The Cordoba System of Land Tenure in Argentina
Will Lissner
[Originally published in the Fortnightly Journal
of Economic, Agrarian and Social Issues, Buenos Aires, Argentina.
Translated by Will Lissner. Reprinted from Land and Freedom,
July-August 1940]
Cordoba is an important issue in current public debate. The
administration of Dr. Amadeo Sabattini (Governor of the Province of
Cordoba, Argentina) has ardent partisans and implacable opponents. Let
us see what is happening in this Province that singles it out in such
an unusual manner from the other Provinces in the union of more or
less independent States constituting the federal government system of
Argentina. In Cordoba, under the new regime, the land value tax is a
reality. The latifundists are setting up a tempestuous clamor; the
press which is at their service amplifies their voice.
For this reason, it is just that the defense of the Cordoba
administration be given a hearing. We therefore present, with
doctrinal reservations, an extended report* by the Finance Minister of
Cordoba, whose remarks are of the highest interest despite certain
Socialistic leanings.
REPORT OF THE FINANCE MINISTER
The text of the report is not here presented in full,
some technical financial points having been omitted.
When, after the change of administration (in 1936), operations were
begun, the state of the provincial finances presented alarming-
problems. Debts had been contracted on wages and salaries of the
administrative personnel up to nearly one-half million pesos. And
during 1935, the administration had been illegally disbursing part of
the appropriations budgeted for 1936.
The national debt had not been attended to in any way between 1931
and 1934. The recorded public debt of the Province suffered an
increase of 9*72 million pesos up to that first of January, 1936. The
floating debt, which had been consolidated on December 31, 1931 at the
beginning of the former regime increased this sum by about 3 million
pesos; thus making a total public debt of [unreadable] million pesos.
And yet, in the budget for 1936, the public debt did not receive
preferred claim on the revenues of the State.
The new administration's outlook for achieving financial stability
could not have been less promising. The estimate of State revenues on
April 30, 1936, showed a drop of 10 millions compared with the
preceding year. But the new chief executive was a man capable of
handling the difficulty. Opportune and prudent measures were
undertaken for improving the financial situation. Adjustments were
made in the means of collecting taxes. Liberal opportunities were
given to the slower taxpayers. Improvements were introduced in the
methods of assessment and in estimating the public revenues.
The condition of the public finances grew better within the first few
months of the administration, reaching the point where it concluded
the first period with a surplus of more than one-half million pesos.
In succeeding periods the results were even better. Operations under
the budget of 1937 left the considerable surplus of 3% million pesos.
The period of 1938 was concluded with a surplus of [unreadable]
millions. With the confinement of present expenditures to the
estimates of the revenues, it is to be presumed that there was in the
following period a surplus of no less than one million pesos.
HOW THE PROBLEM WAS SOLVED
In the policies that have been imposed, the chief executive has
reduced the burdens on enterprise by means of suppression of patents
and the reduction of taxes on business, with the exception of those
levied on branches related to luxury or vice; and he has increased, in
the place of these taxes, the direct tax on the valuations of the
holdings of the great landed proprietors. This was done with the
double purpose of assuring that the tax burden would be distributed in
a progressive form with respect to the value of the properties; and of
combating the feudal land-holding system (latifundismo) by stimulating
the subdivision of the land.
The chief executive expressed his ideas in the message which
accompanied his legislative proposals for the year 1939: "The
laws imposed are not, and cannot be mere fiscal expedients for the
State. They cannot respond solely to a fiscal aim, without also making
for true social justice. This aim has been accomplished with the
increase in the rate of the progressive tax on land, and the exemption
of improvements; and at the same time, each contributes according to
his means, as contrasted with the sacrifice which is involved in the
payments of regressive taxes. The great land-holders collaborate in
proportion to their economic capacity to the work of building up
solidarity and social justice, which is being realized in many forms
by the State."
As inevitably happens in connection with all such fundamental
reforms, the large land-holders are agitating for the modification of
the rate of taxation and are carrying on a systematic campaign against
the new legislation. These wealthy proprietors, who fall within the
highest classes of the progressive tax, comprise only some 300
taxpayers out of a total of 287,000 landed proprietors registered for
tax purposes in the Province.
The Supreme Court of the Nation has repeatedly declared that the
principle of equality as the basis of taxation and of public burdens
must be harmonized with the realization that this equality can be
effected only among those of the same condition ; and that it is good
public policy to let the weight of taxation fall upon those who are
the least distressed by it. Jeze has phrased it thus: "The
economic capacity of an individual does not vary proportionately to
his income or his fortune, but progressively."
PUBLIC DEBT REDUCED AND PUBLIC WORKS INCREASED
The public debt of the Province, which up to May 16, 1936, had risen
to 75,334,532 pesos, amounted to 70,721,086 pesos on January 31, 1940
a reduction of 4,613,446 pesos; to which can be added l2'/2 millions
paid out for debt service. The public debt has been reduced, but no
new bonds have been issued, and yet great public works have been
constructed.
An integrated system of public water supply has been completed.
Throughout the Province, school and administrative buildings have been
constructed. There were also established school dining rooms; more
than 600 offices were built for teachers; the pay of the teaching
personnel was raised and bonuses provided for teachers; the Sanitary
Station of Noroeste was established, as was the Textile Trade School;
the President Roca School was enlarged; the subsidies to hospitals
were increased ; and an appropriation was given the office of the
General Director of Revenues for mechanical equipment which assured
the rapidity and exactness of its operations, permitting the complete
drawing up of the poll of taxpayers, and facilitating the calculation,
currently and exactly, of the estimate of the revenues.
The above-mentioned public works and many others, such as the
creation of the office of the General Director of Waterways and
Waterworks, the organization of a symphony orchestra, and the
establishment of the Saenz Pena Department, has raised the budget to
more than 34 million pesos, surpassing by about 7 millions the initial
budget of the present administration. However, in all the budget
periods, as has been pointed out, the operations ended with surpluses.
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