IRON and STEEL PRODUCTION in ARGENTINA C.1920-1952
Total Page：16
File Type：pdf, Size：1020Kb
IRON AND STEEL PRODUCTION IN ARGENTINA c.1920-1952: ATTEMPTS AT ESTABLISHING A STRATEGIC INDUSTRY Submitted by Bernardo Duggan for the degree of Doctor of Philosophy in the Faculty of Economics, London School of Economics and Political Science, University of London, March 1998 UMI Number: U122856 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U122856 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 7/04-"7 v- THESIS ABSTRACT This thesis examines the political economy of the initial development of the Argentine iron and steel industry between circa 1920 and 1952. It analyses the reasons for the failure of those initiatives and shows that the main impetus to establish the industry was provided by the Second World War, not the Great Depression. The thesis accounts for the adverse impact of domestic factors such as the predominance of military strategic demands over business considerations, inadequate national supplies of raw materials, output bottlenecks, demand constraints and the politics of the period which frustrated policy continuity. The unfavourable effects of the international conjuncture are also assessed. These include the role of the International Steel Cartel in inhibiting the growth of domestic iron and steel production through a web of controls prior to 1939, and wartime constraints and the US embargo which limited access to essential capital goods and technology thereby frustrating positive incentives for the development of heavy industry. For most of the period, Argentina was one of the few ’open’ markets for iron and steel products. The depth of the market and its ability to sustain domestic production is assessed through three case-product studies: rails, construction materials and rural implements. The research shows that demand was associated with traditional economic sectors. Organisational structures also frustrated development. The thesis proves that the history of the sector was characterised by organisational instability: a small number of ephemeral firms specialised in the production of a small number of items. Attempts to foster efficiency through large- scale integrated industrialisation involving State and private capital in a mixed corporation failed because the project was tailored to security rather than market requirements. CONTENTS List of Tables 4 List of Figures 5 List of Maps 5 List of Abbreviations 6 Acknowledgements 8 Dedication 9 Introduction 10 Chapter 1 Industrialisation, heavy industry and development: general and Argentine debates and historiography 22 Chapter 2 Argentine attempts to develop steelmaking: the historical context 54 Chapter 3 The role of the State, private firms and foreign interests in heavy industry 110 Chapter 4 The market for iron and steel products 150 Chapter 5 The supply of national and foreign raw materials: input constraints and the development of an integrated industry 201 Chapter 6 The availability of technology and the international setting 242 Chapter 7 Economics and military ideology: costs, prices and the gap between planning and policy outcome 283 Conclusions 318 Sources and bibliography 328 3 LIST OF TABLES Table 1.1 Argentine output of steel ingots and rolled steel, 1937-1950 49 Table 2.1 Apparent consumption and production of crude steel in the major Continental producing-exporting countries in 1929 61 Table 2.2 Percentage distribution of Argentine GDP at factor cost, 1920-1949 78 Table 2.3 Output value of some major industries, 1911-1930 85 Table 2.4 Exports of non-traditional goods, 1934-1947 96 Table 4.1 Iron and steel consumption, 1925-1949 150 Table 4.2 Distribution of the active population among economic activities 154 Table 4.3 Gross per capita income, 1920-1949 156 Table 4.4 Distribution of the national income in 1950 157 Table 4.5 Structure of the gross domestic product, 1920-1949 159 Table 4.6 Value of industrial production per sector, 1930-1949 161 Table 4.7 Annual average estimated steel consumption by groups of products 164 Table 4.8 Consumption of steel bars and shapes and of cement, 1925-1949 165 Table 4.9 Iron and steel consumption, imports and production, 1925-1949 167 Table 4.10 Domestic output of iron and steel products for selected years 169 Table 4.11 The Argentine railways, 1900-1950 179 Table 4.12 Rail imports and the market share of their sources, 1921-1950 180 Table 4.13 Output value of the construction industry, 1 July 1934 - 30 June 1935 186 Table 4.14 Building activity in Buenos Aires and imports of girders and pipes, 1921-1950 186 Table 4.15 Production of structural materials and cast-iron pipes 189 Table 4.16 Imports of windmills and ploughs, 1921-1950 194 Table 4.17 Production of windmills and ploughs 194 Table 5.1 Argentine trade in scrap and pig iron imports, 1921-1952 204 Table 5.2 Pig iron imports: share of leading sources, 1921-1952 210 Table 5.3 Pig iron consumption, 1945-1952 216 Table 5.4 Coal transported from Rio Turbio to Buenos Aires, 1951-1958 224 4 Table 5.5 Iron ore production, 1944-1955 228 Table 5.6 Coal consumption, 1944-1958 230 Table 5.7 Estimated annual raw material requirements of SOMISA 236 Table 7.1 Consumption, production and imports of crude steel in the principal Latin American economies in 1947 283 Table 7.2 Estimated breakdown of iron and steel production costs in 1950 284 Table 7.3 The cost of a one-ton steel ingot in Argentina and the USA in 1925 286 Table 7.4 Export prices for selected steel commodities per long ton, FOB Antwerp 290 Table 7.5 Proposals for investment of capital in SOMISA 296 Table 7.6 Proposed expenses of SOMISA 300 Table 7.7 Proposed sales of SOMISA 301 Table 7.8 Proposed costs of production per ton at SOMISA 302 Table 7.9 Revised calculations of the costs of production at SOMISA 302 Table 7.10 Average nominal prices of scrap per ton in Buenos Aires 306 Table 7.11 Consumption of finished steel products in Latin America in 1947 311 Table 7.12 Production programme for SOMISA 312 LIST OF FIGURES Figure 1.1 The blast furnace 32 Figure 1.2 The Siemens-Martin open-hearth furnace 33 Figure 1.3 The rolling mill and the production of finished goods 35 LIST OF MAPS Map 2.1 The West European coal and iron basin 55 Map 2.2 The Argentine Republic, c. 1950 77 Map 3.1 Steel producers in the Buenos Aires metropolitan area 112 Map 3.2 Steel producers in the Argentine littoral 112 Map 5.1 Domestic sources of raw materials 221 5 LIST OF ABBREVIATIONS ACINDAR Industria Argentina de Aceros S.A. AHMSA Altos Homos de Mexico S.A. AHZ Establecimiento Altos Homos Zapla ARBED Acieries Reunies de Burbach-Eich-Dudelange ARMCO American Rolling Mill Company BCRA Banco Central de la Republica Argentina BHP Broken Hill Proprietary Company BLPES British Library of Political and Economic Science DE Desarrollo Economico DGCSM Direccion General de Combustibles Solidos Minerales DGFM Direccion General de Fabricaciones Militares DOT Board of Trade, Department of Overseas Trade ECA Economic Cooperation Administration ECSC European Coal and Steel Community EIA Entente Internationale de l’Acier FO Foreign Office GDP Gross Domestic Product GOU Grupo de Oficiales Unidos IAPI Instituto Argentino para la Promotion del Intercambio INDAC Industria de Aceros Chilenos IRMA International Rail Makers’ Association ISC International Steel Cartel IWECO International Wire Export Company JLAS Journal of Latin American Studies PRO Public Records Office PSA Plan Siderurgico Argentino 6 RRP The Review of the River Plate SOMISA Sociedad Mixta Siderurgia Argentina SRA Sociedad Rural Argentina TAMET Sociedad Anonima Talleres Metalurgicos San Martin TAMET UCR Union Civica Radical UD Union Democratica UN, ECAFE United Nations, Economic Commission for Asia and the Far East UN, ECE United Nations, Economic Commissionm for Europe UN, ECLA United Nations, Economic Commission for Latin America US / USA United States / United States of America USSR Union of Soviet Socialist Republics YPF Yacimientos Petroliferos Fiscales 7 ACKNOWLEDGEMENTS In the many years that I have worked on this thesis, I have become indebted to people in both the United Kingdom and Argentina. Foremost are Dr. Colin Lewis, whose excellent supervision and constant encouragement remained essential, and the administrative staff at the Department of Economic History at the London School of Economics and Political Science, especially Linda Sampson. I am also grateful to Raul Fernandez and to Elizabeth Ogbom, assistant archivist at the Bank of England Archive. In Buenos Aires, I am particularly grateful to the Licenciada Hilda Ruffa de Pastor, head librarian of the Biblioteca Nacional Militar del Circulo Militar, for her attentive and efficient help; Marta Gutierrez, the Jefa de la Division Bibliotecas of the Banco Central de la Republica Argentina, for allowing me access to the priceless collection of the Biblioteca Tomquist; and Jose Alfredo Martinez de Hoz, former Ministro de Economia, without whose assistance access to ACINDAR (however limited) would have been impossible. I must also thank the staff of the Biblioteca Coronal Luciano E. Romanutti at the Centro de Informacion del Instituto Argentino de Siderurgia, the late Leandro Gutierrez of the PEHESA group at CISEA, and General (retired) Antonino Fichera of the Escuela de Defensa Nacional del Ministerio de Defensa.