In the last several decades the state has played a highly visible and controversial entrepreneurial role in the Argentine economy. Leaving aside some significant contributions to the debate, we know very little about the structure, operations, and finances of important state corporations, such as the Corporación de Transportes de la Ciudad de Buenos Aires, a body that gradually coordinated and monopolized urban passenger transportation in the city.1

Why did these state undertakings emerge? Who managed them? How were they actually run? What problems did they experience? Which social and economic groups supported them, and why? To what extent did the aims of these ventures clash or coincide with the vested interests of the private sector? This essay considers these issues through the first historical analysis of the rise and fall of one of the most controversial state companies in Argentine history, the Buenos Aires Transport Corporation.

Many observers have long insisted that the corporation was created in response to British diplomatic pressure to benefit a floundering British company, the Anglo Argentine Tramways Company Ltd. of Buenos Aires, which had lost the monopoly of local passenger traffic; and to save traditional exports to the United Kingdom in times of duress. British diplomacy and the corporation are also said to have saved the Anglo Argentine from bankruptcy at the expense of national interests and the needs of local commuters.2 This study is not primarily intended to address those assertions. Its conclusions inevitably impinge on them, however, and suggest that at best such claims are rather simplistic.

Two clarifications are in order about the sources used for this study and the reason the transport corporation is considered a state enterprise. Although this body emerged as a mixed venture, for reasons that will be discussed, the Municipality of Buenos Aires and the national government had strong decision-making and supervisory influences that overshadowed the role of the private sector. Furthermore, in 1943 the national government gained control of the corporation’s board.

As for the sources, it must be noted that the demise of Argentina’s state firms has often been accompanied by the destruction of records. Yet the available sources have enhanced our effort to address the issues raised above and to trace the history of a significant case study of state intervention in the national economy since the 1930s. As state undertakings in Argentina now come under heavy criticism and face dismantlement, this essay also hopes to contribute some of the balanced historical perspective on their successes or failures that is still lacking.3

The Origins of the Buenos Aires Transport Corporation

By the end of World War I, four private tramway companies handled 86 percent of all passenger traffic in Buenos Aires. These were the Anglo Argentine Tramways Company Ltd., the Southern Electric Tramways Company, the Buenos Ayres Town and Docks Tramways Company, and the Lacroze Tramways Company Ltd.4 With the emergence and consolidation of unregulated colectivo and bus competition and the demand for cheaper and faster transportation, by 1930 the tramway companies’ traffic had slumped to 49.5 percent of the total.5

Since they were unable to stop this trend, in February 1931 the tramway companies began to demand from the municipal authorities an urban transport coordination policy to eliminate “unchecked and ruinous” competition and preserve for themselves an “adequate” share of urban passenger traffic. Pressed by the need for more revenue to meet rising operating costs and service various fixed obligations, the four companies also asked for an increase in regulated rates, which had remained unchanged since the turn of the century. Yet both problems remained in abeyance until a new Conservative administration, led by Agustín P. Justo, assumed office in February 1932.6

Because of the balance of power in local politics, however, in 1932 the tramway companies’ demands again went unfulfilled. President Justo and the Lord Mayor, who was regularly appointed by the national executive, endorsed the tramways’ concerns. But a strong opposition led by the Socialists who controlled the elected concejo deliberante (deliberative council), the local legislative branch that granted and supervised concessions of public utility services, opposed both measures.7 Thus the Lord Mayor appointed an ad hoc committee to study urban passenger transportation problems in Buenos Aires and propose solutions. In so doing he asserted the need to broach these issues without partisan biases and the need for “a collective organization” of passenger transportation.8

In March 1934 this committee released a report that emphasized the stiff transport competition and serious traffic problems of the downtown area, noting that many neighborhoods had scarce transport services and that meanwhile the city council was plagued by political factionalism. The report concluded that Buenos Aires needed a transport coordination policy sanctioned by Congress, and included a proposed bill creating the Buenos Aires Transport Corporation for that purpose. The report and the bill met the Lord Mayor’s expectations. He promptly submitted them to the executive branch, which endorsed them and sent them to Congress for approval.9

To block this pro-transport coordination maneuver, the opposition launched an intensive campaign in the city council, in Congress, and through impressive grassroots mobilization all over Buenos Aires. When this failed, the Socialists fought their decisive battle in Congress, which was controlled by the ruling Concordancia.10 Nevertheless, on September 26, 1935, the Chamber of Deputies passed the Buenos Aires Transport Coordination Act.11

The Justo government wanted to corroborate its support of the beleaguered tramway companies through swift Senate approval of the transport coordination bill. Yet the incipient law would curb the future expansion of the popular colectivos in Buenos Aires and raise new controversies. Thus, after late 1935 the Justo administration no longer pursued the issue, and the bill’s final passage was delayed another year.

On September 29, 1936, the bill came up for debate and final vote in the Senate. At a stormy session the opposition stressed its moral outrage and scorn against the bill; but the Senate passed Law 12,311, creating the Buenos Aires Transport Corporation. After almost five years of controversy, the government finally had the legal basis to launch a new urban passenger transport policy in Buenos Aires.12

The Beginnings of Transport Coordination in Buenos Aires

The Buenos Aires Transport Corporation was to be a joint concern formed by the national government; the Municipality of Buenos Aires; and private tramway, subway, bus, and colectivo companies that would coordinate and monopolize passenger transportation in the city for 56 years. At the end of its concession, it would hand over its assets free of charge to the state. The major national railways, which provided some urban and suburban services that were already regulated by national legislation, were excluded from the corporation.13 Local private companies might continue operating independently, but only if their services and fares did not compete with the corporation’s and could be expropriated on grounds of “public utility.”14

The national government’s and the municipality’s share capital in the corporation would come from the capitalization of “taxes and levies currently paid by the companies” and those “owed by the companies when the corporation was formally constituted.”15 The assessment of the private companies’ share capital would be based on their circulating capital and fixed assets.16 Then, according to the wording of the law, to join the corporation the companies would exchange their assets for full exemption from municipal and national taxes, and for shares carrying a guaranteed annual dividend according to this valuation. Afterward the companies would retain their individuality, subject to a control that merits detailed examination.

The corporation was to be organized, financed, and managed by the national government, the municipality, and the private companies. Management would be in the hands of a board representing all parties according to their contribution to the corporation’s share capital. This board would be under the supervision of a control commission presided over by a chairman appointed by the president of the republic.

To launch the corporation, a special commission drew up its statutes; established the control commission’s technical, financial, and administrative supervisory role; oversaw the elections of private sector board members; and temporarily fixed its share capital (table 1). The tramways and three bus companies that were first to join the corporation had a clear majority on the board. But because of various bureaucratic delays, the entity did not begin operations until February 1939.17

By then, many local residents viewed the corporation as the creation of corrupt politicians to save bankrupt and inefficient tramway companies at the expense of the colectivos. Residents also believed the corporation would never solve local traffic and passenger transportation problems. To change this attitude and to build a sense of belonging among its workers and white-collar employees, in June 1939 the board began publishing a monthly journal with company news and comments, titled Corporación.

Other problems beset the corporation in its early years. Substantial rolling stock repairs, administrative changes, and maintenance work were needed. Services called for immediate improvement; part of the network had to be rerouted to eliminate overlap and meet new commuters’ demands. Workers and employees wanted higher wages and salaries. The colectivo owners, for their part, knew the success of the corporation largely depended on the merger of their companies into the corporation, so to give them up they demanded cash compensation at unaffordable levels.18

Finally, the corporation’s capital structure was flawed. For one thing, as of early 1939, the tramway companies owed compulsory corporate contributions to a retirement and pension fund for the workers. Instead of deducting this debt from the companies’ share capital, however, the special commission capitalized it as a separate item in the capital structure (see table 1). Moreover, the corporation began to operate without sufficient working capital both to finance its operations and to make those corporate contributions.19 Local credit to modernize the corporation was also unavailable, so the board tried to arrange a loan with European bankers. But British government restrictions on the flotation of foreign loans in London and the unstable prospects of international finance on the eve of the World War II thwarted the effort.20

In addition to this hard blow, several issues that hitherto have not been adequately analyzed also undercut the board’s plans. The control commission emerged as a powerful government body appointed by the executive branch, with sweeping supervisory powers over corporation fares, financing, labor conditions, administration, wages, and services.21 This meant that from the corporation’s inception, the membership and functions of the control commission gave the state a strong regulatory role that curtailed the board’s managerial prerogatives. Coupled with that, the way the special commission implemented several key clauses of Law 12,311 was unfavorable to the private concerns that joined the corporation. Above all, the corporation’s flimsy capital structure allowed the national government to increase its share and that of the municipality to the detriment of the private companies.22 In so doing, officials could simply claim to defend the “public interest” and proceed to reduce the private companies’ stock and decision-making influence with one stroke of the pen.

The appointment of key officials to the corporation board and the control commission also implied that the private companies would not control this body at the expense of the state and the local commuters. To safeguard the “public interest,” the president of the republic and the Municipality of Buenos Aires appointed the chairman and one vice president of the corporation. Justiniano Allende Posse, a prestigious and influential politician who had promoted motor transportation and road building to modernize Argentina’s transport infrastructure—to the detriment of the railways— became chairman of the powerful control commission.23 Yet the profitability and sound financial management of the transport corporation were not assured. According to Law 12,311, “just and reasonable” fares should cover working expenses, adequate repairs, maintenance, and the guaranteed return on the invested capital; but this provision was ignored. Meanwhile, at the request of the national government, in early 1939 the corporation board had to grant salary and wage increases to all personnel without a concomitant rate increase to finance them.24

In sum, as of early 1939, implementation of the Urban Transport Coordination Act involved different parties with divergent views on how local traffic and public transportation problems should be solved. Clearly, the corporation board wanted to make the entity an efficient undertaking. Yet its efforts were soon undercut by three opponents who determinedly ignored the reality that this task demanded an immediate increase in passenger fares. One was the national executive, who also controlled key board posts and gradually grew detached from the fate of the private tramway companies. Another was the special commission that interpreted the law and implemented some of its vital clauses; and the third was the control commission, which believed that the state had to supervise and regulate corporation affairs to prevent the private companies from gaining undue influence. Thus, launching the transport corporation per se did not guarantee that the private tramway companies that had advocated its creation would streamline their finances or retain an “adequate” share of passenger traffic in the city.

In addition, because of the situation of those member companies and the failings of the law itself, the corporation faced technical and financial constraints that worsened with the outbreak of World War II. The strategies the board had to adopt to meet them accordingly became more complex. Though undoubtedly neither the private companies nor the government could foresee it, in September 1939 a fascinating and conflict-ridden era in the history of the Buenos Aires Transport Corporation began.

The Vortex of the Early War Years

During the early years of the war, the board merged some bus companies into the corporation. Several spacious parking lots and workshops were constructed. Part of the corporation’s fleet was modernized, and some combination tramway-subway services were inaugurated. The board also intensified its efforts to build good relations with both commuters and its own employees. In sum, the board continued trying to make the corporation efficient and financially rewarding.25

For various reasons, however, such dynamism still achieved only limited success. In January 1940 the Argentine government arbitrarily reduced the share capital of the private tramway and subway companies. This step destroyed the prospect of a trustful working relationship between government and private sector board members. It also undercut managerial effectiveness and later generated protracted lawsuits against the state and the corporation by some of those private companies.

The action had been recommended by the control commission, which claimed the move would correct previous accounting errors. Moreover, the commission asserted, the previous estimate of the companies’ share capital had not considered the usage depreciation of companies’ fixed assets in the year between their valuation and their conveyance to the corporation. Unidentified local sources, however, suspected that since corporation dividends would be prorated according to recognized share capital, the government wanted with this reduction to save on these payments to the private companies.26

The merger into the corporation of a Spanish subway company, the Compañía Hispano Argentina de Obras Públicas y Finanzas (CHADOPYF), was also quite problematic. Its board rejected the merger terms of Law 12,311 because those terms ignored the annual service of debentures, which were floated partially to finance the construction of its subway network. The board also refused to hand over company assets until the special commission’s valuation was revised. When this was done, after protracted negotiations with the corporation, a settlement was reached whereby the Argentine government would cancel company debts with suppliers as well as an outstanding loan with the state-owned Banco de la Nación Argentina, and would guarantee the annual service of the debentures. This agreement finally persuaded the CHADOPYF to join the transport corporation in May 1943.27

If these problems hampered the corporation board, so did the difficulties of buying tires, engines, rolling stock, chassis, and spare parts overseas. Until early 1942, wartime needs and the Allies’ strict policies against diverting exported strategic goods to the Axis took precedence over equipment purchases. Later that year, a U.S. economic boycott in response to Argentina’s neutrality in the war further crippled the corporation’s services.28 Another continuing problem was that of merging the colectivo companies. In early 1942 the board obtained a loan to purchase bus and colectivo companies and improve corporation services and finances. This project was destined to provoke serious conflicts.

Three underwriters subscribed the loan. One was the Compañía Argentina de Electricidad (CADE), a major company in Buenos Aires that belonged to Sofina.29 Another, the Compañía Industrial y Mercantil Argentina (CIMA), belonged to the Bemberg consortium, which was associated with French capitalists and had long been the government’s financial agent in Europe.30 The third was Bracht S.A., a similar Belgian-Argentine consortium linked to strong German capitalists. These financiers lent 40 million paper pesos in cash to the corporation. In exchange they received government-guaranteed corporation debentures carrying an annual dividend and redeemable at par value after March 1944. In addition, the loan agreement committed the corporation board to make the entity profitable and preserved the interests of the corporation creditors and the state.

Until this loan was repaid, the board could not issue other corporation obligations and had to give top priority to the annual service of the debentures over other previously fixed obligations. The board also was required to reduce the guaranteed annual dividend on share capital for eight years, overhaul the corporation’s administration and services, and impose realistic fares to meet all fixed charges, operating expenses, and dividends.

A trustee for the debenture holders was appointed, with the authority to review the corporation’s books; attend board meetings, albeit without voting rights; and, should the corporation default on the debentures, eventually administer the corporation without restraints. Another clause in the loan agreement stated that if by November 1943 the corporation was not in sound operating condition or the new fares did not yield enough revenues to meet their required payments, the government was to repurchase the debentures at par value.

The national government, in turn, was to guarantee the annual service of the debentures and the eventual profitabilty of the corporation. It agreed to this clause, however, only after the board agreed to carry out its mandated technical and administrative reforms, and only after clauses safeguarding the “public interest” were included in the loan agreement.31

With this loan the board acquired most of the colectivo companies operating outside the corporation, but not the bus companies, as originally intended.32 Because of the wartime parts shortage, however, many of the vehicles were so dilapidated that they needed substantial and unaffordable repairs. Thus the corporation’s automotive services remained poor.33

Furthermore, until early 1943 key government officials and cabinet members opposed the board’s efforts to raise fares and overhaul administration and services as the loan contract required. In particular, these officials included control commission chairman Justiniano Allende Posse, transport corporation chairman Rodolfo Coraminas Segura, Foreign Minister Enrique Ruiz Guiñazú, and Public Works Minister Salvador Oría. Their stance reflected three closely related elements in the ideology of many Conservatives in the ruling Concordancia. They harbored fervent nationalist resentment against the activities of foreign companies in the domestic economy. They also had an exaggerated suspicion that the corporation board’s advocacy of sound management was due to the influence of private sector members, who were trying to manipulate managerial decisions to shore up the vested interests of their companies at the expense of the state and the local taxpayers. Finally, they believed that only a highly interventionist state with strong regulatory powers could neutralize these intentions and defend national sovereignty against “irritating monopolies” and foreign trusts.34

By the end of 1943, after almost five years in operation, the corporation was handling 92.8 percent of total passenger traffic in Buenos Aires (see table 2). Under these circumstances, however, it was neither efficient nor profitable. Excluding the modern and well-maintained subways, its dilapidated rolling stock precluded the provision of efficient service. Its shares never yielded dividends, and its gross receipts always failed to cover operating costs, such that between December 1939 and December 1943 the entity’s accumulated deficit rose from 8.6 to 56.7 million paper pesos (table 2).35

How were these annual deficits financed? In the first place, the corporation did not make its contributions to the workers’ pension fund. It did not pay its electricity bills, either. Judging from what became a standard practice later, it seems that by late 1943 annual appropriations in the national budget and liberal credits from the Banco de la Nación Argentina already covered these imbalances. But that policy was followed only to secure minimal public transportation at a subsidized cost for local commuters.

From the point of view of state enterprise efficiency, the transport corporation was in virtual collapse. The situation demanded radical measures to improve operating conditions and to provide adequate services charging realistic rates. But as a coup toppled the Concordancia in June 1943, this dilemma was still unresolved. Moreover, the coup inaugurated a military government under which the transport corporation was engulfed by greater technical and financial difficulties and a tide of unleashed economic nationalism.

The Onslaught of Unbounded Nationalism

Virtually from the inauguration of the military government, two interrelated problems of greater intensity than before hobbled the transport corporation. The first was the continued deterioration of key sectors of the national economy because of the war. The second was the corporation’s lack of prestige and loss of popular respect, along with a nationalistic turn in local politics. These influences undercut the board’s ongoing improvement measures and prevented a badly needed rate increase—never a popular option among local commuters.

While the war’s overall disruption of Argentina’s foreign trade and financial relations continued, the government’s foreign policy and ideology provoked the U.S. government to tighten the economic boycott imposed in 1942. The national economy accordingly experienced greater shortages of fuels, capital goods, and raw materials; the government enforced energy and fuel rationing; and inevitably the corporation continued to suffer from a lack of tires, spare parts, engines, and rolling stock that almost paralyzed it until the end of the war.36

The military regime repudiated Argentina’s liberal tradition and the Concordancia’s record, and launched an intensive campaign against alleged corruption in the civil service. It also adopted particularly nationalist policies toward two major foreign-owned electric power companies, CADE and the American and Foreign Power Company, a U.S. company popularly known as ANSEC, and began to investigate their concessions. The Bembergs’ businesses were also investigated on suspicion of income tax evasion and illegal windfall profits. These inquests disclosed a compromising involvement of CADE, ANSEC, and the Bembergs in local finance and politics; they further discredited the Concordancia’s transportation policies in Buenos Aires and augured stern measures toward the corporation.

On June 23, 1943, military officers and new civilian appointees replaced the control commission officials and the government’s corporation directors. Lieutenant Colonel Mariano Abarca became the new chairman of the control commission, and Santiago del Castillo chairman of the corporation. The national government’s new representative on the corporation board was engineer Teodoro Sánchez de Bustamante. Abarca was a military engineer whose career and intellectual background exemplified the growth of nationalist and industrialist ideas in the army since World War I. He was an exponent of the radical protectionism and nationalism that later characterized the military regime. Del Castillo was a prestigious leader of the statist and nationalist Sabbatinista faction of one of the most popular parties, the Unión Cívica Radical. Sánchez de Bustamante was a professor at the University of Buenos Aires who advocated, for national security reasons, the nationalization of all foreign public utility services in Argentina.37

The military government ordered the control commission to report to the national executive on the corporation’s compliance with the Urban Transport Coordination Act, alternative solutions for problematic cases of pending compliance, and measures to make the corporation efficient. Later the commission was to submit another report on past assessments of the constituent companies’ assets and the possibility of adjusting the government’s stock ownership.38

The new control commission’s first survey accurately pointed out serious legal and administrative irregularities, as well as the dilapidated technical and financial condition of the corporation. It concluded that the corporation could not meet local passenger transportation needs, let alone improve its services in the near future, and had not even complied with Law 12,311.39

In its second survey the control commission objected to the corporation’s capitalization process, as well as the stock ownership and board membership of the Municipality of Buenos Aires and the national government. As a result of the first assessment, the military government argued that the guaranteed debentures of the 1942 loan had increased the national government’s share capital in the corporation. Therefore, on August 16, 1943, the government dictated Decree 5,867, appointing a new director to represent this capital inflow on the board. The second survey concluded that local commuters were at the mercy of selfish private interests. Accordingly, the government dictated Decree 5,868, unilaterally revising the municipality’s and several companies’ share capital.

This decree fixed for the municipality a higher amount in paid-up shares in the transport corporation. It also declared that all tramway and subway companies except the Central Railway Terminal of Buenos Aires owed local taxes, which were immediately deducted from their paid-up stock and added to the municipality’s new share capital. Thus, the enforcement of Decree 5,868 further reduced these companies’ share capital. As the British ambassador pointed out, by means of both decrees the government achieved “a working majority in the board.”40

The CHADOPYF also suffered under the nationalist drive of the military regime. On July 3, 1943, a government decree abrogated its merger settlement with the corporation and ordered a control commission investigation. Then the CHADOPYF’s books were impounded. In August an army general became judicial administrator of the company, and government officials replaced its directors on the corporation board. Finally, all company assets were confiscated, and its shareholders lost all their capital.

Until February 1944 the corporation met the annual dividend of the debentures floated for the loan of 1942. Breaking the stipulations of the loan agreement, however, it had not been reorganized and its fares did not cover all operating costs and annual dividends. Furthermore, as of early February the corporation was unable to begin redeeming the debentures.

The 1942 deal had offered two alternatives to meet a possible default on these obligations. If the underwriters wanted to keep their investment, their trustee could administer the corporation until their capital was repaid. Otherwise, if the corporation faced insolvency, the government was to repurchase the debentures at par value. The corporation was indeed insolvent, its management problems were irremediable, and, with the government’s nationalist policies, the entity was now a risky venture for the debenture holders. The government did not want the underwriters to gain control of the corporation because the previous political and business connections with the state of two of them, CADE and the Bembergs, were under investigation. Therefore, in accordance with the deal, the government purchased the debentures and, in June 1944, promoted its nationalist board delegate, Teodoro Sánchez de Bustamante, to administrator. Thus the corporation’s definitive share capital was settled, and the state took control of it for good (see table 3).41

Under state management the corporation still did not improve its precarious situation. Revenues had never covered operating costs, yet the authorities refused to sanction a rate increase. With the ascendancy of the populist Colonel Juan Perón, the corporation adopted labor and social welfare policies that met workers’ longstanding demands but sharply cut into their productivity and increased the company’s work expenses.42 Yet the government reiterated its refusal to raise fares, adding that most commuters could not afford it.43

Meanwhile, the corporation continued to carry most of the passenger traffic in Buenos Aires, even though all rolling stock but subway coaches remained in very poor operating condition. What’s more, between December 1943 and December 1946 the accumulated deficit climbed from 56.7 million to 110.1 million paper pesos (see table 4). These losses comprised two main items: unpaid bills and outstanding corporate contributions to the workers’ pension fund, accumulated since 1939; and liberal national government loans to purchase some capital goods and, mainly, to finance social welfare policy in the corporation.44

These conditions put at least one of the private shareholding companies, the Anglo Argentine, into a highly unfavorable position. The maelstrom of rabid nationalism had brought disfavor and political ostracism to the traditional Argentine political establishment, which historically had welcomed foreign investments in the country. In addition, the corporation’s casual deficit spending and poor management left the Anglo Argentine no room to protect its stake in the corporation, either through political bargaining or British diplomatic support.45 Consequently, in February 1946 the Anglo Argentine’s board filed suit against the Argentine government, demanding the abrogation of the decrees that had given the state control of the corporation, compensation for the company’s loss of profits, and payment of its legal fees. As this legal battle began, the world war ended, and Argentina stood at a turning point: the beginning of a new world economic order and, via “clean” general elections, the creation of a new constitutional government. The private companies and the corporation would have to adapt to the rise of the Peronists and a new political scenario. Indeed, more major upheavals were in the offing for all of them.

Peronist Populism and State Ownership

During its early years the Peronist government tried, to some extent, to put the corporation on a profit-making course. Three trustees appointed by the national executive took over administration in lieu of the board. In 1947 and 1948, trolley buses and omnibuses were purchased, and the corporation inaugurated the first trolley bus lines in town. To persuade the workers and employees to accept the elimination of redundant personnel, as well as to improve administration and services, in November 1949 the government appointed the vice president of the union as one of the three trustees. Meanwhile, rates were raised modestly.46

Nevertheless, the corporation failed to become profitable. Despite the enlistment of the union vice president, between 1945 and 1955 the number of workers and white-collar employees in the corporation rose from 30,508 to 45,532.47 Saddled by the pervading influence of populist ideas, political compromises, and strong internal disagreements about economic policy, the government did not retreat from its deficit-spending policies until 1952. So as not to alienate a constituency used to low fares, the timid increases also continued until 1952. Continuous fringe benefits and pay increases that would meet the legitimate demands of a loyal Peronist union without demanding more worker productivity constituted the ultimate factor undercutting the trustees’ modest efforts.48

In July 1948 the government candidly acknowledged its inability to pull the transport corporation out of the quagmire. It submitted the issue to the national congress, arguing that a congressional law had created the corporation to solve public transportation problems and its operating results had fallen short of all expectations.49

The Senate immediately appointed a special committee to study the case. By late September this committee produced a report emphasizing that the corporation was bankrupt and could not fulfill its original aims. At the same time, however, the report failed to account for the corporation’s financial collapse, outdated fares, and unwarranted increase in personnel. It also ignored the fact that the private companies still owed dividends and annual service of other prime obligations to their shareholders and creditors. The study concluded that to protect “the public interest” the corporation must be liquidated, and it included a draft resolution to do so. Because the government had full control of a Senate imbued with sympathy for its statist and nationalist policies, on September 22, 1948, this body unanimously passed both report and draft without debate.50

A week later the bill came up for final debate and vote in the Chamber of Deputies, where the government had a strong majority. The Peronist deputies declared that the Urban Transport Coordination Act manifested past “imperialist control in a semicolonial country” and that moral, legal, and financial imperatives called for the recovery of an “indispensable public utility service.” On September 30, 1948, the chamber turned the bill into Law 13,501. The new law ordered the liquidation of the corporation, dictated that the executive branch could eventually purchase it, and affirmed that the liquidation would not entail layoffs, suspension of benefits, or reductions in salaries or wages. Following the Senate’s criteria, it also ignored the private companies’ debts, as well as their right to a compensatory payment for their assets.51

The government was eager for a quick liquidation of the transport corporation. First, however, it was compelled to deal with two problems: an economic crisis that unfolded in 1949 and forced a gradual change in economic policy; and a constitutional reform whereby, that same year, Argentina’s liberal charter was replaced by a new one in which the statism, nationalism, and corporatism bore a clear Peronist imprint. This reform was not without consequences for the corporation. Article 40 of the new constitution gave the state the undisputed ownership of all public utility services, including joint or private enterprises, either through expropriation or purchase—at a minimal price.

In April 1951 the government put up all the corporation’s assets in one lot for public auction. The only bidder was the Ministry of Transport, which offered 410 million paper pesos. This payment barely covered the entity’s losses for 1951, and once again ignored the private companies’ debts to their creditors and shareholders (see table 5). In September a new law ratified the auction, and on January 1, 1952, the corporation became a new, state-owned public transportation entity, Transportes de Buenos Aires S.A., or the Buenos Aires Transport Authority. Its so-called liquidation was therefore, in effect, a nationalization, because the entity continued to exist under state ownership and management.

Meanwhile, as part of a more realistic policy shaped in response to the economic crisis, fares finally received a major revision. In March 1952 all Transport Authority passenger fares were raised by 100 percent.52 In July 1955 most colectivo services were returned to private hands. This decision was based on three factors. The government no longer wanted dilapidated vehicles that would never meet the growing need for faster automotive transportation. It needed entrepreneurs’ help to improve local public transportation. It also had to reduce the number of public employees as a step toward balancing the national budget, and the Transport Authority’s plight offered an opportunity to do so in an unpopular and highly inefficient state corporation without abandoning nationalist and statist ideals.53

Unfortunately, these belated policy changes had a negligible impact on the condition of the rolling stock and the business performance of Transportes de Buenos Aires S.A.54 The company’s share of passenger traffic in Buenos Aires slumped to 78.3 percent. Although as of December 1946 the Transport Authority had accumulated losses of 110.1 million paper pesos, in 1955 alone it had a deficit of 536.5 million (table 5). Unpaid bills and corporate contributions to retirement and pension plans accumulated. Working expenditures were met only with ever-larger appropriations from the national budget (which, for the most part, were not made public until the early 1960s, when another administration was in power).55

During these years the Anglo Argentine Tramways Co. underwent a long ordeal, compelled to face changing urban transportation policies in Buenos Aires without help from British diplomats. Its directors therefore reactivated the lawsuit they had filed against the state in 1946. Meanwhile, since mid-1954 the Perón government had been gradually falling apart, and in September 1955 it was ousted by a coup. As it was succeeded by administrations that managed government expenditures more cautiously and were more sympathetic to foreign capital, the Anglo Argentine no longer suffered from the whirlwind of nationalist politics. But the final chapter in the history of the renamed Buenos Aires Transport Corporation was just beginning.

Twilight and Final Liquidation

The provisional government that took office after the Peronistas’ overthrow inherited many complex problems that called for rapid solutions. The economy required a sustained reconstruction program. To achieve this recovery and, furthermore, to integrate fully into the world economy, Argentina needed to put relations with the United States and Western Europe on a fresh footing. It also needed to join the multilateral system of trade and finance and the international institutions—the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD)—that had steered postwar commercial and financial recovery. Pending problems with foreign companies belonging to the former transport corporation also had to be solved.

In early 1956 the government began to address most of these issues.56 The provisional government, however, remained in power only until a new constitutional government, elected in February 1958, assumed office. Furthermore, its policies were resisted by a society not fully prepared to endorse the liberalization of the national economy. All the provisional government could do for the Transport Authority, therefore, was to reduce personnel by 10 percent and try to rationalize finances and administration. Even so, the government had to appropriate greater annual amounts of public funds to cover between 50 and 65 percent of the Transport Authority’s operating expenses and guarantee minimal public transportation in Buenos Aires.57

The provisional government made few capital investments, so except for the subways the Transport Authority’s rolling stock in service continued to decrease. Not surprisingly, its share of local passenger traffic slumped, annual losses soared, and the incoming government led by President-elect Arturo Frondizi had to resolve the matter (table 6).58

At first the Frondizi administration thought the Buenos Aires Transport Authority was recoverable, and took ambitious measures to put the entity on a sound financial footing and improve services. In March 1960 a few obsolete colectivo lines still operated by the authority were privatized. Passenger fares were sharply increased; plans to renovate tramway and subway coaches and expand the subway network were launched; and in July 1961 modern buses replaced two dilapidated tramway lines.59

These efforts notwithstanding, the decline in the Transport Authority’s serviceable rolling stock continued. Moreover, the available statistics on the authority’s operations show that until 1961, soaring government loans still covered most of its operating expenses.60 Quite understandably, the relentless trends in annual losses and passenger traffic continued (see table 7).61

The Frondizi government therefore took three steps that reversed its previous policy. In July 1961, 40 private omnibus companies still operating in the city and suburbs were authorized to expand their services. The loans to the Transport Authority, a millstone in the national budget, mostly subsidized the bus network; so in September these services were turned over to private companies. In February 1962, the government decided to liquidate the Transport Authority and offer its services on a concession basis to the private sector.62

This drastic step was taken for two reasons. The need to streamline the national budget imposed cuts in the appropriations for this bankrupt and irrecoverable state venture. By now, moreover, because of the Frondizi government’s economic policies, the automotive industry had blossomed in Argentina. It could supply independent bus and colectivo companies that in turn could meet growing local transport needs with efficient services on short notice.63

The liquidation took place quite rapidly. By February 1963, private colectivo companies had taken over the tramway itineraries and absorbed part of the Transport Authority’s work force. The trolleybuses were replaced by private buses that apparently became colectivo companies in the early 1970s. On the other hand, according to the scarce information provided by surviving sources, the disposal of the subway network proved to be more difficult.64

Originally, for unspecified reasons, the Frondizi government had intended to create a joint venture to run the subways. But the Secretariat of Transportation objected to the legal and financial terms of the project. Finally, in May 1963, a new government, more nationalist and statist, formed a state company, Subterráneos de Buenos Aires, S.A.65 In other words, Buenos Aires finally began to see modern and reliable public transportation when private automotive companies and a state-owned subway network replaced the Transport Authority.

In the meantime, the disappearance of Transportes de Buenos Aires and the development of automotive transportation during the 1960s turned the tramway companies into relics devoid of macroeconomic significance. The Anglo Argentine Tramways Company settled its claims against the state only in 1965, when the courts ruled that the Argentine government should pay an indemnity whereby company creditors and preferred shareholders collected part of their outstanding debts and dividends. When the state finished paying this compensation, the history of a complex association between the company and the transport corporation in a frustrated experience of Argentine state entrepreneurship came to an end.


The Buenos Aires Transport Corporation was created primarily as a joint venture to address grave problems, dating from the 1920s, that neither the private sector nor existing legislation could solve: traffic circulation in central neighborhoods and downtown; the emergence of competitive automotive transportation; the need to regulate automotive competition and fix reasonable fares in the city; and the integration of the Spanish subway company CHADOPYF into the local market. Yet local social and political dynamics, the distortion of the corporation’s objectives over time, management problems, and poor relations between the state and the private sector impeded the fulfillment of these aims. Under these circumstances, moreover, the losing parties ultimately were the same private tramway companies that had advocated the creation of the corporation and had joined it with the hope of reversing their own decline.

To a large extent, the changing social and political environment surrounding the transport corporation shaped the history of its rise and fall. In the early 1930s President Justo, the Lord Mayor, and the Concordancia deputies and senators who defended the corporation believed the government had to preserve a “sphere of influence” for the tramway concerns and make a political gesture toward the Anglo Argentine Tramway Company to maintain the traditional British-Argentine economic connection. Yet once the corporation was launched and its policies established, more vocal bureaucrats, harboring serious misgivings about foreign capital and advocating a strong regulatory role for the state, gradually prevailed. Their influence and management style undoubtedly culminated, during the 1943-46 military regime, in conflictive state-private sector relations on the board, which led to the demise of the enterprise.

Clearly, the corporation had commercial and social objectives. It was supposed to streamline company operations, provide good services, match competing vested interests, charge “just and reasonable” fares, and yield a guaranteed annual return to its shareholders. Its social priorities were to normalize corporate contributions to the workers’ retirement and pension funds and to maintain welfare benefits granted to the workers by previous legislation. Nevertheless, in most major decisions on rates, wages, salaries, and benefits, questionable deficit-spending policies overruled economic or business considerations. For example, since the corporation’s inception the board had tended to set artificially low fare rates, and even the Perón government at the height of its power had problems abandoning this practice. In sum, all governments but the 1955-58 provisional regime and the Frondizi administration ended up paying lip service to efficiency, modernization, and profitability in the corporation, but accomplished no real reforms.

The corporation therefore never developed consistent and adequate management. During its early years, the government—private sector disputes on the board affected its planning, capitalization process, and rate policy, and served as evidence of excessive government interference in the corporation’s internal affairs. Moreover, with the marked nationalist swing in the Concordancia that appeared in the early 1940s, overzealous overseers such as Allende Posse and Corominas Segura developed a penchant for defending the “public interest” that widened the breach between the state and the private sector.

Later these divisions worsened when officials like Abarca upheld those beliefs, and as a result the state adopted deliberate policies that melded statism, economic nationalism, and even populism. Thus, because the Argentines felt they had strong reasons to distrust the intentions of foreign capital and its local associates involved in the corporation, they also dismissed obvious principles of sound administration and allowed management to become extremely politicized. When the provisional and Frondizi governments came to power in the 1950s, it was too late to steer the corporation back to rational decision making or demonstrate that this state venture could be efficient and profitable.

Under these circumstances, friction between private sector and government board members became commonplace, and the corporation hobbled from one crisis to another. All the corrective measures taken to improve services and finances up to 1955 had inherent defects that prevented them from achieving their goals. Inevitably, then, the corporation came to embody the failings of state entrepreneurship in Argentina, and after trying vainly to make it financially independent from the government the Frondizi administration had to liquidate it in the early 1960s.

As of this writing, a Peronist administration (1989-95) is transferring state-owned companies to the private sector and has adopted policies explicitly targeted to attract foreign investments as a cornerstone for solving important national problems. This reform is being carried out without apparent reference to the past experience of state and foreign entrepreneurship in the country. Yet although the state will no longer play a meaningful role in the Argentine economy, several reasons account for the contemporary relevance of the topic of this essay. Only a thorough knowledge of the past experience of state corporations in Argentina can help move discussions about them beyond the realm of theory and help devise an effective and purposeful future role for the state. The case of the transport corporation suggests that the history of other state ventures yet to receive scholarly attention will most likely relate to the shortcomings and the controversial role of foreign business in modern and contemporary Argentina.

The author is grateful to the HAHR editors and anonymous reviewers whose comments helped improve earlier versions of this essay. Financial support for the completion of this study was provided by Argentina’s CONICET, and Fulbright-Hays and Tinker Foundation fellowships at Brown University, the University of Connecticut, and the University of North Carolina at Chapel Hill.


On other Argentine state enterprises see Orietta Favaro and Marta B. Morinelli, Petróleo, estado, y nación (Buenos Aires: Centro Editor de América Latina, 1991); Susana Novick, IAPI: auge y decadencia (Buenos Aires: Centro Editor de América Latina, 1986); María del C. Angueira and Alicia del C. Tonini, Capitalismo de estado, 1927-1956 (Buenos Aires: Centro Editor de América Latina, 1986); Carl Solberg, “Entrepreneurship in Public Enterprise: General Enrique Mosconi and the Argentine Petroleum Industry,” Business History Review 56:3 (Autumn 1982), 380-99; idem., “YPF: The Formative Years of Latin America’s Pioneer State Oil Company, 1922-39,” in Latin American Oil Companies and the Politics of Energy, ed. John Wirth (Lincoln: Univ. of Nebraska Press, 1985), 51-102; George Philip, Oil and Politics in Latin America: Nationalist Movements and State Companies (Cambridge: Cambridge University Press, 1982); Marta Panaia and Ricardo Lesser, “Las estrategias militares frente al proceso de industrialización, 1943-1947,” in Estudios sobre los orígenes del peronismo, ed. Panaia, Lesser, and Pedro Skupch (Buenos Aires: Siglo Veintiuno Argentina, 1975), 2:95-164; Juan Carlos Esteban and Luis Ernesto Tassara, Valor industrial y enajenación de DINIE (Buenos Aires: Editorial Cátedra Lisandro de la Torre, 1958).


See Norberto González and David Pollock, “Del ortodoxo al conservador ilustrado. Raúl Prebisch en la Argentina, 1923-1943,” Desarrollo Económico (Buenos Aires) 30:120 (Jan.–Mar. 1991), 466–67; Pedro Skupch, “El deterioro y fin de la hegemonía británica sobre la economía argentina, 1914-1947,” in Panaia, Lesser, and Skupch, Estudios sobre los orígenes del peronismo, 2:38-41, 44-46; idem., “Las consecuencias de la competencia de transportes sobre la hegemonía económica británica en la Argentina, 1919-1939,” Económica 17:1 (Jan.–Apr. 1971), 134-35; Benjamín Villafañe, La tragedia argentina. El Palomar. La CHADE. La coordinación y Corporación de Transportes y otros negociados (Buenos Aires: n.p., 1943), 258-63; Luis V. Sommi, El monopolio inglés del transporte en Buenos Aires (Buenos Aires: Editorial Argumentos, 1940).


The divestment of the state in the late 1980s began with the privatization of the former state-owned national airline company, Aerolíneas Argentinas, and the telephone monopoly, Entel Argentina S.A. The airline company now belongs to a consortium headed by Iberia, the Spanish airline. Since November 1991 the telephone services have been provided by two consortia led by Telefónica de España and STET-France Cable et Radio. For a useful overview of the process as of late 1992, see “Los herederos del estado,” Clarín (Buenos Aires), Sept. 20, 1992, Economic Supplement, 1-5.


The Anglo Argentine Tramways was the aforementioned British concern. The Southern Electric Tramways and Lacroze Tramways were Argentine, and The Buenos Ayres Town and Docks Tramways was Anglo-Argentine.


The colectivos, or jitneys, originally were taxicabs. Because demand for their services fell, in September 1928 the owners began to amalgamate into small and medium-sized companies, offering more competitive urban transportation than the tramway along fixed routes in some outlying neighborhoods of western Buenos Aires. When this initiative received a favorable popular response, they gradually expanded their services to the more central neighborhoods. The owners also began to use bigger vehicles with specially designed bodies that were built locally and mounted on truck chassis.


See Compañía de Tranvías Anglo Argentina Ltda. and Compañía de Tranvías Lacroze de Buenos Aires Ltda., Problema de los transportes colectivos en la ciudad de Buenos Aires, pamphlet (Buenos Aires, 1932); and Compañía de Tramways Eléctricos del Sud, Exposición relativa a su situación financiera y alas medidas solicitadas a los poderes públicos nacionales para mejorarla, pamphlet (Buenos Aires, 1932). For the attitude of the local government and the executive branch, see correspondence in Public Record Office, London, Foreign Office 371 (hereafter cited as FO 371), A708/126/2; Eugene Millington-Drake to Foreign Office, Buenos Aires, Sept. 8, 1931, ibid., A5881/1125/2; and Ambassador Ronald Macleay to Foreign Secretary John Simon, Confidential, Buenos Aires, Feb. 1, 1932, ibid., A1155/126/2.


For President Justo’s attitude and political constraints see, in FO 371, Macleay to Simon, Buenos Aires, Jul. 5, 1932, A4601/126/2; Macleay to Foreign Office, Confidential, Buenos Aires, Jul. 19, 1932, A5530/126/2; Tito Arata to Duke of Atholl, Buenos Aires, Dec. 9, 1932, A8257/126/2. See also Duke of Atholl to Arata, Personal, London, Dec. 23, 1932, Archivo General de la Nación, Buenos Aires (hereafter AGN), Fondo Documental Presidente Justo, Ministerio de Hacienda, box 41, 1929-1932, doc. 123. The Duke of Atholl was the chairman of the Anglo Argentine and Arata was the chairman of its local board in Buenos Aires.


See Arata to Duke of Atholl, Buenos Aires, Jan. 5, 1933, FO 371, A522/440/2; Concejo Deliberante de la Ciudad de Buenos Aires, Sesión del 7 de abr. de 1933, pp. 181-82; and Informe de la Comisión Especial designada por la intendencia municipal de la ciudad de Buenos Aires para el estudio de la organización y coordinación de los transportes colectivos dentro de la misma y su zona de influencia (Buenos Aires: Compañía Impresora Argentina, 1933). 3-5.


See Informe de la Comisión Especial ... de . . . Buenos Aires, 10-11, 17, 25-26; Review of the River Plate (Buenos Aires), Mar. 16, 1934, p. 22, and Apr. 6, 1934, pp. 23-27; John Leche to Simon, Buenos Aires, Mar. 20, 1934, FO 371, A3012/111/2; and Concejo Deliberante, Sesión del 18 de mayo de 1934, pp. 128-33.


The Concordancia was a coalition of Conservatives, antipersonalist Radicals who opposed the Yrigoyenistas, and the Independent Socialists, a group of moderate Socialists who had broken with the party in 1927. It emerged for the 1932 general elections and dominated Argentine national politics until it was removed from power by a military coup in June 1943.


Congreso Nacional, Cámara de Diputados de la Nación, Sesión del 8 de agosto de 1934, 187-207; La Prensa (Buenos Aires), Sept. 7, 1934, p. 9; La Vanguardia (Buenos Aires), Sept. 7, 1934, p. 12, Sept. 9, 1934, p. 1, and Sept. 26, 1935, p. 10; Winthrop Wright, British-owned Railways in Argentina: Their Effect on Economic Nationalism, 1854-1948 (Austin: Univ. of Texas Press, 1974), 177-91.


See Congreso Nacional, Cámara de Senadores de la Nación, Sesión del 29-30 de set. de 1936, 506-99; La Vanguardia, Oct. 1, 1936, p. 1; and Wright, British-owned Railways, 182–86.


These were the Buenos Aires Great Southern, the Western, the Central Argentine, and the Buenos Ayres and Pacific.


In Argentina the government uses the razones de utilidad pública to account for decisions meant to protect community, state, or national interests from individualistic concerns. In this case the national government appeared to be concerned about the need to benefit local commuters.


See Law 12,311, art. 1 (h).


These assets were their shops, garages, spare parts, rolling stock, and real estate. In the valuation the usage depreciation would be deducted from the original cost.


For the launching of the corporation see Leche to Anthony Eden, Buenos Aires, Jan. 21, 1937, FO 371, A1095/106/2; La Nación, Jan. 15, 1937, p. 8, and Jan. 19, 1937, p. 7; La Prensa, June 11, 1938, p. 9, and Aug. 11, 1938, p. 10; Esmond Ovey to Lord Halifax, Buenos Aires, Jan. 13, 1939, FO 371, A535/29/2; and Corporación de Transportes de la Ciudad de Buenos Aires, Memoria y balance, 1939, 7–10.


For the technical problems of rolling stock see Stanley Irving to Foreign Office, Buenos Aires, June 21, 1937, FO 371, A4994/106/2; La Prensa, June 13, 1938, p. 6, Apr. 17, 1939. p. 11. and May 3, 1939, p. 14; Veritas (Buenos Aires), May 15, 1939, pp. 453-54; Review of the River Plate, Apr. 21, 1939, p. 20; and “Informe de la comisión especial del Senado sobre la Corporación de Transportes de la Ciudad de Buenos Aires,” Congreso Nacional, Cámara de Senadores de la Nación, 1948, 3:2382-83. For the problems with the colectivos see La Prensa, Feb. 18, 1939, p. 10; Times (London), July 28, 1939, p. 20; and Ovey to Eden, Buenos Aires, Jan. 22, 1938, FO 371, A820/597/2.


For the origins and characteristics of this fund see República Argentina, Ministerio del Interior, Ley 11,110. Jubilación de empleados y obreros de empresas particulares, pamphlet (Buenos Aires, 1921); and Crónica Mensual del Departamento Nacional de Trabajo (Buenos Aires) 5:49 (Jan. 1922), 785-88.


See Bank of England Minutes, London, Apr. 18, 1939, and Cazenove Akroyds and Greenwood Co. to Secretary of the Foreign Transactions Committee, London, May 15, 1939, Bank of England Archive, London, Representative Country Files, Argentina, OV 102/10; Times, May 24, 1939, p. 24; and Corporación de Transportes, Memoria y balance, 1940, 19.


See Law 12,311, art. 1 (g); and Memorandum from F. H. Frank, Anglo Argentine Tramways Co. [prepared for the Foreign Office], May 1, 1942, FO 371, A4938/406/2.


See La Nación, Feb. 4, 1938, p. 1.


For the appointment of the corporation’s chairman and one of its vice presidents see ibid. For Allende Posse’s career and attitudes see Raúl García Heras, Automotores norteamericanos, caminos, y modernización urbana en la Argentina (Buenos Aires: Libros de Hispanoamérica, 1985), 69–79; and Diccionario biográfico de hombres de negocios. Biografías contemporáneas, 1st ed. (Buenos Aires: Veritas, 1945), 22.


For the obligation to address the question of the rates see Law 12,311, art. 2 (c). For the rise in wages and salaries see Times, July 28, 1939, p. 1; and South American Journal (London), July 29, 1939, p. 113.


For the modernization efforts see La Razón (Buenos Aires), Sept. 20, 1941, p. 7; La Prensa, Oct. 17, 1942, p. 6; and Corporación (Buenos Aires), Mar. 1940, pp. 17-19, Mar. 1942, p. 17, May 1942, pp. 24-26, Dec. 1942, pp. 4–5, Feb. 1943, pp. 9, 20-21, and Apr. 1943, pp. 24-25.


See Ovey to Halifax, Buenos Aires, Feb. 3, 1940, FO 371, A1125/19/2; Anales de legislación argentina, 1943, 3:166; and Report by Joe D. Walstrom, Assistant Trade Commissioner, Jan. 23, 1940, National Archives, Washington, D.C., Bureau of Foreign and Domestic Commerce, RG 151, Argentina, 14E-3/14-7-6.


See Anales de legislación argentina, 1943, 3:165-67; Ovey to Eden, Buenos Aires, Mar. 7, 1941, FO 371, A2517/561/2, and Sept. 15, 1941, FO 371, A9193/561/2; David Victor Kelly to Foreign Office, Buenos Aires, Apr. 1, 1943, FO 371, A3201/24/2; Kelly to Eden, Buenos Aires, Apr. 7, 1943, FO 371, A4165/24/2; La Nación, Mar. 4, 1943, p. 4, and May 29, 1943. p. 5; and Carlos Rueda, Fideicomisarios de los tenedores de debentures de la Compañía Hispano Argentina de Obras Públicas y Finanzas (CHADOPYF) contra la Corporación de Transportes de la Ciudad de Buenos Aires, pamphlet (Buenos Aires, 1940).


For the problems during the early years of the war see South American Journal, Jan. 3, 1942, p. 5; Foreign Relations Minister to Ambassador Manuel Malbrán in London, Buenos Aires, Mar. 9, 1940, Ministerio de Relaciones Exteriores, Buenos Aires (MRE), Archivo Embajada Argentina en Londres, caja 231, Bloqueo-Guerra-1939, carpeta 25; Domecq García to Foreign Relations Minister, Buenos Aires, May 27, 1941, MRE, Dirección de Asuntos Económicos (DAE), Estados Unidos, 1941, unnumbered box, leg. 21, carp. 4; and Corporación de Transportes, Memoria y balance, 1940, 15. For the boycott against the corporation see Ambassador Felipe Espil to Ministry of Foreign Relations, Washington, D.C., June 23, 1942, MRE, DAE, Estados Unidos, 1941, unnumbered box, leg. 20, carp. 26; Espil to Secretary of State, Washington, D.C., May 18, 1943, NA, RG 59, M 1322, 835.24/1575; Corporación de Transportes, Memoria y balance, 1943, p. 19; State Department Memorandum, Sept. 23, 1942, NA, RG 59, M 1322, roll 27, 835.50/92; and Carlos Escudé, Gran Bretaña, Estados Unidos, y la declinación argentina, 1942-1949 (Buenos Aires: Editorial de Belgrano, 1983), 263.


Sofina was the acronym of Société Financière des Transports et d’Enterprises Industrielles, a transnational holding company based in Belgium. It was founded in 1898 to obtain and operate concessions for electricity and urban passenger transportation services. By the early 1930s it was active in Latin America, where it owned companies such as the Anglo Argentine Tramways Company Ltd. and the Compañía Argentina de Electricidad in Buenos Aires, the Mexican Light and Power Company and the Mexican Tramways Company in Mexico, and the Société d’Electricité in Rosario, Argentina. For more details see the holding company’s brochure, FO 371, J1056/1056/16 (1929); Department of Overseas Trade Minute, London, Jan. 28, 1932, FO 371, A595/551/26; and Luis V. Sommi, Los capitanes yanquis en la Argentina (Buenos Aires: Editorial Monteagudo, 1949), 96-111.


The Bembergs were a widely known family of financiers, landowners, and industrialists of German-Argentine descent whose origins dated back to the second half of the nineteenth century. They exemplified the allegedly “sellout-minded” oligarchy that the 1943-46 military regime, and the Peronist government that followed, sought to destroy. Apart from their financial activities, some of their most important enterprises were the Empresa Brasserie de Quilmes; the Algodonera Santa Fe; and the Cervecerías Quilmes, Palermo, Los Andes, del Norte, and Santa Fe. See “El caso Bemberg,” Primera Plana (Buenos Aires), 7:304 (Oct. 22, 1968), 59-61; and “La casa Bemberg,” Apertura (Buenos Aires) 22 (Sept.–Oct. 1989), 46-50.


In Argentina the notion of public interest is similar to the razones de utilidad pública explained earlier. It means that the government will subject its respect of private sector aspirations to the same qualifications. For the loan agreement see Contrato de debentures entre la Corporación de Transportes de la Ciudad de Buenos Aires y el fideicomisario Dr. Julio A. Roca (h.), Buenos Aires, Feb. 12, 1942, AGN, Fondo Julio A. Roca hijo, leg. 1, Actividad privada (1898-1947), doc. 153; Memorandum from A. Waller, local representative of the Anglo Argentine Tramways Co. [prepared for the Foreign Office], Private and Confidential, Buenos Aires, Aug. 11, 1942, FO 371, A10140/406/2; and La Nación, Feb. 13, 1942, p. 5.


The sources do not specify why the loan was used to purchase only the colectivos. It seems that the loan was insufficient for both purposes.


For the condition of the colectivos see “Informe de la comisión especial del Senado.”


For this trend in official thinking see Raúl García Heras, “Capitales extranjeros, poder político, y transporte urbano de pasajeros: La Compañía de Tranvías Anglo Argentina Ltda. de Buenos Aires, Argentina, 1930–1943,” Desarrollo Económico 32:125 (Apr.–June 1992), 50-52.


For the passenger traffic and finances of the corporation see ibid., 53. For data on the condition of the rolling stock see “Informe de la comisión especial del Senado.” For the deficits see Corporación de Transportes, Algunos de sus problemas económicos (Buenos Aires: n.p., 1945).


For the transport situation and electricity shortage in Buenos Aires see Confidential Military Attaché Report on Argentina, Buenos Aires, May 20, 1944, NA, RG 226, Military Intelligence Division, W. D. G. S. (77348); and Conrado Wolfes, La provisión de energía eléctrica en la zona del Gran Buenos Aires durante la guerra (Buenos Aires: n.p., 1946). For the energy and fuel-saving measures see La Prensa, Oct. 31, 1943, p. 7; Times, Mar. 16, 1945, p. 3, and July 10, 1945, p. 3; and Economic Survey (Buenos Aires), Aug. 7, 1945, 1-4.


For Abarca’s and Sánchez de Bustamante’s ideas see García Heras, “Capitales extranjeros,” 56. For the ideology of the Sabbatinistas—followers of Amadeo Sabbatini, former Radical governor of the province of Córdoba—see Roberto A. Ferrero, Sabbatini y la decadencia del yrigoyenismo (Buenos Aires: Ediciones del Mar Dulce, 1981), 2:116-51, 157-64; La Prensa, June 29, 1943, p. 6; and Minutes by J. B. Jerram, Buenos Aires, June 30, 1943, FO 371, A7050/24/2.


See Telegram, Kelly to Foreign Office, Buenos Aires, July 1, 1943, FO 371, A6186/24/2; and Coded telegram, Kelly to Foreign Office, Buenos Aires, July 20, 1943, FO 371, A6765/24/2.


For this report see La Prensa, Aug. 27, 1943, p. 6.


See Kelly to Eden, Buenos Aires, Aug. 26, 1943, FO 371, A8392/24/2; Foreign Office Minutes by Sir Edward Mather-Jackson, London, Jan. 12, 1944, FO 371, AS 140/69/2; La Prensa, Aug. 21, 1943, p. 8, Aug. 22, 1943, pp. 8-9.


See Coded telegram, Kelly to Eden, Buenos Aires, Mar. 1, 1944, FO 371, AS 1408/69/2; South American Journal, May 6, 1944, p. 251; La Nación, June 15, 1944, p. 1, June 24, 1944, p. 5; Decree 47,688, Feb. 26, 1944.


The corporation’s employees obtained higher wages and salaries, shorter work days, better working conditions, an annual bonus, legal recognition for the tramway union (the Unión Tranviarios) as their representative, and generous fringe benefits.


See La Nación, Apr. 26, 1944, p. 7; [?] Shuckburgh to Eden, Buenos Aires, Aug. 10, 1944, FO 371, AS634/69/2; Revista de Trabajo y Previsión (Buenos Aires), 1:2 (Apr.-June 1944), 592-95; Waller to Frank, Buenos Aires, Nov. 9, 1945, FO 371, AS6080/337/2; Decrees 28,054/45 and 28,055, Nov. 7, 1945; Boletín de la Unión Tranviarios (Buenos Aires), Nov. 14, 1945, pp. 3-4; Financial Times (London), Nov. 26, 1945, in FO 371, AS6184/337/2; and El Tranviario (Buenos Aires), May 1946, p. 16.


For the rolling stock see “Informe de la comisión especial del Senado.” For the financial situation see La Nación, Dec. 5, 1945, p. 12; Corporación de Transportes, Algunos de sus problemas económicos, and Memoria y balance, 1945, 12-13. For the loans see La Prensa, Nov. 21, 1945, p. 8; British Embassy to Foreign Office, Buenos Aires, Dec. 10, 1945, FO 371, AS37/37/2; and Kelly to Ernest Bevin, Buenos Aires, Feb. 11, 1946, FO 371, AS1191/37/2.


See Waller to Frank, Buenos Aires, June 22, 1943, and Foreign Office Minutes by Victor Perowne, FO 371, A6726/24/2; Telegram, Kelly to Eden, Buenos Aires, July 1, 1943, FO 371, A6186/24/2; and Kelly to Eden, Buenos Aires, July 21, 1943, FO 371, A7332/406/2.


The trolley buses were modern buses propelled by electricity taken from an overhead wire by a trolley. For the modernization of services see Noticias Gráficas (Buenos Aires), July 18, 1946, p. 9; La Razón, July 18, 1946, p. 5; Review of the River Plate, May 2, 1947, pp. 11-12; Clarín, June 4, 1948, p. 5, and June 5, 1948, pp. 6-7, 9. For the enlistment of the union’s vice president see El Tranviario Automotor (Buenos Aires), Nov. 1949, p. 8. For the rate increase see Decree 27,858, Nov. 5, 1949; and Times, Nov. 5, 1949, p. 3.


Data on the performance of the corporation for 1945-47 come from Memoria y balance, 1945-1947. In 1948 the corporation stopped publishing its annual reports and balance sheets. Consequently, the subsequent data on its performance come from Dirección General de Estadística, Síntesis Estadística Mensual and Boletín Mensual de Estadística (Buenos Aires); local newspapers; and Transportes de Buenos Aires S.A., Informe final. Intervención liquidadora (Buenos Aires, 1963), 8 vols. This is the report of a commission that dissolved the company and privatized all local passenger transportation but the subways in the early 1960s. The data on the number of corporation workers and white-collar workers come from various issues of Dirección General de Estadística, Síntesis Estadística Mensual de la República Argentina.


On the delay in a more realistic economic policy until 1952, see Robert A. Potash, The Army and Politics in Argentina, 1945-1962 (Stanford: Stanford Univ. Press, 1979), 92-94, 105. For the disputes about the corporation’s policies see “Todo, menos la CADE,” Primera Plana 4:1988 (Aug. 2, 1966), 38. For the pay increases and benefits to personnel see El Tranviario, Dec. 1947, p. 1; Jan. 1948, pp. 8-9; Sept. 1948, p. 12; Decree 19,411, Aug. 16, 1949; and Boletín Extraordinario de El Tranviario Automotor, July 15, 1949, pp. 2-3.


La Nación, Aug. 7, 1948, p. 5; and Times, Aug. 24, 1948, p. 7.


See Congreso Nacional, Cámara de Senadores de la Nación, Sesión del 22 de setiembre de 1948, pp. 2373-90.


See Congreso Nacional, Cámara de Diputados de la Nación, Sesión del 29 y 30 de setiembre de 1948, pp. 4864-901; and La Nación, Sept. 23, 1948, p. 9.


For the rate increase see FO 371, A1463/6 (1953); and Review of the River Plate, June 30, 1954, p. 21.


For the operation and condition of the colectivos see La Nación, July 2, 1955, p. 3; Clarín, June 28, 1955, p. 4; and Transportes de Buenos Aires S.A., Memoria anual, 1956 (Buenos Aires), 29, 281–85. The reduction in personnel between 1954 and 1955 suggests that the authority eliminated about five thousand jobs. See Dirección de Estadística y Censos, Boletín Mensual de Estadística, Sept. 1956, pp. 800-801.


Dirección General de Estadística y Censos, Síntesis Estadística Mensual and Boletín Mensual de Estadística; Transportes de Buenos Aires S.A., Informe final.


For the rise in debts and loans see Corporación de Transportes, Algunos de sus problemas económicos; La Nación, Jan. 2, 1956, p. 2; Transportes de Buenos Aires, Informe final, 1:26-27.


See Gary Wynia, Argentina in the Postwar Era: Politics and Economic Policy Making in a Divided Society (Albuquerque: Univ. of New Mexico Press, 1978), 138-65; Julián Delgado, “Historia del Plan Prebisch,” Primera Plana 6:249-54 (Oct. 3, 10, 17, 24, Nov. 7, 1967); and Poder Ejecutivo Nacional, Ministerio de Hacienda, Sistema multilateral argentino de comercio y de pagos (Buenos Aires, 1957).


The comments on the lack of an entrepreneurial policy are based on interviews with Adalbert Krieger Vasena, Buenos Aires, May 30, 1990; and Julio Cueto Rúa, Buenos Aires, May 17, 1990, and Jan. 9, 1991. Krieger Vasena was financial adviser to a mission sent to the United States in 1956, board member of Argentina’s central bank in 1956-57, and finance minister in 1957-58. Cueto Rúa was minister of industry and commerce in 1957-58. For the reduction in personnel and the rise in loans see Transportes de Buenos Aires, Informe final, vol. 3, anexo B1, p. 13, and vol. 1, pp. 26–27.


See Municipalidad de Buenos Aires, Revista de Estadística de la Ciudad de Buenos Aires 1959, no. 1, pp. 108-11.


See Transportes de Buenos Aires, Informe final, vol. 3, anexo B1, pp. 7–8; La Nación, Mar. 25, 1960, p. 3, Nov. 29, 1960, p. 1, July 13, 1961, pp. 1, 8, and July 14, 1961, p. 5.


Transportes de Buenos Aires was wound up between February 1962 and early 1963. Although the entity operated while it was in liquidation, the Boletín and the Informe final provide data on its finances and passenger traffic only until 1961.


For the deterioration of the rolling stock see Revista de Estadística de la Ciudad de Buenos Aires, 1959, no. 1, pp. 108-11; 1961, no. 6, pp. 112-14; and 1962, no. 8, pp. 107–9. For the loans see Transportes de Buenos Aires, Informe final, 1:26-27.


For the government’s measures see La Nación, July 13, 1961, pp. 1, 8; July 28, 1961, p. 5, and Oct. 26, 1961, p. 4; Decrees 11,392/60 and 1,347/62; Transportes de Buenos Aires, Informe final, 1:26; and La Prensa, Feb. 16, 1962, pp. 1, 20.


The measures that encouraged the growth of automotive transport were roadbuilding programs, a foreign investments law in December 1958, and Decree 3,693 of March 1959. For the imperatives that led to the liquidation of Transportes de Buenos Aires see Arturo Acevedo, La privatización del servicio de transportes de Buenos Aires y las observaciones de la Fiscalía Nacional de Investigaciones, pamphlet (Buenos Aires: n.p., 1963). Acevedo was minister of public works in the Frondizi administration until January 1962, when he resigned because of disagreements with the president. Frondizi did not wish to pay the political cost of implementing a thorough rationalization scheme in the state-owned railways. See Confidential telegram, Ambassador G. Middleton to Foreign Office, Buenos Aires, Jan. 15. 1962, FO 371, A1015/4; and Middleton to the Foreign Secretary, Confidential, Buenos Aires, Jan. 24, 1962, FO 371, A1015/7.


La Nación, Feb. 20, 1963, p. 7; interview with engineer Roberto Santiago Servente, Buenos Aires, Feb. 12, 1991. Servente was secretary of transportation in 1962.


See La Nación, Feb. 20, 1963, p. 7; Decree 4,405 of May 30, 1963; and Transportes de Buenos Aires, Informe final, 1:101, 159-65.