios contribute with the amounts specified by the budget to
the service of their debts.
Discarding, therefore, these partial amounts which do not properly
constitute a debt or national burden, it can be said that the total
foreign debt of the nation is in round figures $300,000,000, which
will be constantly reduced by regular amortization.
The Executive has spared no effort to prepare and assure better
credit for the nation, neglecting no economy which could be
conciliated with proper administration and the exigencies of
military organization. The service of our public debt has been most
punctually attended to and will be continued as one of the most
sacred compromises of the country. There are certain extraordinary
items of expenditure which will require extraordinary
appropriations, and the minister of finance will in due course lay
before you the projects which have been prepared to this end. Every
plan in this respect must be based upon the reduction, to utmost
possible extent, of our ordinary expenditure. Our rule should be to
suppress what is not necessary, to reduce even what is useful, and
postpone what is not urgent and indispensable until the pressing
difficulties of the moment pass.
* * * * * * *
commerce.
Every day sees our commercial and industrial action extending, in
spite of various calamities. Our production in all its branches is
increasing considerably and the sources of public wealth are intact.
The balance of our commercial and industrial movement is always
favorable. Our imports and exports in 1900 totaled $268,000,000
gold, and in 1901 they were $281,675,000 gold—say a round increase
of $14,000,000 gold. In 1900 our exports were $41,000,000 more than
our imports, and last year the difference was $53,700,000. Our
exports in 1900 amounted to $154,600,000. Last year they were
$167,700,000, an increase of $13,000,000.
In the $167,700,000 are included our estancia products, more than
$90,000,000— that is, $20,000,000 more than in the preceding year.
And this increase is all the more remarkable since the exportation
of live stock was necessarily reduced in consequence of the closing
of British ports. On the other hand, frozen and preserved meat
exports rose and the export of wool shows an increase of $16,675,000
gold over the figures of the preceding year.
The decrease in agricultural products is insignificant when compared
with these figures. It is only $5,800,000.
If our wheat exports show a considerable falling off, the exportation
of other grain shows an increase that almost makes up for the
falling off in question. Our total agricultural exports were
$71,596,000.
[Page 18]
The returns for the first quarter of this year are not less
favorable. Our exports and imports total $84,296,000, our exports
being $29,000,000 more than our imports. In 1901 the surplus for the
same period was not more than $17,000,000. It is noticeable, in this
first period of the year, that our cattle products more than make up
for the passing falling off in our agricultural products, and
principally wheat, owing to the bad harvests in Cordoba, Santa Fe,
and Entre Rios. Notwithstanding, there has been a very perceptible
improvement in the value of other agricultural products,
particularly linseed.
Our inland, fluvial, and coasting trade shows a healthy increase. In
1900 it was $50,221,000 gold. Last year this figure was $64,621,000
gold. The increase of our trade with the South is deserving of
special notice, for this trade was in 1901 $4,160,000; that is,
double the figures of the preceding year.
All these figures go to prove that the country possesses in its
sources of expansion and development ample means to overcome those
unavoidable crises to which young nations are exposed owing to their
overconfidence in the vigor of their force and natural riches.
* * * * * * *
chilean imbroglio.
Of late years the Republic has been put to the severest tests in
economic and financial matters and in affairs of an international
character, and it has dominated them all or is doing so with
prudence and energy.
The nation now rests on firm foundations and is easily recovering
from the profound crises through which it passed, having acquired in
them painful but useful experience for the future, for there is no
evil nor public misfortune that does not teach an advantageous
lesson. It was thought that the Argentine people had given itself up
exclusively to commercial speculation, to the desire of lucre and
srain, and that it had become enervated in those noble moral
faculties that constitute the soul of a nation, but the threat or
suspicion of a danger from abroad was sufficient to rouse it and to
make it reveal all the energy and military strength which it is
capable of displaying.
The economy of the country has not suffered from the great efforts
made to acquire the armaments demanded by the circumstances.
Happily, it appears that a better and more cordial understanding will
be established in our relations with the Chilean Republic,
negotiations having been opened in Santiago through the friendly
mediation of the British Government for the rational limitation of
the armaments which are pressing on both countries with great
prejudice to their credit and well-being.
The vigor of a people can be best appreciated in difficult moments,
and as we have never weakened or retroceded in adverse
circumstances, we ought to have more confidence than ever in the
future destinies of the Republic.
With this conviction, and invoking the favors of Divine Providence
for your deliberations, I declare open the legislative period of
1902.
