Argentina in the 1930s: Politics, Economy, and the Roca-Runciman Pact
New Political Actors in 1930s Argentina
New political actors emerged in the 1930s, including the Armed Forces and the Catholic Church. The Constitution defined the Armed Forces’ role as defending the country from foreign aggression and supporting elected officials. However, in the 1930s, they controlled operations, appointments, and promotions. This sector believed democracy had led to anarchy and a crisis of national values, viewing the army as an institution to restore order. The Church saw military power as the solution to the perceived evils of capitalism, liberal democracy, and socialism. Key objectives for the Church included maintaining laws against divorce and implementing religious education. Catholic Action (1928) became a lobby for the clergy, promoting anti-liberalism and nationalism.
The Economic Crisis and Responses
The economic crisis significantly impacted Argentina’s relationship with the outside world. Falling export prices forced a reduction in imports and affected the government’s tax capacity. The agricultural sector suffered, leading to reduced growth, lower export values, and decreased state investment. The government responded by establishing import permits and controlling foreign exchange. This involved setting different exchange rates for various goods. “Regulatory boards” were created to protect sectors in crisis, especially those linked to exports. The central bank was established to regulate the money supply and credit. A public works policy aimed at industrial development was also implemented.
The Roca-Runciman Pact
The Roca-Runciman Pact, signed between Britain and Argentina in 1933, was a response to the global crisis. Britain’s 1932 system favored imports from Commonwealth countries, reducing meat purchases from Argentina. The British also sought to regain market share lost to the U.S. The Argentine government sent a mission to London, led by Vice President Julio Roca. Negotiations with British Trade Minister Walter Runciman led to the controversial agreement, which faced public opposition and debate among historians and economists.
The agreement’s features included maintaining meat exports and increasing local producers’ participation in trade. While the first goal was achieved, the second was not. The British secured currency to meet payments, a commitment not to reduce rail fares, duty-free coal, and reduced rates for other British goods. Questioning the agreement in mid-1935, Senator Lisandro de la Torre denounced the “Roca-Runciman pact” for fraud and tax evasion by Anglo-British meatpacking companies. Evidence implicated ministers of President Justo, Pinedo, and Duha, for preferential treatment, allowing these companies to pay virtually no taxes and avoid inspections.
Diversification and Expansion
Diversification and expansion of local agricultural sectors led to the formation of economic groups like the Bunge and Born consortium, which covered diverse activities. This expansion was aided by stable real wages and labor availability due to internal migration. The State favored domestic industry through public works programs, creating incentives for local production. Import substitution varied by sector. The textile sector grew, while others were less efficient due to a lack of inputs and machinery. The expansion was limited by the technological design of new factories.
The Pinedo Plan
The Pinedo Plan was the first document to consider changing the country’s economic direction. It promoted state intervention in the economy, industrialization, and specialization in domestic raw materials. It also encouraged trade with neighboring countries. The plan aimed to diversify foreign markets and increase economic ties with the U.S. The plan failed due to the political illegitimacy of the regime. State action was seen as the only alternative, moving towards greater interventionism, where the state not only regulates the economy but also plans and directs investment in key areas.