Argentina Buys Out British

Hawke's Bay Herald-Tribune, Volume 81, Issue 31, 30 October 1937, Page 18

Argentina Buys Out British

SANTIAGO. — British ' connection with the Transandin'e Tailway , tmiting Chile and Argentina ceasea to exist with the approval o.£ .the agreement botween the company. operating the Argentine section and the; Federal Government in Buenos Aires. The company has aceepted the Government ofter of £750,000, 'of which 10 per cent will be pa'id in cash and the remainder in 4 per cent bonds providing amortization at 1 per cent. Control of the London .company operating the Chilean section.. has already been acquired by the Chilean: Government, which apperates the , systenx through its State Railroad Administration. ■ The Argentine Government '3 purchase .Tepresents the. ' triumph of .Chilean diplomatie poli'cy, which ever since the economic breakdown of the railroad seven years ago Jias insistod that it should be ruii by the two.transandean governments iu the greater cause of Pan-Amerieanism. Chile held that it was impossible for this international railroad to be a success while it remained a business venture of two foreign companies,. • The Argentine Government has also asked Congress to authorize the expenditure of 5,614,489 pesos on tho reconstruction of that part of the Argentine system which was destroyed by Mondoza xiver floods threo years ago. Since then passenger traffic has been sustained with omnibus connections. Even before the flood disaster, howevcr, the railway had become unprofitable.'owing to the tariff war between the two countries. The Argentine Government ordered the line to be xebuiltj but the financial position of the company, allied to the tariff war outlook, made this impossible. Negotiations were then begun for the sale of tho line. Chile at this stage immediately c'ompleted the purchase of her section. In reporting these developments the Argentine Government admits that no profits can be expected from operation •of the Transandine, at least for the present, though some improvement may materialize when the presept custom barriers between Argentina and Chile have been. removed, It is understood that economic negotiations will be begun by the two governments as soon as railway policy has been co-ordinated on this route. "" The Argentine Government expects an increase of traffic by linking up the line with the State railway system by means of the branch from Mendoza to Pie de Palo. Acquisition of the line is also in record with general government policy as reflected in the proposals to purchase the Cordoba Central Railway and tho Rafaela Steam Tramways Company. Chile, of conrse, will hnd it relatively casy to shoulder any losses on tho broad back of its State Rail-

ways, which, itretch all oy#r the country.