The Making and Evolution of the Buenos Aires Economic Elite in the Nineteenth Century: The Example of the Senillosas

Abstract

Using a reconstruction of the history of Felipe Senillosa and his family as a point of departure, this article examines the nineteenth-century Buenos Aires entrepreneurial elite, with particular reference to the way this group developed and evolved over time. An émigré who fled from the restoration of absolutist rule in Spain after the fall of Napoleon, Senillosa arrived on the shores of the River Plate as this area moved toward independence, and in the span of a few years he worked his way into the porteño socioeconomic elite. Senillosa was able to leave his heirs a significant fortune that included not only estancias in the province of Buenos Aires but also several other economic undertakings. Senillosa’s two sons, Felipe Bonifacio and Pastor, occupied notable positions within the late-nineteenth-century Argentine upper class and were esteemed among the most prestigious rural entrepreneurs of their time. However, they did not emulate the economic success of their father and as a result began to lose standing among the truly rich. Lacking entrepreneurial talent, the members of the next generation found it difficult to maintain their social position, and they continued on a downward trajectory. By the 1910s, the Senillosas were no longer among the wealthiest families in Argentina.The Senillosas are a particularly noteworthy example of the ascent of an immigrant family to the center of the Argentine economic elite and of the opportunities for social and economic advancement present in the River Plate after independence. No less important, their story also reveals much about the pressures that forced some members of the late-nineteenth-century upper class to descend from their former lofty positions—a phenomenon that, despite its significance, has been largely neglected by historians. Considered as a whole, the Senillosas’ rise and fall turns out to be highly illustrative of the strengths and weaknesses of the nineteenth-century propertied class and allows us to advance some hypotheses regarding the characteristics and evolution of this group.A brief reference to the historiographic debate on the Argentine economic elite may provide a useful introduction to this issue. Traditionally, historians have argued that the nineteenth-century propertied class was a parasitic, rent-seeking elite that based its economic and social supremacy on control of the fertile pampean land. This negative view of large rural entrepreneurs, which socialist and other left-leaning thinkers developed at the beginning of the twentieth century, gained wide currency after the Great Depression, as the export sector entered into a long period of decline and the economy lost momentum. In the last 30 years, however, this interpretation has been called into question. Despite the rural sector’s weak performance after the Great Depression, this portrait of the pre-1930 landed elite as lacking entrepreneurial spirit and as an impediment to economic growth precludes a coherent explanation of the formidable agrarian expansion that stretched from the early nineteenth century to the 1920s and made Argentina one of the world’s leading agricultural exporters. This fact explains why most current views on the nineteenth century rural entrepreneurs emphasize their dynamism, entrepreneurial spirit, and business acumen.1Jorge F. Sábato’s La clase dominante en la Argentina moderna is perhaps the most powerful indictment of the traditional conception of the Argentine economic elite to date. Sábato’s work not only questions the supposed backwardness of the major landholders of the pampas but also seeks to reject the very definition of the turn-of-the-century economic elite as a landed class. Sábato did not look into the earlier period, and thus for the most part he accepted the depiction of the postindependence business elite as a landed class. But he insisted that between 1880 and World War I large-scale entrepreneurs formed an extremely dynamic business group whose economic interests encompassed a wide range of activities—from agriculture to industry, from commerce to finance. For Sábato, the sharp fin de siècle Argentine businessmen obtained supernormal profits by diversifying their assets into activities that were just opening up or where barriers to entry allowed for the accumulation of profits above the normal level. In this light, Sábato suggests, it would be more accurate to describe the large entrepreneurs of the turn of the century as an economically diversified elite rather than as a purely landowning class.2Sábato’s view lacks sufficient empirical testing. However, his ideas have had a marked influence on recent Argentine historiography, to the extent that they may constitute the most widely accepted point of departure for any analysis of the country’s larger entrepreneurs.3 Significantly, Sábato has described Pastor Senillosa, one of the most distinguished members of the family under consideration here, as a paradigmatic example of a turn-of-the-century businessman who, in order to obtain above-normal profits, diversified his assets into various spheres of activity. This article shows that this interpretation requires revision. Until the end of his days, Pastor Senillosa held most of his assets in rural enterprises. Although it is true that he also invested in other sectors of the economy, it is important to note that this decision was not oriented, as Sábato suggests, toward the prospect of obtaining higher profits; Senillosa’s diversification of investments can be better understood as an economic strategy aimed at creating new sources of income for his numerous heirs, given the insufficiency of his territorial holdings. Furthermore, it is not the case that the Senillosas were an exception among large Argentine entrepreneurs. Comparing the Senillosas with a sample of other large-scale businessmen at different points in the nineteenth century allows us to conclude that the family was rather typical and that Sábato’s interpretation should be discarded. This does not mean, however, that the traditional view of the nineteenth-century economic elite as a landed class provides full understanding. Recent work on the subject, and the evidence produced here, suggest that, if anything, economic diversification was an important economic strategy in the immediate postindependence period, rather than during the later period as Sábato suggests.Felipe Senillosa, the first member of this family to set foot in America, arrived in the River Plate region more by ill fortune than by design. Senillosa was born in Valencia in 1790 and, following his father’s lead, took up a military career. In the early 1800s, he was sent to the Royal Academy of Alcalá de Henares to train as a military engineer. In 1808 his studies were interrupted by the French invasion of the Iberian Peninsula, and Senillosa marched to the front. Shortly afterward, his unit surrendered to the French army in the siege of Zaragoza. It did not take much to convince this deeply republican young officer to put himself at the service of the French. After completing a new course of studies in military engineering at Nancy, he served Napoleon until the latter was defeated and captured after the battle of Leipzig in 1814. Senillosa returned to his home country, but the restoration of the Bourbon dynasty in Spain made things difficult for a former French officer. He soon decided to emigrate to London; there he met Bernardino Rivadavia and Manuel Belgrano, who would invite him to move to the River Plate.Senillosa arrived in Buenos Aires in 1815, with little more than the skills he had acquired in the barracks. However, his knowledge of engineering and mathematics were advanced by contemporary River Plate standards. Senillosa had completed his professional training in the engineering corps of the Napoleonic army, an environment where the prestigious ideas of Enlightenment science and technology blossomed. An ardent propagandist of these ideas, which already had considerable appeal in the Plate, he soon became a respected fig ure in Buenos Aires. In fact, Senillosa’s cultural capital and republican feelings allowed him to rapidly earn a notable place in the porteño society of the revolutionary period. He became the first professor of the Cátedra de Matemáticas del Estado in 1816, director of the Academy of Mathematics the following year, and professor of geometry at the newly created University of Buenos Aires by 1822. By the end of the 1820s, Senillosa’s intellectual prestige enabled him to acquire a seat in the Buenos Aires House of Representatives, which he held through the long dictatorship of Juan Manuel de Rosas. As a fitting expression of the recognition he enjoyed, he was commissioned during these decades to design and build residences (Rosas’s own, in Palermo, is attributed to him), public thoroughfares, churches, and state monuments. Senillosa’s career at the service of the state is also linked with the early history of the Department of Topography, an institution of great importance during this period, over which he presided in 1827.4The foundation of the Department of Topography reveals the growing importance given to the creation of a more accurate registry of rural properties in republican Buenos Aires, which reflects the rising value of pampean land after independence. During the colonial period, the countryside was not a high priority for viceregal authorities. Land was cheap and abundant in the pampas, and the state made little or no effort to develop a legal system to enforce property rights. The low economic value of land can be seen in the traditional method of measuring plots, which consisted in measuring just the length of the front side of a plot along a stream of water, without much attention to its depth (and therefore to its surface). Before independence, silver production in Potosí and the resultant international and interregional markets were the true motors of the viceregal economy and the major sources of income for its economic elite—at whose pinnacle stood not landholders, but wholesale merchants. Urban rents and money lending, rather than rural production, provided additional sources of income.5 Demand for rural produce was meager, largely because the mercantilist economic system banned trade with foreign partners. This forced rural producers to rely on local markets and constrained the expansion of agricultural production, which experienced little change in the century before the 1810s. The pampean countryside was populated mainly by small-scale grain and livestock producers (owners, tenants, and squatters), whose plight the colonial bureaucrats largely ignored. In fact, up until the revolution of 1810, the viceregal administration’s major concern regarding the pampas was to guarantee a regular supply of foodstuffs for urban consumption. It made little or no effort to help develop larger market-oriented rural concerns or to enforce property rights on lands.6Independence from Spain forced the new government and the economic elite to redefine their relationship with the countryside and rural production. The porteño wholesale merchants who had dominated trade with Upper Peru soon lost control of that territory, since it remained in royalist hands until 1825 and then became part of the Republic of Bolivia. The wars of independence and later civil conflict created further obstacles to inland trade in the region. Nevertheless, despite its negative effects on mining and its related enterprises, independence also opened new entrepreneurial opportunities. The possibility of free trade oriented the pampean economy toward the Atlantic world, and in particular toward the export of hides and other livestock by-products. From the mid-1810s, and with even more force from the 1820s onwards, the new economic opportunities offered by cattle raising began to draw capital away from the distressed mercantile sector. The local mercantile community faced other pressures, too. The opening of the River Plate to the world market allowed European and U.S. merchants to increase their numbers in the region dramatically. These recent arrivals, who were the masters of new marketing techniques and had close connections with the dynamic markets of the North Atlantic, began to displace local merchants from trade. Hence, local capitalists were given an extra incentive to try their luck at new ventures, most notably rural production for export.7 As I will discuss in greater detail below, however, the entrepreneurs who turned to rural business did not completely abandon other economic activities.Thus, although marginal in colonial times, rural production for export emerged as the economic dynamo of the Plate and began to attract resources from other sectors of the economy, among which merchant capital was paramount. The republican state encouraged the expansion of the rural export economy in order to lessen the social and political turmoil that characterized this period of acute international and internal conflict and to create a new source of revenue (taxes on international trade) that would compensate for the loss of revenues collected on silver and internal trade. Essential to this program were the expansion of territorial control over Indian lands and the consolidation of a legal order that would guarantee property rights in the countryside. The Department of Topography was an important element in this project, and Senillosa—by then one of its leading figures—played a major role in it. He also approached this venture with personal motives. Throughout the 1820s, Senillosa commanded several surveying expeditions of the frontier lands south of the Salado River (a region that was being opened up for white settlement) in the service of both the state and private interests. In the winter of 1825, for example, he spent several months on the frontier with a party of 60 men, surveying and measuring a huge tract of land in Los Camarones that the Anchorena brothers had bought; by that time, he had already made good money measuring properties for Piñeiro, Blas Escribano, Pita, Hildalgo, Ramos, Ezeyza, Segismundo, Macedo, and several other capitalists who were investing in estancias.8 A few months later, in the summer of 1825–26, he again returned to the frontier at the head of one of the most important expeditions undertaken by the government during this decade.9These surveying expeditions made Senillosa one of the few porteños with firsthand knowledge of the new lands opening up south of Buenos Aires. He quickly used this knowledge to his own economic advantage. In those years, this immigrant’s fortune was insignificant; for example, when he married Pastora Botet in 1819 he possessed a mere three thousand gold pesos, less than 1 percent of the estate he would accumulate during the remainder of his lifetime.10 It is not surprising, therefore, that he chose to start his career as a landowner by making good use of Buenos Aires’s emphyteutic regime (the system of leasing public lands at a low cost conceived by Bernardino Rivadavia in the mid-1820s), which well suited those who wished to develop rural enterprises but did not possess sufficient capital to buy land or were reluctant to bind assets toward this end. In those years Senillosa rented some 32,000 hectares in San Vicente and another 6,000 hectares in Salto.11 During the late 1820s he began to buy land, albeit modestly: some 1,350 hectares in Quilmes and, several years later, some 2,000 hectares in the Arroyo Camarón.12Rosas’s land policy helped Senillosa become a great landowner. In 1836, the government promoted the privatization of public lands leased under emphyteusis. Conditions were very advantageous for buyers. During the late 1830s, Senillosa (who was a decided promoter of this land policy from his position in the legislature) acquired some 40,000 hectares: an estate of 32,400 hectares traversed by the Arroyo Chico in Ayacucho and another estate of 8,100 hectares on the southwest bank of the Salado River in Pila, which he called El Venado. It might be useful to examine briefly the conditions of the purchase of the estancia Arroyo Chico, the most important of these holdings. By 1836, Senillosa already held the property under emphyteusis. Conditions were extremely favorable for lessees, who paid a small rent for the use of public land. In a speech in the House of Representatives supporting Governor Rosas’s plan to sell roughly 4 million hectares under emphyteusis, Senillosa himself noted that the state was collecting barely 8,500 gold pesos annually for lands that were assessed at 0.7 million gold pesos or more.13 It has been estimated that this last figure represented less than 6 gold pesos per square league per year— a sum equivalent to the value of one and a half cows per year for the right to exploit 2,700 hectares, an extension that could easily support a thousand cattle.14 The conditions for the sale of the lands laid out in the 1836 law were certainly no less favorable than those for renting them. Thus it should not come as a surprise that once the 1836 law was put into effect, Senillosa moved to buy. For the 32,400 hectares in Arroyo Chico, Senillosa paid a total of around 6,800 gold pesos in three installments.15 Furthermore, the payment was made not in cash, but in livestock; even though the evidence on this transaction is scarce, Senillosa must have paid for the land with some 1,600–2,000 head of cattle, a figure that represented probably less than 20 percent of the cattle that the property could support.16 It is no wonder Senillosa himself argued that the price at which the government was selling land was indeed quite “moderate.”17Not only was Arroyo Chico acquired at little expense; like El Venado, Senillosa’s other large estancia, it was among the best in the region. Both properties were located on important waterways and possessed abundant reserves of water as well as some higher ground. The lowlands were particularly apt for the primitive cattle-grazing technology characteristic of the era (before wire fences, water pumps, and drainage canals began to transform rural enterprises in the 1870s and 1880s). In the fenceless pampa, streams and lagoons were important not only for watering the animals but also in preventing cattle from roaming past the estancias’ boundaries, thus making management easier. Senillosa became aware of the quality of the lands near El Venado thanks to the expeditions he had undertaken to the frontier region in the mid-1820s. The diary he wrote during the winter 1825 expedition indicates this clearly. In the June 7 entry, which refers to the crossing of the Salado along the Venado pass, he writes, “[T]he lands immediately surrounding the Salado are hills with good pastures.”18Shortage of capital meant that Senillosa’s rural concerns grew slowly during their early stage of development. In the late 1820s and early 1830s, he regularly bought small herds of cattle (one or two hundred head every few months) from the Anchorenas and other neighboring estancieros in order to enlarge his breeding stock.19 By the late 1830s, his estates seem to have achieved a more mature form. However, abundance of land in relation to capital still shaped his business practice for decades. By 1842, at a time when sheep breeding in the pampas was in its infancy, he already had Irish and creole sharecroppers raising sheep.20 Also, the overseer of El Venado was employed to manage production there, but he also raised his own livestock on parts of the property and divided the earnings with his boss.21A dynamic but largely absentee landowner, Senillosa paid close attention to other commercial, financial, and real estate ventures. Unfortunately, what remains of Senillosa’s trade-related correspondence, scarce before the early 1840s, does not tell us much about his situation before that date. From that point onward, however, it clearly indicates that he invested simultaneously in diverse areas. By the 1840s, Senillosa possessed a mercantile house that imported wine, cigars, and several other Mediterranean products. In addition, at El Venado he owned a ferry that took passengers and cargo across the Salado. He also ran two pulperías located on his estates that not only marketed dry goods but also collected local produce (hides, wool, furs, and so on) for sale in Buenos Aires or for export to places such as Brazil, London, Cuba, and the Mediter-ranean.22 The fact that Senillosa actively traded with ports in Spain and her Caribbean colonies suggests that the relations he had left behind in his country of birth helped him gain trade partners. Most probably, these links were reinforced as a result of Senillosa’s marriage with Pastora Botet, the daughter of a Barcelona-born porteño merchant who had been engaged in commerce with the Iberian Peninsula since the late colonial era. Although Pastora brought a meager dowry to the marriage (some one thousand gold pesos), she gave her new husband something more important: a network of international mercantile relationships. These relationships were of great importance in an age when long-distance trade success to a large extent depended upon links with important and reliable partners.23 In 1845, Senillosa also entered into a partnership in a salting house. As the years passed and the scale of the operations of the saladero El Reloj grew, Senillosa bought out his original partner, Adolfo Mansilla.24 Finally, he also engaged in money lending and discounting bills of exchange.25Senillosa always remained attentive to new business opportunities. In an unstable economic environment such as postindependence River Plate, the line between aggressive business practice and mere speculation was a fine one. This became especially apparent when civil or international conflict disrupted trade. In the latter part of the 1840s, for example, an Anglo-French fleet blockaded the port of Buenos Aires for several years, forcing entrepreneurs to divert part of their resources away from rural production in order to continue in business. In November 1845, Senillosa wrote to a correspondent in Monte-video that “from this day forward the blockade is in effect and there is little we can do . . . regarding business[;] the only thing that I believe holds promise is the purchase of frutos del país, the price of which I believe will drop significantly this summer.”26 Several months later, Senillosa remarked that the port’s closure offered business opportunities for speculators who had the resources to buy rural products and could afford to wait for prices to rise again: “[I]t will be a worthwhile speculation to buy dry hides and keep them until the blockade is ended.”27 During those years, Senillosa seems to have invested in urban construction and considered the possibility of erecting a textile factory to process wool from the pampas.28In sum, simply describing Felipe Senillosa as a landowner is insufficient. Even though rural production was crucial to the first stages of his rise to economic success, it was only one part of a larger urban-based mercantile business. In fact, in 1850 this holder of more than 40,000 hectares of grazing land reminded one of his foreign correspondents that “my principal occupation today is transatlantic trade.”29 A quick look at his estate at the time of his death in 1858 indicates a basis for this self-perception. Senillosa left his wife and four children roughly 450,000 gold pesos. This sum, representing around 6 percent of Argentina’s total fiscal revenue in 1864, was comparable with the estates of other large entrepreneurs of his time.30 For example, when Saturnino Unzué died in 1853, he left an estate of around 350,000 gold pesos, and Eustoquio Díaz Vélez passed on to his heirs a similar sum in 1854.31 How was Senillosa’s money invested? Although the weight of his landholdings is noteworthy, Senillosa was (like Unzué) not just a landowner, but a diversified entrepreneur. His rural enterprises represented 48 percent of the total value of his possessions. He also owned some small chacras in Quilmes valued at 1.5 percent of his estate; two urban properties and a suburban quinta in Barracas were valued at 12.8 percent of his estate. The mercantile house was appraised at 9.3 percent and the saladero at 7.4 percent, respectively, of his holdings. The pulperías, taken separately from the mercantile house, were valued at 3 percent of his estate. Finally, the heirs to Felipe Senillosa’s fortune received gold and silver coins equivalent to 16 percent of the total estate.32How exceptional was this pattern of investment among the porteño upper class? A recent work offers a reliable overview of the patterns of wealth accumulation during the 1820–53 period that allows us to place Senillosa in perspective. Juan Carlos Garavaglia undertook a study of large-scale rural entrepreneurs, who owned on average more than 29,000 hectares; he concluded that, for the entire group under consideration, investment in rural ventures barely reached 42 percent of their total wealth. Investment in urban and mercantile concerns accounted for a larger share of these estates: urban property 30.3 percent, cash holdings 10 percent, active credits 5 percent, and chacras and quintas 3.5 percent.33 Even taking into account the peculiarities of each individual case, these figures show that Senillosa’s pattern of investment was typical of the business practices of the large rural entrepreneurs of the first half of the nineteenth century.It is important to explain why this pattern of investment became dominant among large rural entrepreneurs in the half century following the breakup with Spain in 1810. A recent work suggests that the diversification of investments was a strategy to cope with monetary instability.34 However, problems such as currency depreciation and exchange rate volatility were just one aspect (and perhaps not the most important) of the political and economic instability that the River Plate provinces experienced at that time. More than half a century of blockades, international warfare, civil conflict, and political turmoil shaped business practice in a profound and enduring way. For example, the four blockades of the port of Buenos Aires during that period interrupted international trade for long periods of time and encouraged entrepreneurs to shift to either speculation or internal activities to avoid bankruptcy or heavy losses.35 The River Plate provinces also witnessed long and costly international wars and violent civil conflicts (which entailed, as in 1839, massive land expropriations). The absence of a stable political order created a climate of economic uncertainty in which stabilizing economic institutions failed to emerge. Thus, capitalists were forced to develop their businesses in an economic environment far more turbulent and uncertain than that of the last period of colonial rule, which itself was disturbed by social upheavals in Upper Peru in the 1780s and almost permanent war from 1779 to 1810, first with Great Britain and then with Napoleonic France.36In such a volatile environment, capitalists had to make profits while at the same time protecting themselves against economic and political uncertainty. In rural business, this instability meant that profitability was never assured in the short run. Apart from the vagaries of nature (very important, given the backward technology of the time), profits depended upon political and market factors beyond the producer’s control. The same applies to other ventures, such as commerce, which were also subject to unstable market and political forces. Diversification of assets strove to resolve this dilemma by spreading risks across different sectors in order to compensate for sharp, unpredictable fluctuations in supply and demand. For most entrepreneurs of newly independent Argentina, long-term success depended, to a certain extent, on the variety of their investments. This is why rural production (though far more dynamic than other ventures) did not displace, but rather complemented, diverse undertakings such as import and export trade, local trade, mercantile and financial activities, and the rental of urban property.Adaptation to the changing business climate of independent Argentina helps explain Senillosa’s success. However, it is not easy to give a precise account of the crucial steps that allowed him to amass his fortune. This is partly because Senillosa’s private papers and other available historical sources do not allow us to compare and weigh various relevant factors—such as access to scarce information, entrepreneurial talent, social contacts, or even mere chance—in this businessman’s rise to fortune. The peculiar historical context of this ascent, however, can be reconstructed in broad brush strokes. If there is one key element in Senillosa’s success, it was his ability to take advantage of the sudden transformations in the River Plate economy in the decades following 1810, particularly the crisis in the mining economy and the subsequent shift toward agricultural production for export. During the era of traditional technology that prevailed until after the middle of the century, livestock raising in the open pampas was characterized by high (but fluctuating) profits and, above all, modest initial investments of capital.37 The low cost of frontier land and the low levels of rural technology opened a field of opportunity for individuals who, like Senillosa, possessed more ambition and talent than capital.38 Although Senillosa was a new arrival in Buenos Aires society, his intimate knowledge of the territory south of the Salado represented a resource that few of his peers could match. As a consequence, he knew well where to petition the state for lands in emphyteusis and where to buy public or private lands. Due to this unique convergence—a firsthand knowledge of the mechanisms for acquiring hig