The Washington herald., 1921-05-23
ARGENTINE ROADS
ARE NOW FACING
HUGE DIFFICULTIES
Marked Prosperity Dur.
ing Fiscal Year 1920
Passes.
DUE TO TWO CAUSES
Heavy Costs and Shrinking
Traffic Necessitate Higher
Charges.
DUE TO TWO CAUSES
BY JULIUS KLEIN.

at Buenos Aires.
A series of conferences which bid
fair to make railroad history in Ar
gentina have beer going on in Bue-
nos Aires since the latter part Of
March. The participants have been
government railway officials. tho
executives of leading agricultural
and mercantile associations, and the
managers of the leading British
railways in the country. The latter
represent an investment of over ST.
lO0, zoo, 900 and include practically
all the Argentine mileage now in
private hands.
The purpose of these meetings has
been to solve the difficulty that has
arisen between the companies on
one hand and the government and
shippers on the other because of the
sharp increase in rates which was
put into effect by the companies on
March 8, 1921. The government has
declared these rates to be unauthor-
ized and illegal and has levied heavy
fines upon the companies. The ship
pers have alleged that the new
schedules will prevent their meet
ing the renewed competition OF
Australia, Russia and the United
States in the European meat and
cereal-markets. They declare, fur
thermore, that the new rates will
also embarrass native competition
with many imported lines right in
the home markets. For example,
the rice growers of the northern
provinces insist that they cannot
compete with BRAZILIAN rice in
Buenos Aires when the latter pays
freight of about $3.50 a ton.
whereas their shipments by rail
cost about s12.
The Governments Attitude.
According to the Times of Ar
gentina, the government is believed
to be convinced OF the justice of
the new rates. especially because of
marked increases in wages in Feb
ruary and September, 1920; but the
authorities have announced a stern
policy toward the companies. partly
to impress the populace and espe-
cially to secure the public presenta-
tion of evidence on both sides and
the formulation of an intelligent
public opinion on the subject. The
latter purpose seems to have been
accomplished. in part at least.
through the publication of detailed
statements of revenues and expendi-
lures by the leading companies.
The practice of denouncing these
concerns as "unscrupulous foreign
exploiters" had been considerably
stimulated by the marked prosper
ity of the companies during their
fiscal year ending June 80, 1920,
details of which have been publish
ed in commerce reports of May 4,
1921. 1t should be borne in mind,
however, that a good part of that
prosperity was due to two causes:
% The heavy movements of ce-
reals and pastoral products held
over from 191S-1919 because of a
lack of shipping; and CD the large
profits made by the companies in
the conversion of their Argentine
pesos into the then greatly depre-
ciated pound sterling. The latter
item netted the three largest COM
panies alone the tidy sum of f2,916,-
900 during the year 1890.
Losses in 1921.
The record for the first three
quarters of the present fiscal year,
July 1, 1920. to April 1, 1921, tells
very different story. or the five
leading companies, whose total mile
age is 13700, or nearly so per cent
of all the privately owned rail-
ways in Argentina, only one line,
the Central Argentine, shows a gain
in its 1921 figures as compared with
those of 1920; and in the case of
this line the improvement amounts
to only per cent and is due to
heavy shipments of holdover stocks
of maize, and not to what might
be called normal business.
The other four principal lines
show declines in aggregate revenues
for 1921 as against 1920. which vary
from to % per cent. interest
ing evidence on this problem is
found in the detailed reports sup
piled to a leading Buenos Aires
daily by the two largest railway
systems in Argentina, the Great
Southern and the Buenos Aires Pa
cific, whose joint mileage is nearly
equal to that of all other private
lines in the country put together.
In the case of the Great Southern,
wages and salaries amounted to g.
024,000 paper pesos in 1857, and
will show 1s,so0,00 pesos for the
current year 1s20-21, an increase
of SS per cent. The Pacific line
shows a similar growth and proves
that the ratio of its expenditure
to its revenues was sass per cent
for the six months of July -Decem-
Der. 1920, whereas the ratios dur
ing the previous decade G8Io-1e)
have never exceeded 7z per cent,
and the average for that decade
was 81 per cent.
Smaller Dividends This Year.
This item of excessive advances
In expenditures has greatly reduced
any advantage accruing from In
creased freight and passenger
traffic. While the year 1890 stood
out as one of exceptional prosperity
for the roads and enabled most Of
them to accumulate surpluses for
future dividends, the present year
has already seen two or three of
the larger companies drawing upon
these accumulated reserves for their
usual interim dividends, which are
not being earned. Present pros.
poets do not indicate any payments
beyond or per cent for the year;
IL anything, the rate earned will be
in most cases under those figures.
Evidence Of the opinion of the in
vesting public regarding this situa.