ARGENTINE POLITICS AND ECONOMY 253
so-called Conquest of the Desert—southward
against native peoples of the pampa in 1879–
- This conquest added vast new areas to the
province of Buenos Aires and to the national public
domain. The campaign, devastating to the region’s
indigenous communities, had created an opportu-
nity to implement a democratic land policy directed
toward the creation of an Argentine small-farmer
class. Instead, the Roca administration sold off the
area in huge tracts for nominal prices to army of-
fi cers, politicians, and foreign capitalists.
Coming at a time of steadily mounting Euro-
pean demand for Argentine meat and wheat, the
Conquest of the Desert triggered an orgy of land
speculation that drove land prices ever higher and
caused a prodigious expansion of cattle raising
and agriculture. This expansion took place under
the sign of the latifundio. Few of the millions of
Italian and Spanish immigrants who entered Ar-
gentina in this period realized the common dream
of becoming independent small landowners. Al-
though some immigrant agricultural colonies were
founded in the provinces of Santa Fe and Entre Ríos
in the 1870s and 1880s, by the mid-1890s, with
wheat prices now declining, there was a shift from
small-scale farming to extensive tenant farming.
The traditional unwillingness of the estancieros
to sell land forced the majority of would-be inde-
pendent farmers to become ranch hands or tenant
farmers, whose hold on the land was very preca r-
ious. Because leases were usually limited to a few
years, these immigrants broke the virgin soil, re-
placed the tough pampa grass with the alfalfa pas-
turage needed to fatten cattle, and produced the fi rst
wheat harvests but then had to move on, leaving
the landowner in possession of all improvements.
As a result, the great majority of new ar rivals
settled in Buenos Aires, where the rise of meat-
salting and meat-packing plants, railroads, public
utilities, and many small factories created a grow-
ing demand for labor. True, the immigrant workers
received very low wages, worked long hours, and
crowded with their families into one-room apart-
ments in wretched slums. But in the city barrio they
lived among their own people, free from the loneli-
ness of the pampa and the arbitrary rule of great
landowners, and had some opportunity of rising
in the economic and social scale. As a result, the
population of Buenos Aires shot up from 500,000
in 1889 to 1,244,000 in 1909. The great city,
which held the greater portion of the nation’s
wealth, population, and culture, grew at the ex-
pense of the interior—particularly the northwest—
which was impoverished, stagnant, and thinly
peo pled. Argentina, to use a familiar metaphor,
became a giant head set on a dwarf body.
Foreign capital and management played a de-
cisive role in the expansion of the Argentine econ-
omy in this period. The creole elite obtained vast
profi ts from the rise in the price of their land and
the increasing volume of exports but showed little
interest in plowing those gains into industry or the
construction of the infrastructure required by the
export economy, preferring a lavish and leisurely
lifestyle over entrepreneurial activity. Just as they
left to English and Irish managers the task of tend-
ing their estates, so they left to English capital the
fi nancing of meat-packing plants, railroads, public
utilities, and docks and other facilities. As a result,
most of these resources remained in British hands.
Typical of the oligarchy’s policy of surrender to for-
eign interests was the decision of Congress in 1889
to sell the state-owned Ferrocarril Oeste, the most
profi table and best-run railroad in Argentina, to
a British company. Service on a growing foreign
debt claimed an increasingly larger portion of the
government’s receipts.
Meanwhile, imports of iron, coal, machin-
ery, and consumer goods grew much faster than
exports. Combined with the unfavorable price ra-
tio of raw materials to fi nished goods, the result
was an unfavorable balance of trade and a steady
drain of gold. New loans with burdensome terms
brought temporary relief but aggravated the long-
range problem. The disappearance of gold and the
government’s determination to keep the boom go-
ing at all costs led to the issue of great quantities of
unbacked paper currency and a massive infl ation.
The great landowners did not mind, for they
were paid for their exports in French francs and
English pounds, which they could convert into
cheap Argentine pesos for the payment of local
costs; besides, infl ation caused the price of their
lands to rise. The sacrifi cial victims of the infl ation