The Central Argentine Railway and the Economic Development of Argentina, 1854–1881

It has long been obvious that the diffusion of technical knowledge has been closely identified with the rapid economic growth characteristic of the nineteenth century. Perhaps less appreciated is that technical innovation in the nineteenth century generally occurred in response to economic demands. Indeed, technological change is usually integral to the everyday processes of production and consumption. “It expresses something not adventitious to a nation’s economic life but an inherent part of it.”¹

Transportation innovation was crucial to Argentine economic growth in the last quarter of the nineteenth century. Once constructed, railroads provided an unmatched stimulus to production, created a national market, helped to shape the export orientation of the economy, and promoted the economic and political integration of the nation.

It is the contention of this paper that the railroads not only contributed to Argentine economic growth but also were built in response to clearly discerned market patterns and economic opportunity. Transportation innovation, in short, was intimately linked to economic demand. The Central Argentine Railway, constructed between Rosario and Córdoba in the 1860s, provides an excellent example of this relationship. Analysis of the Central’s early years also provides a test of a variant but similar theme—the railroad created demand and was the prime mover in economic development. As Wilfrid Latham observed in 1866, “enterprise and industry, capital and civilization, peace and prosperity” will follow the trail blazed by the Central’s locomotives.² Once rails had linked Rosario and Córdoba, population began to move into the region, and the northern rim of the pampa experienced rapid economic development. This “sequence of zero population, railroads, and then economic development has become an implicit ideal type of construction ahead of demand.”³

During the tumultuous 1850s Justo José Urquiza, the president of the Argentine Confederation, recognized the need for national unity in the face of Buenos Aires’ declaration of independence. In 1854 he addressed the first Federal Legislative Congress on the importance and desirability of constructing railroads, developing a postal system, and improving existing roads. In his opinion the building of a rail line between Rosario, located on the Río Paraná some 250 miles upriver from Buenos Aires, and the important population center of Córdoba, the gateway city to the provinces of the north and northwest, was indispensable to the Confederation’s political and economic well-being.⁴ Rosario, opened to world commerce in 1854, was to be the Confederation’s outlet for the produce of the interior and, hopefully, would draw trade away from Buenos Aires.

But the proposed railroad, although studied in 1854, was not built for a decade. Political dislocation and internecine conflict frightened potential investors. Moreover, the Confederation lacked the treasury resources necessary to guarantee a rate of return that might tempt investors to risk their capital.⁵ After the accession of Bartolomé Mitre to the presidency of a newly reunited Argentina in 1862, plans for the Rosario to Córdoba railway were revived. Mitre urged action on the Central Argentine concession, a railroad he felt would give new economic life to the provinces of the interior and change the face of the republic.⁶

Economic development and the integration of a nation are processes much too complex to be explained solely in terms of railroads, however. It may more realistically be argued that lines such as the Central Argentine accelerated a process of development and transition that had its roots in the closing decades of the colonial epoch. To maintain that economic advance in Argentina took place only after the conclusion of the civil wars and the creation of a railroad-dominated infrastructure is myopic. As Clifton Kroeber has written, most of the important processes working for economic change, for example, European immigration, improved practices in stock raising, and the extension of the transportation system, began before the fall of Rosas.⁷ The 1850s and 1860s, not the 1870s or 1880s, were pivotal in the shift from traditional to more modern commercial and industrial activities.⁸

Throughout the nineteenth century, the Argentine economy was stimulated by the introduction of new exports with high growth rates that replaced or superceded in importance goods with poor or diminishing marketability. After 1810, sheep raising made modest gains, although it was not until the 1840s that the industry gathered momentum and wool exports offered an incentive that hides, jerked beef, and tallow could no longer provide. During the period of the Confederation, the dried fruit industry of Mendoza and San Juan took great strides forward with the opening of markets on the littoral and in Chile. From the 1820s Tucumán’s economy slowly diversified and several new industries such as saw mills, tanneries, tobacco growing, and cane alcohol production developed. Victor Martín de Moussy reported that the wine industry of Cuyo, long stagnant, had begun to show signs of new life after 1855.⁹

There were other indications of increased economic activity in the 1850s and 1860s. The demand for passenger transportation and regular delivery of mail in the eastern part of the country increased substantially. Accordingly, the servicio de mensajerías was improved and a national postal service was created in 1854. Fast coaches pulled by horses left Rosario on regular schedules placing the city in communication with the capitals of the interior provinces and with Buenos Aires. Timoteo Gordillo, in his capacity as National Inspector of Posts and National Roads, shortened the post road between Rosario and Córdoba from 113 to 80 leagues and added new relay stations. By 1857 a communication network criss-crossed the Confederation; a year later the postal organization was complete.¹⁰ It is important to note that this activity occurred from five to ten years before the Central Argentine laid its first rail.

Available Cordoban postal data for the years 1865–1870 shows that mail volume, a key indicator of national integration and growing cohesion, nearly doubled.¹¹ Fiscal data from the same province disclose greatly increased revenues generated by the alcabala, papel sellado, and marchamo (tax on each head of slaughtered cattle) between 1867 and 1870. (See Table I). Yet data for the 1860s must be used with caution. While the statistics may well reflect pre-rail economic growth they could likewise mirror increased economic activity as the Central Argentine approached Córdoba. Unfortunately, there is no way to separate the two.

With the quickening of the Argentine economy, merchants became concerned with promoting the movement of goods from the interior provinces to the littoral. Until the advent of the railroad that movement depended on caravans of carts and trains of mules that were tortuously slow and expensive. Early attempts to speed the shipment of produce and cut transportation costs centered on the expansion of steam shipping on Argentina’s few navigable rivers. These experiments proved of limited utility in tapping interior markets, however.¹²

The growth and modernization of the wool industry prompted producers, particularly those distant from the ports of Buenos Aires or Rosario, to explore the possibilities of more rapid, efficient, and less expensive transport. Sheepmen in the 1850s were experimenting with new techniques to improve the size and quality of flocks and their fleeces and meat. They introduced wire fencing, new breeds of sheep, baths to combat mange, machines to bale wool, and improvements in supplies of potable water. It is not surprising then that these same producers made strenuous efforts to expedite overland transportation and lower costs. By 1860 light wagons drawn by mules or horses were beginning to replace the cumbersome ox-carts in the carriage of wool from Buenos Aires ranches to market. A similar transition to the swifter wagons was noticeable on the highway between Córdoba and Rosario and reduced the journey from almost a month to a week or less.¹³

Overland transportation, even though slow and expensive, had not prevented significant economic growth. Rather, the carters in no small way contributed to Argentina’s eventual transformation into an export-oriented country long before the laying of the first steel rails. With the gradual integration of Argentina into a wider world economy, the carters were able to shift their emphasis from servicing local markets to participation in an emerging world trade pattern in which they carried Argentine produce to the ports and foreign merchandise from the ports to the interior. Cheaply produced foreign goods, despite high freight charges, were still able to undercut inefficiently produced and costly manufactures in the interior. The carts, not the railroads, provoked the disintegration of local artisan industries and helped to prepare Argentina for its role as exporter. If the process originated in the pre-railroad era, trains greatly accelerated the transition and transformation.¹⁴

Although the carts had contributed positively to Argentina’s economic development, by 1850 it became increasingly clear to Buenos Aires merchants that the maintenance of their profits from the export of produce demanded a more efficient and economical form of land transportation. Railroads offered an alternative. But foreign capital, needed to build the lines, was not attracted to Argentina in the 1850s. Political instability, the constant threat of hostilities between the Paraná government and Buenos Aires, Indian raids on the frontier, and investor ignorance of the Argentine Confederation all militated against raising capital on the London money market. British investors considered the construction of a railroad across the sparsely populated pampa as an exceptionally doubtful venture. Moreover, the foreigner looked upon Argentina as a country with a limited commercial sense and an agricultural structure that was stagnant if not actually retrograde.¹⁵

José Buschenthal, a Spanish banker and merchant in the service of the Confederation, was hopeful of attracting investor support in Europe for a railroad to run from Córdoba to some point on the Río Paraná. His trip to the Continent in search of capital in 1854 failed. Given the Confederation’s poor financial condition, all Buschenthal could offer potential investors was land in lieu of a guaranteed rate of return on capital. Brokers were not impressed.¹⁶

Even though European capital was uneasy about the prospects of Argentine stability or profitability, Vera Blinn Reber has established that British merchants, long resident in the Río de la Plata region, were willing to help finance railroads. Knowledgeable of the country and its economic prospects, these merchants considered investments made in the 1860s to be safe. By the 1870s they succeeded in attracting London companies with large reserves of capital to finance the building of a railroad infrastructure. The merchants realized that carting could not hope to keep pace with the new demands being placed upon it; railroads were the key to rapid economic growth.¹⁷

Illustrative both of Argentine economic development in the pre-rail era and the later attraction of railroad capital was the growth of Rosario in the 1850s. When Confederation officials first discussed the prospects for a railroad from Córdoba to the Paraná, Rosario was a minor port. Between 1854, when Rosario was opened to foreign trade, and 1863, the year the Central Argentine Railway drove its first spikes, the town blossomed.

An analysis of Rosario’s growth and the amount of commerce flowing through the city, together with population data, suggest that the Central Argentine, beyond the political implications of national integration, was also built in response to potential profit. Rosario, even before it was opened to foreign trade, was a terminal both for river traffic and the overland trade to Córdoba and Cuyo. As early as 1848 one traveller commented favorably on the “many evidences of trade and industry.” Indeed, he predicted a prosperous future for Rosario and postulated that “whenever the capital and enterprise of this country shall become directed to the construction of railroads, their first act will be to lay down a railway from this town to the Rio Cuarto, with branches to San Luis and Cordova [sic].” In 1852 the town was growing and L. Hugh DeBonelli reported that many houses, stores, and shops had been recently built or were still under construction. William Hadfield, who visited the region in 1854, was similarly struck by Rosario’s rapid expansion. The whole place, he wrote, put forth “an appearance of prosperous activity.”¹⁸

Captain Thomas J. Page, who sailed the Paraná between 1853 and 1855, was impressed with Rosario’s growth and observed the “healthy influence of trade upon the prosperity of the country.” He noted further that Rosario “bids fair to compete successfully for a portion of the foreign commerce, and certainly offers larger returns. . .. Its interior position can prevent no permanent obstacle to the direction of trade; and, aided by governmental influence, and with the certain prospect of connection by railway with Córdoba, Buenos Aires may well regard its future with watchful jealousy.”¹⁹

Rosario by 1862 had been transformed to the point where “any person who was then [1852] acquainted with it would not now recognize it as being the same except in its name.”²⁰ The increased economic activity was mirrored in other ways. Late in 1857 Rosario’s Club Mercantil was transformed into the city’s first Boisa de Comercio and, in January 1859, a new newspaper, El Comercio de Rosario, boasted of the port’s importance.²¹ Between 1854 and 1864 the city’s population more than tripled. (See Table II).

It has been estimated that opening Rosario to foreign trade in 1854 saved approximately fifty leagues on the journey from Córdoba to the coast and, more importantly, reduced transportation costs by about twenty percent. This significant lowering of the cost of overland carriage of goods was probably responsible for Rosario’s accelerated pace of development between 1854 and 1862. Even though the country was rent with political upheaval and violence, the cart and mule traffic through Rosario was surprisingly large. In 1864 British consul Thomas J. Hutchinson estimated that 14,000 to 16,000 tons of goods per annum passed through the city from the interior, “and about the same amount the other way.” Ricardo Ortiz notes that the carting traffic between Rosario and Córdoba in the 1850s was substantial, averaging 20,000 tons per annum and involving some 8,000 carts.²² The carting industry evidently kept pace with the demand but by 1860 it is likely that a plateau had been reached and that further expansion of the economy waited on the distinctly superior technology of the railroad.

Beyond the volume of goods, an analysis of the kinds of products exported from Rosario indicates that internal markets were in the process of being tied to the export economy in advance of the railroad. Tanned hides, dry ox and cow hides, horse hair, copper, and raisins could all bear the high carriage costs from the interior. Moreover, an increasing percentage of the wool exported from Rosario was from Córdoba. In 1856 Córdoba exported little more than 12,000 arrobas (an arroba equals approximately twenty-five pounds) of wool to the coast. This had trebled to 36,000 arrobas in 1863 and the British consul anticipated that Córdoba would ship to Rosario between 56,000 and 60,000 arrobas of wool for export in 1864, the year after construction began on the Central Argentine Railway. Interestingly, the consul also observed that wines from Mendoza and San Juan, increasingly competitive because of lower transportation costs and the rising prices of European imports, had begun to appear on the Rosario market.²³ Rosario, then, was a vital and growing urban center when the architects of the Central Argentine Railway discerned an opportunity to exploit a potentially profitable situation.

Allan Campbell, United States engineer, had been one of the first to sense the economic possibilities of the Rosario to Córdoba railway. In 1854, after calculating the line’s economic viability, he submitted a proposal to Confederation authorities. The route mapped by Campbell was not the most direct between Rosario and Córdoba but, from the standpoint of future profitability, it was well drawn. Campbell chose to follow the course of the Río Tercero to Villa Nueva (Villa María) where a station would be built. The site was strategic in that it was well watered and was an important stopping place for the caravans of carts and troops of mules. Villa Nueva was also valuable because it was perfectly situated for later extensions of the railroad toward Río Cuarto and Cuyo. With the exception of land in the vicinity of the cities of Rosario and Córdoba, the proposed line traversed territory yet to be developed. But Campbell knew that Córdoba received the produce of the northwest, and Villa Nueva the production of Cuyo. The railroad would win this trade from the carts and mules and carry the interior’s produce to Rosario. Campbell was confident that the envisaged railroad would halve the freight charges between the two cities. The resultant savings, in his opinion, would increase cargo traffic by a third and greatly stimulate passenger traffic.²⁴

In an effort to pinpoint traffic possibilities, Campbell, over a six-month period in 1854–1855, counted the number of carts and mules that entered Rosario and took notes on the variety of cargo they carried and the prices assessed. On the basis of this information he optimistically predicted a gross yield of £169,000 per annum and annual dividends of eight or nine percent.²⁵

Another decade passed before construction on the line was finally undertaken. In the interim the traffic potential grew. But was the level of economic activity sufficient to justify investment in a railroad? Contemporaries viewed the possibilities positively. Martín de Moussy was confident that the Rosario to Córdoba railway had an assured clientele and that the construction of the line responded to a very real and immediate need. In 1863 the British consul in Rosario enthusiastically reported that the tonnage of goods in and out of the city constituted “a splendid nucleus for the Centro-Argentine Railway.”²⁶

The 1864 prospectus of the company naturally tried to attract investors. Córdoba was characterized as a “central and populous city in the interior” and was well situated astride the highway of all the principal land traffic from the neighboring Pacific states of Chile, Bolivia, and Peru to the Atlantic. And Juan Bautista Alberdi, in his biography of William Wheelwright, the builder of the Central Argentine, wrote that creditors “must be the judges of the suitableness of the work for the accomplishment of which they lend their money. To provide means of transportation where there are neither trade nor elements of trade is labor lost.”²⁷

The company’s annual reports and statements of accounts constitute better evidence although the statistics for the period 1866–1872 are fragmentary and fraught with danger. (See Table III). While the line was under construction it was worked by the contractors who provided a minimum of information. Consequently, statistics on passenger and freight traffic as well as the respective revenues generated have been very roughly interpolated from data for the years 1873–1876. Net receipts for 1868–1872 were determined by calculating working expenses at fifty-two percent of the gross revenue reported for each year.

The trend, even if somewhat inexact, is revealing nonetheless. Most importantly, the railway was able to earn a profit on an incomplete line with modest passenger and freight traffic. Contemporary observers were impressed with the railroad and its potential profitability even before it was completed. The editor of the prestigious Herapath’s Railway Magazine remarked at the company’s 1869 ordinary meeting of shareholders that as the average cost of the line amounted to only £ 6,400 per mile “a very moderate traffic would pay a fair dividend.” William Hadfield visited Rosario in 1868 for the express purpose of riding on the Central Argentine Railway. He boarded “a good long train” made up of freight cars and two passenger coaches, both of which “were pretty well filled.” At Villa Nueva, the railroad’s terminus, Hadfield found “evident signs of a considerable traffic, even with an unfinished line.” The station yard was not large enough to contain the great number of carts loading and unloading. “In fact all was bustle and traffic under difficulties.” Shareholders were informed by the company that when the railroad “got to Córdoba . . . they would have an immense traffic.” It was stated further that traffic receipts on the complete line would render the company “at no distant date, altogether independent of the Government guarantee.” The prediction was overly optimistic as the Central did not free itself from the government guarantee until the 1880s. This does not suggest that the line was unprofitable. Argentine railways consistently paid modest dividends. As Colin Lewis has shown, “rarely in the nineteenth century were the British-owned companies able to declare the extra one or two percent which was expected by investors in foreign stock to compensate for the increased risk involved in sending capital abroad.” The railways, moreover, when compared to more lucrative investment sectors, gave a mediocre return.²⁸

Central Argentine trains only slowly displaced carts in long-distance hauls between Córdoba and Rosario. Indeed, as late as 1871, the year after the Central reached Córdoba, the company’s chairman expressed the hope that “the bullock carts would be driven from the road.”²⁹ The steady increase in freight traffic between 1866 and 1870 was not wholly at the expense of the carters, as construction traffic undoubtedly made up part of the total. The land through which the railroad passed also contributed traffic and indicates that the route chosen by engineers was not entirely an untamed wilderness. Population had long settled in some areas while in other regions there is evidence of anticipatory settlement in advance of the railroad.

The expansion of the wool industry in the 1840s and 1850s had already attracted rural population to southeastern Córdoba. Late in the 1850s and in the early 1860s, with the opening of the new post road between Córdoba and Rosario, Martín de Moussy reported that improved communications and the establishment of outposts had encouraged the organization of several new estancias along the route.³⁰ Near Fraile Muerto (Belle Ville) there were several considerable purchases of land in the early 1860s. Three individuals bought more than twenty-six square leagues of property in 1863; the land was adjacent to that ceded to the Central Argentine Railway as part of its concession. One of the buyers, Daniel S. Gowland, was a British merchant who had a long-standing interest in railway construction and had served as a vice president for the Ferrocarril Oeste, then under construction in the province of Buenos Aires.³¹ Richard Seymour, who bought an estancia south of Fraile Muerto in early 1865 was convinced that the undeveloped land surrounding his property would be acquired and peopled in a short while and that the government would protect settlers from Indian raids.³²

That more land was not purchased and settled in advance of the Central Argentine can be ascribed to the outbreak of war with Paraguay in 1865, renewed Indian raiding as the frontier was stripped of manpower for campaigns in the north, financial contraction, and a lack of local capital.³³ Where there was reasonable security against Indian attacks the land was rapidly developed, as is suggested by Hutchinson’s statistics for Cordoban wool production. Property for “many leagues” around Rosario had been settled and partially developed by 1862, leading F. Ignacio Rickard to comment: “It will be no easy matter to obtain land . . . for the projected railroad to Cordova once begun, it will naturally increase in value to such an extent, that the present owners will not sell land which must produce such a splendid income: the facility of transport for wool, hides, and other produce, making the present lucrative transactions in those commodities doubly so.” [emphasis mine]³⁴ Certainly, much of the land between Rosario and Córdoba was devoid of inhabitants. But people had begun to move into the area, first drawn by an expanding wool industry, second in response to the better communications and security offered by the new post road, and third in anticipation of the projected railway. The same pattern was repeated in other places once construction began. No sooner had the Central Argentine reached Villa Nueva than population began to spread southwest of the line, in the vicinity of Río Cuarto. Obviously settlers had been drawn to the new lands because of improved communications and the certainty that in the not too distant future the railroad would reach south from Villa Nueva.³⁵ Population not only followed railroad construction but also anticipated it.

Additionally, the bulk of the population between Rosario and Córdoba was probably settled on land in proximity to the old colonial highway and along the course of the Río Tercero, the same region through which the Central Argentine proposed to lay its tracks. In 1859, for example, Villa Nueva counted 1,100 inhabitants, or twenty-two percent of the department of Tercero Abajo’s population. Likewise, Fraile Muerto’s estimated population of 1,700 constituted more than fifty percent of Unión’s population.³⁶

Economic indicators, population data, and the impressionistic views of contemporaries all agree that the objective conditions for railway construction existed and that the level of activity was sufficiently attractive. But what were the motives of the investors themselves? What convinced people to risk their money in the Central Argentine Railway? Had they been impressed with Argentina’s steady economic growth in the 1850s? Had political peace made the difference? Had the Argentine government provided attractive incentives? Or were some attracted, in Eric Hobsbawm’s words, “less by rational calculations of profit and loss than by the romantic appeal of technological revolution, which the railway symbolized so marvelously, and which brought out the dreamer . . . in otherwise solid citizens”?³⁷ The reasons are legion.

With Buschenthal’s failure to interest European investors in a Córdoba to Rosario railroad, it fell upon a North American railroad builder, William Wheelwright, to try to attract capital. Wheelwright, in light of his other South American ventures, notably the Copiapó–Caldera Railway in Chile, was well known on the London money market. His extensive knowledge of railroading cannot have failed to impress listeners. Equally important, Wheelwright represented the government of a united Argentina in command of greater financial resources than those of the defunct Confederation. In addition to extensive land grants, Wheelwright was authorized to offer a guaranteed rate of return of seven percent on a capitalization calculated at the rate of £ 6,400 per mile over the Rosario to Córdoba route. Other inducements, such as tax immunities and the right to import railroad materials free of duty, were instrumental in drawing British capital.³⁸

The construction firm of Thomas Brassey was the largest English shareholder in the Central. Brassey had invested only after his partner completed a careful study of the proposed railroad. So satisfied was he with the line’s prospects that he announced that he had not sold nor did he intend to sell any of his shares. Another major shareholder, Henry Bruce, president of the London and River Plate Bank, had an intimate knowledge of Argentine economic prospects and confidently invested in the Central. In addition to the largest investors was a group of 411 people representing a good cross-section of Britain’s middle class. Counting on the seven percent return promised by the Argentine government, these people, widows, professionals, landowners, military men, members of parliament, invested between £ 4 and £ 10,000 apiece and subscribed to about half of the available shares.³⁹

The Argentine government bought heavily into the company, in part because it wanted an assured Argentine participation in the line’s working. Subscribing to 2,000 shares in 1864, the government purchased an additional 15,000 shares in 1868, thus making it the largest single stockholder. Overall government interest in the Central was as much political as economic. The railway would help to forge national unity. Trains would speed troops to spike the ambitions of local caudillos and secure the frontier against Indian raids. Even while the line was under construction the government came to appreciate its political and military importance in the face of war with neighboring Paraguay. Among private Argentine investors was ex-president Justo José Urquiza, one of the line’s original backers and a firm believer in its political and economic role.⁴⁰ In short, the motivations of investors, promoters, concessionaires, and politicians were not homogeneous. Many invested in the company for profit; others had different goals.

The arrival of the Central Argentine Railway in Córdoba in 1870 had important implications for the further economic development and integration of the nation. The national government used the occasion to demonstrate to the interior provinces that a new era of industry and commerce was at hand. It organized an exposition of Argentine and foreign products and timed the opening in Córdoba to coincide with the introduction of rail service along the whole route of the Central. The official bulletin published for the exposition praised the railroad effusively for its fantastic scientific and technological triumph over the savage and desolate pampa. Efficient and rapid transportation would liberate the interior’s commerce and bring prosperity.⁴¹

Beyond considerations of science, technology, and progress, lay Argentine political policy. For years politicians had recognized the need to alter definitively the colonial trading pattern that bound the interior provinces to Chilean, Peruvian, and Bolivian markets. That trade had to be redirected to the littoral. As Donna Guy phrased it, “isolated or Western markets tended to perpetuate local hostility to national authority.” Secession was always a possibility and national officials were most anxious to secure the better integration of the republic.⁴² Argentine officials hoped that the Central Argentine would eventually push its tracks to the Andes, as had been envisaged by Allan Campbell and William Wheelwright. Failing this, “it would leave the upper provinces in their former isolation, notwithstanding their nominal union with Chili.”⁴³

Much to the government’s satisfaction, the Central Argentine Railway, together with state-owned lines that radiated from Córdoba to the northwest and to Cuyo, definitively altered Argentine marketing patterns. As noted, in the pre-railroad era much of the interior had a westward orientation. For years Chile was able to capitalize on the high cost of transportation from Buenos Aires to Cuyo and Salta. European goods arrived in Chilean ports and were transshipped across the Andes by mule. The merchandise was cheaper and the supply more regular than was the case with similar goods coming from the Atlantic coast. With the Treaty of Free Trade and Navigation of 1853 and the opening of Rosario to the world’s shipping this pattern began to break down. The inauguration of rail service between Rosario and Córdoba together with the promise of government-constructed extensions to the far interior shattered the colonial trading pattern.⁴⁴

Despite the lively trade between Cuyo and Chile in the decade 1862–1872, “Mendoza was preparing herself to look anew to the east.” Euphoria gripped the province as the Rosario to Córdoba railroad neared completion.⁴⁵ The impact on trade was marked. Cheaper transportation rates from Córdoba to the coast had a two-fold effect; they tied the interior to the littoral and stimulated economic development in advance of the spreading railway network. With respect to the shift in trade, a British diplomat reported in 1881, four years before the state-built Ferrocarril Andino crossed into Cuyo, that the trade of that region with Chile had diminished almost to the vanishing point. Upon the completion of the Andino, which originated in Villa María, he expected trans-Andes trade to cease, for “it will then be much cheaper for the provinces to draw the goods they require from Buenos Aires than over the Andine passes.”⁴⁶ The completion of the Central Argentine Railway, then, together with the government’s construction of extensions, hastened a process of integration into world markets initiated by the carts and mule trains.

There is no question that the interior’s economy was stimulated by the anticipation of rail service. Martín de Moussy noted as early as 1860 that two things hurt the wine industry of Cuyo: the lack of transport and a poor general knowledge of the quality of Andean wines. The creation of the Rosario to Córdoba railroad shortened considerably the distance wine had to travel on mule back, lowered costs, and also allowed for wider sampling of Cuyo wines and spirits. The net effect was to prod the wine industry to increase production and improve quality.⁴⁷ After 1870 Cuyo introduced new varieties of vines and began to perfect techniques that would ultimately produce wines far superior to those consumed by Martín de Moussy.⁴⁸ Significant increases in the production and exportation of wines began in 1881. In that year numerous new plantations were started and wine production rose by fifty percent. It remained for the railroads to complete a set of conditions which would establish Cuyo as the vineyard of Argentina.⁴⁹ Similarly, tucumanos, in anticipation of the railroad, expanded their production of sugar cane. With the railroad would come modern sugar mill equipment at acceptable prices. Before the completion of the Central Argentine Railway and government Unes to the northwest, it had cost more to transport the heavy machinery from Rosario to Tucumán than it had cost from London to Rosario. It was hoped that a modernized sugar industry with access to cheap transportation would be able to compete successfully with imports of Brazilian and Cuban sugar.⁵⁰

In sum, the Central Argentine Railway contributed significantly to the expansion of already existing economies in ninteenth-century Argentina. Built behind demand, the railroad was able to capitalize on the profitable trade carried on by carts and mules between the interior and Rosario. Opening the port to foreign ships allowed the slower methods of carriage to initiate the integration of the economy of the interior with that of the littoral and, ultimately, the world. The Central Argentine Railway greatly accelerated this process. Yet the Central did not become one of South America’s premier railroads on the strength or potential of the Córdoba to Rosario trade alone. Rather, it became a great railway once it was able to draw ever-increasing amounts of traffic from the northwest and Cuyo. Revenues increased dramatically from the produce of its own lands as well, lands which it had peopled in accordance with its concession law. The sheep and cattle economy in the Central’s zone of influence had expanded significantly without rail service, although both industries profited when the railroad pushed through the region in the 1860s. Cereal crops, on the other hand, spread to southern Santa Fé and southeastern Córdoba behind the railroad. In the late 1860s these lands had not produced enough wheat to meet local consumption requirements, but by 1876 the same zone produced a surplus of more than a million bushels.⁵¹ Rapid, efficient, and cheap transportation had made this possible. Industries in the north and northwest, especially wine and sugar, only slowly expanding from the 1850s, developed rapidly with the promise of transportation innovation. In one sense, then, the railroad had been built in response to an existing demand; in another sense the demand was anticipated. But in no sense had the Central Argentine been a singular, unique force in Argentine economic development and integration. Technological advance followed economic demand. The railroad built on and expanded an economic pattern which had its roots in the pre-rail era.

Author notes