THE MEAT BOUNTY IN THE ARGENTINE REPUBLIC.

Otago Daily Times, Issue 8495, 16 May 1889, Page 3

THE MEAT BOUNTY IN THE ARGENTINE REPUBLIC.

PARTICULARS OF THE SCHEME,

Last year the Congress of the Argentine Republic gave its sanction to a law establishing a bounty upon meat exported from Buenos Ayres, and in February of the current year a decree of the Government brought the law into operation. No excuse is required for publishing the more important details of the scheme, which will interest all who are anxious to see a successful exportation of frozen meat from these colonies. There is a feeling that if Australia has auy competition to fear, it will come from South America, and especially from that enterprising state which pledges itself to bounties, and makes the most desperate efforts to secure at any cost a good position in the London market. The meat bounty, however, can only be described as an experiment, limited necessarily in its range to a few companies. The following is a summary of the law, the more important articles being quoted verbatim from the text published in the Buenos Ayres Standard:—

"The executive is authorised to grant an annual guarantee of 5 per cent, for 10 years on the capital of companies formed for tha purpose of exporting beef, either in a fresh state or preserved by processes not injurious to health. The total capital on which such bounty may be paid is hereby limited to eight millions of national dollars currency, and no larger amount than one million dollars, nor less than five hundred thousand dollars, can be guaranteed for a single company.'' < .

After fixing the limit, the law goes on to specify that the subsidy shall be divided between four districts—Buenos Ayres, Santa Fe, Entre Rios, and Corrientes. Companies which desire to avail themselves of the subsidy npply to the Government, the money being distributed on the principle of "first come first served." If a number of applications happen to bear the same date, it is provided that the preference is to be deciiled by lot. Article 4of the law reads :—

"No guarantee will be granted until the executive shall first have approved the estimates for the installation aud materials of the company, and the amount of capital with which it proposes to work; and all this must be set forth in the deed of agreement between the state and the company."

"Article s.—Guaranteed companies inusfc reserve at least 20 per .cent, of their capital for subscription in the Republic." "Article 6.—They shall be likewise bound (1) to have in the Republic a board of directors, the members of which reside in the country, and hold a recognised social, commercial, or industrial position; (2) to keep their books and accounts in Spanish; (3) to furnish the executive with all the data and information it may ask for, and in conformity with whatever rules may be established for the' better enforcement of this law."

Next we find that in terms of the guarantee a minimum weight of beef must be yearly exported—

"Article 7.—The executive shall determine, when drawing up said rules, and according to circumstances and the general state of the industry on which the guarantee is given, the miuimum weight of beef that must be exported yearly in relation to the guaranteed capital of each company."

The succeeding article is principally of iutnrest as showing the importance which is attached in the Argentine Republic to the profitable disposal of the hides, horns, tallow, bones, &c. J?or this the bounty law gives direct eucouragement:

. "Article B—The calculation of the profits for the purpose of guarantee shall include the working of all branches of the business, such as hides, bones, horns, ash, tallow, extract, and all other uses whatsoever to which the animal can be turned. The companies must lay before the executive a detailed-account of their working during each past year, to enable the guarantee to be calculated."

After provision is made for the appointment of inspectors and for the enforcement of sanitary bye-laws, we come to an important article, according to which the dividends of. the companies are virtually limited, and the surplus, if there should be any, goes to reimburse the Government for Mis guarantee:

" Article 13.— When i,he net profits exceed 5 pur cent, the overplus shall be devoted to the repayment, with intcre-t, of the advances made by the Government in the shape of guarantee; but those companies that may be established during the first year in which this present law is in fotce shall by exempted from this provision for a period of three, years."

Among the spt-oiiil privileges granted to the guaranteed companies tbechiuf isexemption from taxation, while at the same time they are allowed to cancel their contract, for the export of beef upon repaying the money which they rna,y have recftivsd from the Government. It is to be -particularly noticed that the cost of introducing til*! bounty law is to be met by aUuuating'-thu .public lands of the state. Article 16 runs that " the cost of putting this lav/ in force shall b« defrayed by the sale oi public lauds."

Such is a fair summary of the liv.v as it was paused by, the' Legislature.■ It wilj. be soen that certain companies are asked to enter into a contract for the.->export of beef, and that tho Government, on the other hand, guarantees interest at tho rate of 5 per cent, on a total capital of 8,000,000ilo), which is to be expended in different provinces. By way of further illustration, it is only necessary to extract two articles from the vice-president's decree bringing tho law into operation. With the exception of those points relating to the guarantee, the other parts of the document are concerned the detailed working of the act, such as the appointment and powers of the inspector.

'•Article 9. —Tho guaraniee extends over the capital invested in the establishment, the cost of working, the salaries of the staff, and the ready capital employed by the company,aud is limiie.il to a maximum of 5 per cent. p«r annum, the total sum of which mu^t not exceed the amount aligned to each company."

" Article 11.—Should the looses sustained by a company atlftot its capital, Government shall be at liberty to demand all data and details, with a view to aseeriain the cause, and in the casd of Raid cause biting bad management, a committee shall be appointed to make all requisite reforms. In the even!; of continued bad, management the Government shall be at liberty to suspend the guarantee. It is understood that all reductions in tho capital shall entail a corresponding reduction ir, the guarantee, which must never exceed 5 pec cent."

It will be seen that in this interpretation of the law the Government undertakes to reform bad management on the part of the companies. It can easily be understood that this law must be rapidly taken advantage of. Thus we learn from the Buenos Ayres Standard that one firm applied immediately for a guarantee upon the full capital of 1.000.000dbl :— " The ink was not yet dry on the Ministerial decree when Messrs William Meiggs and Co sent in an application to Dr Pacheco beting to he incorporated under the law with a capital of 1,000,000d01. The applicants intend starling a freezing and preserving meat factory at the Saladero, Colon, in the province of Entre Rios. Messrs Meiggs and Co. purpose extending the Saladero business to all branches of meat preserving, and have made the following estimates of capital:—

„, , .«.»,■■ D°l- Gold. Saladero, with it3 three leagues of land... 400,000 Freezing and machinery necessary to enlarge preserving factory ... ... 150,000 Working capital ... ... ... 450,000 1,000,000 Other companies will, of course, follow. It seems to be expected in Buenos Ayres that the Government will soon be compelled to give guarantees far beyond what is anticipated. Opposition, however, is manifesting itself, and the opponents of the bounty system take two grounds. The first is the argument that a bounty is in itself bad; the second is that Argentine beef and mutton are unsuitable for the London market, and that nothing will make them suitable except a genuine improvement in the quality. Two extracts from the Standard on this point are highly interesting. " The promulgation of the meat bounty law is now the main topic of conversation in bucolic circles, and the estancieros wear quite a rumpsteak, sirloin, or ox-tail soup appearance, as they expect great things from the new law. Bounties on beef, shipping, or anything else have never yet worked well anywhere, nor ever will. I Besides, there is very little beef fit for export' here. One enterprising company is already iu the field under the new law, and has sent 50 live steers and 100 frozen to the markets of Europe—to France, we believe—as the Gauls are no judges of meat, and Argentine beef has a chance of going down there." Again we read: — "Aletter from Pau,in the Prensa of Sunday last, won't put the Rural Society in wild spirits, or improve their appetites for roast beef. The writer says that the live River Plate cattle sent to France and Spain fetched wretched prices, and that the experiment is a dead failure. We have always maintained that there is no fat beef in this country fit for export, dead or alive. When they won't eat it in France, what chance is thero for it in England? The bounty law can't change European palates, and will only put public money into the pockets of a few axporters, without doing the estanciero class one iota of good." There is evidently no cause for Australia and New Zealand to despair. The quality of the meat sent from the colonies is undeniable, and is sold at a higher price than anything from the Argentine Republic. And as loug as this is the case, our growers need not be disheartened by the imposition of a bounty, which must be kept within moderate limits, or it will strain the finances of the Government at Buenos Ayres. The Argentine Republic is enterprising, but it is, market results that will tell.—Argns.