Chapter 15 - The Panic of 1837 and the Platine Economic Transition
The Panic of 1837 started in the US, but its effects reverberated throughout the Western hemisphere, including the United Provinces.
When the Bank of England raised its interest rates at the end of 1836 in response to a severe decline in the American cotton and wheat markets, the change did not impact the United Provinces right away: Platine wheat harvests continued to boom, even benefitting from the sudden collapse of American wheat harvests due to a combination of pests and harsh weather. But the country’s financial sector was fragile and heavily leveraged to both American and British banks, so when the effects did hit, they hit twice as hard: a string of bank closures in New York took down several branches in Buenos Aires, and so began the Panic of 1837 in the United Provinces.
Much like the Panic of 1825, the most immediate consequence was the rapid deterioration of the national government’s finances. With hundreds of thousands of small-denomination Incan War bonds still in circulation, this aggravated the impact of bank runs, as holders of the bonds tried to cash in on them in a desperate hunt for silver and gold. The value of the peso crashed, setting off a chain reaction of defaults and bankruptcies, and leading to hundreds of thousands of peasants forced off their land by crushing debts.
As the cities swelled with the influx of the newly destitute, food prices spiked again, leading to even more riots than the Incan War: in addition to Córdoba and Tucumán, the food riots would spread to Salta, Santiago del Estero, Mendoza, with less violent but equally massive demonstrations across Collao, the region which had most purchased war bonds. The Littoral and Buenos Aires would be spared the worst of the food riots, with Buenos Aires’ population swelling above 100,000 during this period, but the lowland region would be hit by problems of its own as the economic crisis brought Monteagudo’s government crashing down in 1838, ending the Morenist monopoly in Buenos Aires with the election of the Federalist Juan Manuel de Rosas as governor.
Rosas’ triumph at the elections had depended heavily on his party’s ability to better mobilize the impoverished new arrivals to the city, appealing to promises of land grants and direct aid for the poor in contrast to the more mercantile concerns of the Buenos Aires Liberals. This signaled a broader shift towards the Federalists that would last the rest of the decade, creating fertile ground for the ideas of the nascent Chartist movement in the UK to take root.
Arriving in the United Provinces through the ports of Buenos Aires and Montevideo starting in 1839, the movement garnered immense sympathy quickly, with universal male suffrage, secret ballots, the abolition of property qualifications for election and the payment of members proving the most popular of the 6 Reforms of the People’s Charter. Rosas’ influence in Buenos Aires would dilute some of its influence on the local Federalist party, but Chartist sentiment would spread like wildfire in the rest of the party, with Uruguay, Santa Fé and Misiones granting universal male suffrage after the 1840 elections.
The reforms would spread to the rest of the country in fits and with varying degrees of implementation: Buenos Aires would abolish property qualifications for voting, but would keep them in place for candidates; Collao would abolish property qualifications for both voting and candidates, but would restrict the franchise in other ways, including barring the unemployed or the homeless from voting; while in the interior, poll taxes replaced property qualifications.
But even as the elections shifted from the Cabildos themselves to polling stations, significant barriers to participation persisted. The two most important ones were literacy tests and the public vote itself: literacy tests disenfranchised huge swathes of the country’s poor, while the custom of having to publicly announce a vote created a system ripe for intimidation and violence. Once contained to occasional brawls when the Cabildos were in session, it would spread with the franchise: although fatalities were rare, stabbings and beatings were a common part of elections.
The 1840s would be a period of dramatic change in the country, coinciding with a global period of upheaval that would lead to Europe’s Springtime of the People in 1848. All three major parties would grapple with these changes, forced to adapt or die: none could truly arrest the advance of the Platine chartists, but the parties compromised with their electorates where they could. The Catholic Party took on a much harsher social conservative stance, becoming further intertwined with the clergy and the strict defense of traditionalism. The Liberals put up little resistance to the expansion of the franchise, but its predominantly bourgeois leadership remained attached to elitist prejudices that inspired restrictions like literacy tests and work requirements. The Federalists for their part would grow increasingly agrarian, a logical outgrowth of their preexisting popularity among the class of small landowners they had helped create.
As the economy recovered, the shift towards the lowlands accelerated, especially as unrest in Europe increased the flow of immigrants. The sudden influx of people into the cities created a mass of low-wage workers that led to the creation of hundreds of small manufactories cropping up along the Paraná River and the River Plate. But the most significant transformation brought about by the economic recovery starting in 1842 was the expansion of the railroad, with over 400 kilometers of track by 1850[1].
An archive photo showing the first locomotive to operate in the United Provinces, connecting the port of Buenos Aires to the ranching towns to its west.[*]
The impact of the railroad on the United Provinces - and on Latin America in general - cannot be overstated: it did more to dramatically transform Platine society than the local Chartist movements, cutting down travel times and leading to booming exports both along the River Plate Basin and the mining regions of Collao. These would feed into each other, with nitrates from the Pacific coast contributing to record harvests on the Atlantic coast, with the drop in food prices leading to real wage increases in both regions.
The newfound prosperity would lead to significant cultural shifts, as the country’s burgeoning capitalist class sought to imitate their European and North American peers. The return of the Liberal party to power in Buenos Aires leads to a new series of public works, but it contrasted with the increase in waterborne epidemics due to the rapid growth of the city’s population. A severe cholera epidemic in 1852 led to a shift in the city’s landscape, as the city’s growing upper class moved to greener pasture in the north of the city and filled the new quarters with buildings constructed in the modern European styles, offering a sharp contrast with the colonial architecture in the old city.
Collao’s nouveau riche would spur a similar architectural revolution in Chuquisaca, which consolidated its position as the nation’s second largest city during this period and had 70,000 inhabitants by the 1851 census. Inca-inspired cut stone would take the place of the European-inspired grand marble palaces, consolidating an iconic Neoincan[2] architectural style that Cusco would go on to make famous with the construction of a new palace for the Sapa Inka in this style in 1849.
Asunción and Montevideo would see beautification projects of their own, with the arrival of the railroad dramatically increasing the exports out of both cities and leading to the rapid growth of the local bourgeoisie. The growing cities of the Argentine interior - Córdoba, Tucumán and Salta leading the pack, with a combined population of nearly 100,000 between the three in 1851 - would experience radical changes of their own: operating as transit hubs along the Pacific-Atlantic route, their populations boomed as the cities sprawled, and they would popularize a neocolonial style that would set them apart from the export-oriented provinces of the North and East.
With the rapid growth in exports, the national government’s income boomed, and the country would push its southern boundaries rapidly as a result, racing against Chilean expansion as the two governments advanced as quickly as they could lay down tracks, reaching the Magellan Strait only days apart. The impact of this race on Patagonia’s natives would be catastrophic, with the native population in the South declining by nearly 50% in the upcoming decades.[3]
The United Provinces were a different country altogether by the 1850s: the process of democratization would continue throughout the rest of the century, and the country’s gradual industrialization picked up speed in that decade. It would also be a period of unprecedented economic stability, as the trends continued with only relatively minor fluctuations until the Panic of 1873 plunged the world into a global economic crisis.
A Platine Real coin, also called "Piece of 8", pegged to the value of the Spanish Real since independence.[4]
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[1] The first public railway is a decade and a half ahead of schedule, but I’ve kept the growth of the network on the conservative end for now. For reference, the US rail mileage increased from 39.8 in 1830 to 2,755.18 in 1840, and would more than triple to 8,571.48 by 1850. For comparison, Argentina’s network expanded from 9.8km in 1860 to 722km in 1870 and would quadruple to 2,516km a decade later. The biggest change from this is that it’ll also mean that the railroad will arrive in Uruguay, Paraguay and Bolivia much earlier than IOTL, and will be integrated into the Atlantic-export network much sooner.
This is occurring at the height of Railway Mania in the UK, so there’s a lot of capital available for railway projects (at least during a brief window, which will be followed by a series of bankruptcies and mergers in the Platine rail industry, more frequently under British than Platine ownership); the rail network is likely to experience the same sort of explosive growth after the 1850s.
[2] I am heart broken that I’ve been unable to find any examples of this style in my searches, but think it would be practically guaranteed in a TL where neoincan sentiment is stronger and there is a local capitalist class that is directly inspired by it (although they might resent it being called neoincan in Collao, since they could rightfully claim that - if anything - it’s inspired by Tiwanaku architecture, which is located in Collao).
[3] Things are better for the “non-integrated” natives to the extent that tribes like the Ona and the Charrúa haven’t been literally exterminated, but the UP remain a post-colonial nation and its treatment of subjugated tribes was frequently just as brutal as the Spanish subjugation of the region had been. There are Quechua and Guaraní soldiers in the army regiments accompanying the railroad, but they’re still slaughtering the locals that resist Platine encroachment.
[4] The Spanish Real remains one of the most widely circulating currencies on the planet at this point, considered legal tender from the US to the River Plate. There are a lot of incentives for the United Provinces to maintain its "domestic" currency pegged to its value, although as IOTL, there is a second, paper money that is frequently used for internal trade. I haven't come up with a good reason to change the name, but I'm going on record and saying that I hate the names "Peso Moneda Corriente" and "Peso Fuerte". I'm currently leaning towards the United Provinces adopting the name "Peso Esterlino".
[*] Dubbed "La Porteña", this is OTL, but ahead of schedule.