ARGENTINATHE GREAT DEPRESSION

KirusanAchuthanRaeesahSaakethiya

BACKGROUND INFORMATION

Argentina

Location of Argentina

Argentina is in the southern part of South America. The South Atlantic Ocean surrounds the east and south of Argentina.

Map of Argentina

Government

The Radical Party took the place of the conservative National Autonous Party (PAN)

  Argentina grew as a democratic county until 1930 were a military coup occurred that kept Argentina in a period of dictatorship until the 1980s

Government

In 1916, Argentina became a full democracy with the election of the Radical Party, lead by Hipolito Yirigoyen.

Economy

Between 1860 and 1930, Argentina had the strongest economy in South America with an annual growth that averaged at 6.3%.

Main Source of Income

Argentina’s main source of income during this time came from exports of beef and wheat but the economy was modernizing with the development of local industries and handicrafts.

1880s

Beginning in the 1880s, Argentina began to modernize and began to focus on domestic buisnesses.

Views of the Public

These people wanted the government to focus on economic nationalism rather than the traditional economic system which focused on foreign trade (especially with the UK).

Economic Ties

     Argentina’s economy was closely tied with the British economy because of Argentina’s exports of meat and its imports of coal and petroleum.

Exports

Argentina had a variety of exports; wheat and beef were its main export but it also exported linseed and corn.

Reasons to Growth in Industrial and Domestic sectors

WWI stimulated industrial growth but after the war the country fell into a depression as its foreign market came to a halt. This lead to further domestic growth.

Effects of Economic Growth

   With this economic growth came more urban workers and immigrants. These people had revolutionary ideas about the organization of labor and the use of strike action to secure benefits. Many of the immigrant leaders were expelled from the country but the movement became larger during the 20th century. Radical support for labor varied but during its highest points, it was a positive turning point of the working class.   

EFFECTS OF THE GREAT DEPRESSION & STRATEGIES TO OVERCOME THE GREAT DEPRESSION

Argentina

International Depression

Demand for goods

decreased

Less inflow of capital

Value of Latin American currency

decreases

Unemployment rises

Fall in foreign investment

Debt accumulation

Government

Great Depression was one of the factors that led to the dictatorship

military took power in Argentina, Brazil, Chile, Guatemala, Honduras and Peru after the Wall Street Crash

This “infamous decade” was a period of political opposition, electoral fraud and political fraud

In 1932, immigrants had to have proof of financial support working before immigrating

Essentially, the militarily enforced government continued to exist throughout the Great Depression

Effects of the Great Depression

Foreign Relations/ Trade

Immediate impact on Argentine export due to  dependency on foreign trade

Europe and the US implement protectionist policies (keep their own farmers)

Concordancia government followed liberal trade until mid-1930s

Roca-Runciman Pact 1933 Restrictions put on Argentina to

restore positive trade with the UK Argentina was to promise to

choose British manufactured goods and protect British corporations from nationalization

Led to closing private bus companies that had emerged in Buenos Aires, which was a disadvantage to Argentina

Import Substitution Industrialization Wanted to be reliant on

industries within the nation, thus tried to expand internally

Effects of the Great Depression

Strategies to Overcome Issues

Unemployment

Businesses laid off workers

Civil servants had to be paid little; customs duties provided the government with no income due to lack of exports/imports

Was not a huge issue in Argentina anyways

Public works were set up despite government costs → would benefit domestic market

32 000 mile highways were built, in comparison to the previous 5000 miles → led to motor industry → strayed away from dependence on British-owned railways

Effects of the Great Depression

Strategies to Overcome Issues

Compare this situation to that of images that we have seen from the US, Canada and other Latin American nations during the Great Depression.

Unemployed men of Villa 31 in Retiro (Buenos Aires)

Agriculture

A series of policies were created to facilitate primary areas of income (livestock and agriculture) with agricultural regulatory boards that lobbied protectionist policies

Create a self-supporting nation with a method called Import Substitution Industrialization (ISI)

Caused situation to worsen as encouraging industrial growth overpowered agricultural growth

Strategies to Overcome Issues

Results of Strategies

Argentine Industries

YPF State run oil company expanded

production to reduce dependency on oil imports

After seeing Mexico’s nationalization of oil, private companies dropped prices in 1934 in opposition to YPF reform

Eventually, the government negotiated that half of Buenos Aires market went to YPF to continue economic stimulation

Argentine entrepreneurs found alternatives for lack of imports by creating new industries

Government protected these industries with tax incentives and tariffs

ISI and growth of industries created jobs for the unemployed

Effects of the Great Depression

Strategies to Overcome Issues

Economy

In 1929, had the world’s 4th highest GDP

Although sectors such as unemployment were not as affected as they were with the other Americas, economic expansion was permanently brought to end

Peso was devalued which increased competition in exports 1929: $1537 million in exports 1932: $561 million in exports

Reforms to the credit and banking system took place

Effects of the Great Depression

Strategies to Overcome Issues

Economic Trends

GRAPH 2: Deposits, Loans (in Thousands of pesos, left axis) and Shares Quotations (right axis) 1925 – 1935

GOVERNMENT

Argentina

Political Leadership of Argentina(1916-1943)

Leader Year

Hipolito Yrigoyen 1916-22, 1928-30

Marcello Torcuato de Alvear 1922-28

Jose Felix Uriburu 1930-32

Augustin Justo 1932-38

Jose Maria Ortiz 1938-42

Ramon Castillo 1942-43

Background info

The period spanning from 1916 to 1930 in Argentina is known as the Radical Phase  , as it began with the election of the Radical Civic Union (UCR) candidate Hipólito Yrigoyen, ousting the long term conservative National Autonnous Party.

Yrigoyen's second term, which started in 1928, was lasted until 1930 when a  combo of forces including the great depression lead to a military coup that would intro a period of militarism and dictatorship that lasted until the 1980s.

Background Info

·         The Infamous Decade in Argentina is the name given to the period of time that started in 1930 with the coup d'état (a sudden decisive exercise of force in politics; especially: the violent overthrow or alteration of an existing government by a small group) against President Hipólito Yrigoyen by José Félix Uriburu.

This decade was marked by many small rural landowners leaving their towns since they had been ruined by the Great Depression, which in turn pushed the country towards import substitution industrialization (a trade and economic policy that advocates replacing foreign imports with domestic production) .

The poor economic results of the policy and popular discontent among the public led to another coup in 1943, which was the "Revolution of '43", by the Grupo de Oficiales Unidos , the nationalist faction of the Armed Forces, against acting president Ramón Castillo, which finally put an end to the Infamous Decade.

Uriburu

On September 6 1930, a military coup, forced Hipólito Yrigoyen from power, and replaced him with José Félix Uriburu. Support for the coup was strengthened by the Argentinian economy which had been in bad shape for quite a while now due to the depression,

The military coup began the period known as the "Infamous Decade", which was characterised by electoral fraud, persecution of the political opposition and pervasive government corruption, against the background of the global depression.During his brief term as president, Uriburu cracked down heavily on anarchists and other far-left groups, which resulted in nearly 2000 illegal executions of members of anarchist and communist groups. One of the most well-known and perhaps most symbolic of anarchism's decay in Argentina at the time was the execution of Severino Di Giovanni an Italian anarchist who immigrated to Argentina, who was captured in late January 1931 and executed on the first of February of the same year.

After becoming president through the coup, Uriburu attempted to create a constitutional reform that would include corporatism in the Argentinian Constitution.

Justo

As previously mentioned Uriburu attempted to create a constitutional reform that would include corporatism in the Argentinian Constitution. This move toward fascism was viewed negatively by those who were conservative and part of the coup and they turned their support to the more moderate conservative general Agustín P. Justo, who won the presidency in a 1932 election that was heavily fraudulent, and where many accusations of election fraud were made.

Justo initiated a policy of liberal economic changes that advanced mostly the nation's upper classes and permitted great political and industrial corruption at the expense of national growth. One of his most infamous decisions was the creation of the Roca-Runciman Treaty between Argentina and the United Kingdom, which benefitted the British economy and the wealthy beef producers of Argentina at the expense of national interest.

Ortiz

n the presidential elections of 1937, Jose Maria Ortiz was the official government candidate and won, though the opposition accused him of participating in fraud. Ortiz never denied those charges but once he took office he tried to make Argentine politics more open and truly democratic.

During World War II, Argentina maintained the same neutrality it had adopted during the first World War, which was advantageous for Great Britain. Although the USA attempted to push the country into the war, during the January 1942 Rio de Janeiro Conference, with the support of the British Argentina resisted. A few months later, in June 1942, Ortiz resigned because he was ill with diabetes and died a month later.

Castillo

Ramon Castillo was vice president at the time and replaced Ortiz

He began to work to launch the candidacy of Robustiano Patrón Costas, vice-president of the Senate and sugar entrepreneur, who had supported him in 1938

On 4 June 1943, the nationalist faction of the army, gathered around the Grupo de Oficiales Unidos (GOU, formed in March 1943) opposed both to corruption and to the Left, overthrew Castillo in a coup.

ECONOMIC DEPENDENCY & MAIN TRADING PARTNERS

Argentina

Economic Dependency: Exports Exports were key to the Argentine

reserves, however the country was not reliant on one sole crop

Wheat & beef were the primary exports but were not the only sources of income as the economy was modernizing and diversifying

 linseed & corn were also key export crops

Economic Dependency: Industries Industries that developed were logical

extensions of its agricultural sector: I.e. food processing, meat packing, flour milling & leather tanning

Argentina’s industry was largely domestic, thus there was limited foreign investment until the 1920s

Foreign Trade

foreign investment played a crucial role during the 1930s & was 50 % of the total capital investment in the Argentine industry

As Europe and America suffered, protectionist policies were implemented to keep their own farmers solvent

This lead to an imbalance of trade in Argentina – the value of cash crops fell 43%, accompanied by a 40% devaluation of the Argentine peso

When the economy hit rock bottom in 1933 the gov’t responded with polices not meant to change the economy but to bolster traditional areas of interest and income—livestock and agriculture

The gov’t established a number of agricultural regulatory boards that lobbied for protectionist policies for agriculture that included tariffs

Foreign Trade: Main Trading Partners

·The new gov’t also tried to hold on to the relationship with the UK to boost economic recovery --Argentina tilted towards the British and the allies during WW1

The result of this was the Roca-Runiciman Pact (1933): the pact placed restrictions on Argentina in order to restore positive trade relations with the UK -- the pact strengthened commercial ties

British markets for Argentine goods would be preserved if Argentina promised to give preference to British manufactured goods and protect British companies from nationalization

US firms started businesses in Argentina b/c it was difficult to export due to high tariffs

INDUSTRIES

Argentina

Domesticated Industries

Before the 1920s, Argentina had largely domesticated industries.

Food processing, meat packaging, flour milling and leather tanning were some of the industries that developed in Argentina.

Main Industries

The wheat and meat industries where two of the main industries in Argentina.

Linseed and corn were some other important industries in Argentina during the 1920s. However the linseed market collapsed during the 1930s and Argentina severely lessened its involvement in that sector.

Importance of Oil

After World War I, oil became a very important resource.

The Yirigoyen administration wanted to lessen its dependence on foreign oil.

On June 3, 1922 Yirigoyen created the Fiscal Petroleum Fields (YRP), a state run oil company to compete against foreign interests. Its first director was General Enrique Mosconi.

YRP

The YRP would source, produce, refine and sell petroleum.

The first YRP oil refinery was inaugurated in December 1925 in Ensenada, Buenos Aires, Argentina.   

The YRP had some influence on other oil companies. In May 1929, the YRP lowered the price of oil forcing other companies to do the same. This helped keep foreign gas prices competitive.

It was the first state-owned oil company created.

Class Structure

- In the 1880s Argentina began a period of modernization that brought social changes that threatened the traditional landowning creole elites- Immigrants created new businesses that challenged the traditional power base- In terms of class structure during the Great Depression, many people of the working class were relatively unphased as the depression had seemingly mild.

Class Structure

- the working class developed in terms of organizational strength and political importance - the entrepreneurial capitalist class was formed (industrial bourgeoisie)

-The Great Depression had a relatively mild effect on Argentina, although it did halt economic expansion ( contributing factors - industrial growth, foreign trade (traiffs made it difficult to establish trades overseas), etc) - unemployment rates never went below 10% -- working class did not have to suffer a great dea

CONCLUSION

Argentina