Railway Nationalisation in Argentina

In 1948, during President Peron’s first term of office, the seven British-owned and three French-owned railway companies then operating in Argentina, were purchased by the state. These companies, together with those that were already state-owned, where grouped, according to their track gauge and locality, into a total of six state-owned companies which would later become divisions of the state-owned holding company Ferrocarriles Argentinos

Background

During the later half of the nineteenth century British and French-owned railway companies had played an important role in the economic development of Argentina, and between 1856 and 1914 the railway network in Argentina grew to be the largest in Latin America. The foreign investment provided by these companies had helped to transform Argentina from a relatively underdeveloped, rural country, with many isolated communities, into one which was becoming an increasingly prosperous agricultural producer and exporter.

The foreign-owned railway companies had developed under the protection of the Argentine ruling elite, who benefited more than most from the country’s increasing prosperity, and were governed from London or Paris for the benefit of their shareholders.

The rail networks of the various companies generally radiated inland from the major ports of Buenos Aires and Rosario and where primarily designed to speed the export of agricultural products from the provinces to European markets. The lack of interlinking between the many radial lines meant that the integration of the country’s interior was probably slower than it would have been had domestic needs been a priority.

For the duration of the World War II it had not been possible to import railway equipment or materials which meant that there was an urgent need for track, locomotive and rolling stock renewal by the time nationalisation took place in 1948. Also the railways were beginning to face stiff competition from road transport as improvements in the national road network were made. By the time the railways were nationalised in 1948, during the first term of office of President Peron, the growth in economic nationalism in the country had reached a point where, for many Argentines in search of self-determination, the foreign-owned railways had become symbols of the control of the country’s economy by foreign powers.

Details

Between 1936 and 1939 the once British-owned metre gauge Córdoba Central, Argentine Transandine and Central of Chubut had already been nationalised. As from 1 March 1948 the remaining seven British-owned railway companies in Argentina also became the property of the government (see Table 1). These were the four broad gauge companies: Buenos Aires Great Southern, Central Argentine, Buenos and Pacific and the Buenos Aires Western Railway; the two standard gauge companies: Entre Ríos and Argentine North Eastern; and the Buenos Aires Midland Railway the only metre gauge company.

The official transfer of ownership on 1 March of some 24,458 km of British-owned railways (57% of the total railway network) to the Argentine government took place amidst widespread celebrations including a mass demonstration of support in Plaza Británica in front of Retiro railway terminus in Buenos Aires.

British shareholders were compensated with the rescision of their US$500 million debt to the Central Bank of Argentina and US$100 million, cash. The cash figure proved controversial, as it had not previously been reported during the negotiations. Pressed on the issue, President Peron explained that the premium was for "sentimental reasons." [Crawley, Eduardo. A House Divided: Argentina, 1880-1980. London: St. Martin's Press, 1985.]

Later in 1948 the three French-owned railway companies were also nationalised: the broad gauge Rosario y Puerto Belgrano and the metre gauge Compañía General de Buenos Aires and Provincial de Santa Fe.

These ten foreign-owned companies, along with those previously nationalised, were grouped together, according to their track gauge and locality, into the six state-owned companies Sarmiento, Mitre, Urquiza, San Martin, Belgrano and Roca which were named after distinguished Argentina presidents and national heroes. Later these would become divisions of the state-owned holding company Ferrocarriles Argentinos.

Aftermath

Argentines saw railway nationalisation as a major step towards the economic independence of their country which had for so long been under the influence of foreign capital. Nationalisation of the railways, the central bank, the telephone system and the docks were part of Peron’s economic recovery scheme for postwar Argentina and had formed part of the first Five Year Plan, announced in October 1946. Later in mass rallies he would refer to railway nationalisation as a victory over foreign imperialism. At the time there was little local opposition although later it became apparent that, far from stimulating the national economy, nationalisation of the railways together with other foreign companies, actually contributed to the economic crises that Argentina suffered from the 1950s onwards.

References

*D.S.Purdom, British Steam on the Pampas, Mechanical Engineering Publications Ltd, London, 1977.

*Winthrop R. Wright, British-Owned Railways in Argentina – Their Effect on Economic Nationalism, 1854-1948, Latin American Monograph No. 34, Institute of Latin American Studies, Univ. of Texas Press, London, 1974.

ee also

*Railway Privatisation in Argentina
*Rail transport in Argentina