Industrial and commercial South America

The chief resources of Paraguay at present and for an indefinite future are pastoral pursuits, forestry, and agriculture.

Forestry

Quebracho. The exploitation of quebracho is an important source of wealth. On the estimated 27,000,000 acres of forest land in the country are valuable woods of many varieties, among which the quebracho is preëminent. The first factory in South America for the extraction of tannin from this wood was established in 1889 at Puerto Galileo in the Chaco. The Forestal Company, British owned, was a leader in the development of the industry in which one or more American companies have lately become interested. Large sums have been invested, $15,000,000 it is said by a single company. Most of the properties are located in the Chaco, which has great tracts of land distributed to individuals or companies, some of whom have never seen their holdings. One American company has 1,500,000 acres.

Unlike most other trees from which tannin is derived, the tannin is not in the bark, but it permeates the entire wood. Formerly the logs were exported, but this is now forbidden. The International Products Company has a mill at Puerto Pinasco on the west bank of the Paraguay above San Salvador, and 300 miles north of San Antonio. The wood is remarkably rich in tannin which runs 20 per cent. The wood must be cut and then ground to extract the substance, the refuse wood running the engines. One tree weighing a ton will produce 600 pounds of extract. By means of three rotary evaporators, the extract may be solidified so as to be packed in bags, 75-100 tons of the solid in 24 hours. The Company, owning enough wood to produce 450,000 tons, is equipped to supply 30,000 tons of the extract annually. The trees are hauled by oxen to a light railway which brings them to the port, the railway being extended as the felling of the trees goes farther inland. Twenty million pounds of extract were exported from Paraguay in 1919.

Other Wood. Several other trees have bark which is used for tannin, among them the curupay, said to have 28 per cent in the bark, which is used in Paraguay. This is one of the strongest woods in the world, like quebracho much wanted for railway ties. The urunday is a wood so durable that posts of it in damp ground have lasted 200 years. Other woods resemble the hickory, the English walnut, the soft pine, etc. The ivara-pitak is a fine all around timber, light, tough, and hard, an unusual combination. Lignum vitae (palo santo), almost as hard as quebracho, cedar, and bitter orange abound, the leaves of the latter used for essential oil, chiefly exported to France. The hard woods are useful for railways, for cabinet making, and fine furniture; also for firewood on account of the enormous price of coal. From the proximity of the forests to the coalless region of Argentina and its plains, mostly treeless or supporting light woods only, like eucalyptus and poplar, forestry is certain to have in Paraguay a speedy and extensive development, in spite of the fact that there is a great variety of trees growing in a small space, as 47 different kinds among 163 trees in a tract 100 yards square. However, in places in the Chaco the quebracho chiefly abounds.

Other woods found in the eastern forest are ibiraro, close grained and flexible, the best for wheels, which made of this wood last for years without tires, excellent also for boat and ship building; the caranday or black palm 30 feet high, used for telegraph poles and scaffolding; palo de rosa (rosewood), a mahogany used for cigar boxes; the tatum, good for clothes boxes, being obnoxious to insects; and many more, valuable but little known. Also there are fibre plants, ramie, jute, etc.

Yerba mate, although now to some extent cultivated, is chiefly a forestal product. Once known as Paraguay tea, it is a famous product of the country, and in some sections the most important.

The trees or shrubs grow wild in the forest to a height of 10-25 feet; from these the bright green leaves are gathered from which the tea is made. How to propagate the trees was for years a mystery, but it is now known that soaking the seed in hot water will promote germination. If planted in tiny wooden boxes with no bottom, 9 inches deep, the roots may be transplanted without injury. A tree comes into bearing in five years, but reaches full production only after 12 years. Some plantations have been established on the Alto Paraná, but the greater part of the mate comes from the virgin forest. The natural trees in the forest grow better if that is cleared of underbrush and of the larger trees. When full grown they can endure 5-6 cuttings a year without permanent harm.

The Industrial Paraguay, with a capital of $5,000,000, is said to export about 75 per cent of the total. This Company holding a property of 8400 square miles, was the first to undertake on a considerable scale the cultivation of yerba mate in plantations. Their largest is in the north at Nueva Germania on the River Acaray. Barthe and Company, with a property of 3000 square miles, has a plantation near Nacunday on the Paraná River with 1,400,000 trees producing, and 1,000,000 more immature. The plantations of 28,000 acres will soon supply 5,700,000 pounds a year. Mate sold in 1918 at 8-10 cents a pound. In that year cultivated trees produced 6,700,000 pounds, and the natural 17,200,000 pounds. Chatas, flat boats, carry the dried leaves down stream to river ports where they are taken by steamers to Asunción, Posadas, Corrientes, or Buenos Aires to be ground. The Industrial has two ports on the Paraná and one on the Acaray, with mills in Asunción, Corrientes, and Buenos Aires. La Matte Larangeira, a Brazilian Company, has some yerbales in North Paraguay, but more in Matto Grosso.

Ten to twelve million persons in South America drink mate, though tea and coffee are more fashionable in the large cities. Its use was spreading in Europe before the War, but few persons in the United States are acquainted with its virtues. Containing less tannin, it is more healthful than tea or coffee, is soothing to the nervous system, and beneficial to digestion unless taken to excess. When used instead of food it becomes injurious. It is much drunk on the plains of Argentina, counteracting the effects of an excessive meat diet. It may be made like tea, but in its native haunts, the powder is put into a gourd called a mate, boiling water is poured on, and after steeping the liquid is drunk with a bombilla, a tube ending in an oval ball, with small holes to admit the liquid, but supposed to keep out the yerba.

Agriculture

Tobacco, largely cultivated in Paraguay, is the most important agricultural product with the first place in foreign trade. Almost every one smokes large cigars, even women and girls. The leaves are divided into seven classes: the first class called pito containing 2¹⁄₂ per cent of nicotine, the seventh class 7 per cent. The first four classes are used in Europe as fillers, the last three in Argentina as wrappers, having larger, stronger leaves. The tobacco is mainly from Havana seed introduced in 1900. The leaves are dried and fermented, and made into various types of cigars, or shipped in crude form to Europe, formerly the most to Germany, later to France and Spain. Of one crop of 7000 tons 4000 went to Europe, there sold under different names. In Argentina and Uruguay the cigars and cigarettes are popular under the name of Paraguay.

Small Farm Products. Agriculture is naturally important for home consumption, but aside from tobacco and oranges the exports are slight. As almost everything will grow in the rich soil, with increasing population agriculture will become a great source of wealth. Mandioca and corn are staple for the small farmer, the latter of two varieties, a hard white and a soft yellow, the former of especial excellence both for nutriment, and withstanding the ravages of the grain weevil. Three crops a year may be raised from one variety of sweet corn. White potatoes flourish, though not so well as sweet, no great hardship. Beans, peanuts, millet, and various European vegetables are raised for home consumption. Wheat is experimental. Coffee does fairly but is often injured by frost; alfalfa not so well as in Argentina. Rotation of crops is unknown and few implements are employed. Life is so easy that the small farmer is rather shiftless, and practically nothing is done on a large scale.

Oranges, grown by every one, are the most noteworthy of the many varieties of fruit produced in Paraguay, but high freight rates make them less profitable than they should be. They grow freely and are exported in large numbers to Argentina and Uruguay, 200,000,000 in 1919; they have been called the best in the world. However, they do not keep well, and being carelessly packed many are spoiled in transportation. The introduction of hardier varieties is talked of.

Sugar finds excellent soil but is liable to suffer from frost or drought. It is grown mostly in the north near the rivers, railways, and factories. There are at least seven mills, two at Villa Hayes in the Chaco, one at Concepción. Some small mills make brown sugar and caña; 387,500 tons were produced in 1918. About 20,000 acres were cultivated in 1919, but some sugar is imported. The methods have been crude but are improving.

Cotton. Good cotton land exists especially in the southwest, and in the Chaco. An indigenous tree bears 10-12 years. The staple is of good length and quality. Not enough is produced to supply the home market, but its culture is increasing. A Belgian obtained annually 1000 pounds an acre for six years. At present the seed is not utilized.

Rice is grown on low ground between the Paraguay River and the railway. Two crops a year may be raised giving 2000 pounds to the acre, a quantity which might be nearly doubled. The coconut palm, peanut, and castor bean flourish.

The Stock Industry

Cattle raising is beginning to be very profitable in Paraguay as in the neighboring countries; and here there is a chance for the small capitalist. Formerly some live cattle were exported, but ten times as many hides; also dried meat from saladeros. During the Great War operations were carried on by three American companies. A plant at San Salvador, nearly three hundred miles above Asunción, for slaughtering cattle and putting up canned meat, was conducted by Morris; another by Swift 5 miles above the Capital, where over 900,000 six-pound cans of meat were put up in 1918. But with the conclusion of the War the demand fell off so rapidly that both plants are closed and dismantled.

A third establishment, however, at San Antonio, 15 miles below the Capital, is actively engaged and about to increase its output. The International Products Company has a thoroughly modern equipment, a real frigorifico, for the export of frozen meat, with a capacity of 175,000 head of cattle a year, to be shipped to Buenos Aires and Europe. The cattle are in part purchased from individual farmers, but the Company has a large property where its own production is increasing. Nearly 300 leagues of land are owned back of Puerto Pinasco in the Chaco: one half for cattle grazing and half quebracho lands. They have 600 miles of barbed wire and a herd of 70,000 with some blooded stock. The western section is used for young cattle which are moved east the third year for fattening. The Company besides tugs and lighters for the transport of the cattle has two refrigerating steamers to carry the frozen meat to Buenos Aires. The hides increase the value of the production.

The native cattle are far better than the Texas Longhorn, but not equal to the blooded stock of Argentina. They weigh 850-1000 pounds and afford excellent beef. The Argentine is heavier but called coarser than that of the United States. The Paraguay stock is now being improved especially with Herefords. A 50 per cent increase of the herd is general. It is estimated that the number of cattle in Paraguay is now 5,000,000, and that 40,000,000 may be easily supported. The native grasses are good, and the jaraguá from Brazil is used. Stock may be bought at $15 a head, perhaps less in large numbers, affording the best possible opportunity for the small capitalist. The dairy industry is slight, the native cows being poor milkers.

The Chaco land near the River is liable to floods but few cattle are lost as there is usually time to drive them back 20-30 miles to the second and higher zone beyond the danger. It has been said that cattle covered with ticks east of the Paraguay on crossing into the Chaco soon become free of them. A French company in 1919 had 150,000 head of cattle with over 500 Hereford bulls, a breeding stock of more than 100,000. One thousand miles of pasture were enclosed. The Company makes use of 130 telephones, has shops, a tannery, etc. Besides Herefords there are Durhams and Polled Angus. Two hundred men are in charge of the stock. The natives make good cowboys, better I was told than some Americans who went down from here a few years ago.

Other Stock. As to other stock, horses are comparatively few, not one tenth of the number of cattle, hardly enough for home use. They are liable to disease and do not thrive in the Chaco, better east of the River. Mules serve well though smaller than in the United States. Horses are outnumbered by sheep, which are valuable for meat, though mutton is not favored by the natives. The climate is obviously warm for sheep and their fleece is light. New stock must be introduced. Hogs and goats thrive better.

Mining

Iron, 34 per cent pure, was produced at Ibicuy, 1863-69. Indications of it are widespread near the Alto Paraná, and near Caapacá, Quiquió, and Paraguarí.

Manganese runs 63 per cent in beds of 60,000,000 tons. Copper exists near Encarnación and Caapacá. There are large beds of good stone, talc, graphite, kaolin. Probably petroleum will be found in the Chaco.

Manufacturing

Manufacturing is non-existent, aside from the quebracho and sugar mills, save for a few necessities of life, as by many regarded. Beer comes first with the largest investment of capital, flour mills next, then boots and shoes, furniture, brick, tiles, matches, hard and soft drinks, soap, vegetable oils, etc. The opportunities are vast for the development of electric power. Labor in general is fair and loyal, undeveloped, but with good intelligence. The men lack steadiness and a feeling of responsibility. There has been less labor trouble than in Argentina and Chile, but men from Argentina have been attempting to unionize them. Strikes are common. Wages are from 50 cents to $3.00 a day, the lower with quarters. At the frigorificos $1.00 is paid with free rent, for ten hours’ daily work.

Investments

Perhaps no other country of South America presents to the small farmer and willing worker, with or without small capital, openings more favorable than Paraguay, if equal to these. Some stock raising for local use or for the packing houses might gradually be added to agriculture. The dairy industry ought to be profitable. Fruit raising for export or for canning is undoubtedly of excellent promise; a large proposition of this nature is now being considered by an American corporation. Saw mills and lumbering would give good returns. Small industries, well managed, might afford fair earnings. For quebracho, yerba mate, or large scale stock raising, much capital is required, yet a modest sum here might go farther for stock than in any other country. Thousands of acres of land suited to agriculture are available for colonists in accordance with their liberal colonization and homestead laws. The price goes from $1 to $13 an acre. Grazing land costs $2-$5, agricultural $5-$20, Chaco land $1-$2.50 an acre. Special arrangements are made for and with a party of colonists as in all of the countries.