The system employed in extracting the tannin is based upon diffusion. Firstly, the wood is reduced to powder by means of machines which cut or saw the wood, into which the logs are fed entire. Then, when the wood is converted into sawdust or fine chips or shavings, it is passed through extractors or diffusers, which separate the cellulose from the tannin, which is finally concentrated to the degree demanded by the market by means of vacuum pans. During five years, from 1904 to 1908, the exports were: 20,111 tons in 1904; 29,408 tons in 1905; 30,839 tons in 1906; 28,190 tons in 1907; 48,160 tons in 1908. Germany and the United States are the chief buyers of this valuable product, which forms the principal wealth of the northern part of the Argentine. In the first edition of this book we prophesied a rapid and prosperous development for this industry, which had already received a considerable impetus; unhappily this prediction has not been realised in practice, and the quebracho industry has suffered, not precisely a crisis, but a diminution of its outlets which has seriously prejudiced its interests. This trouble is due to various causes. Firstly, the ruinous competition between the various firms producing quebracho tannin; a competition which has now happily disappeared, thanks to an arrangement concluded between the principal companies, on the initiative of M. Hermann Schlieper; secondly, to the almost prohibitive duties which the German Government has imposed upon the importation of the product; thirdly, the indifference shown by the railway companies in using on their permanent way sleepers of steel rather than of quebracho, although the latter is more durable. It is to be hoped, however, that in course of time these causes will disappear, and that this industry will in future recover all the elements of progress. _The Timber Industry._——Another industry which is equally dependent upon the forestal wealth of the Argentine is that whose object is the exploitation of the various and valuable kinds of wood to be found in various parts of the country, especially in the forests of the Chaco and of Formosa. The variety of costly woods to be found in these forests is astonishing. Recently more than thirty-three species have been classified, all of industrial value; the best known, besides the quebracho, being the acacia, algarrobo, button-tree, lapacho, bay, the smaller cedar, and many other varieties, black, white and red. To exploit this forestal wealth a limited company has lately been formed with a capital of £352,000, which proposes to erect two important saw-mills in the Chaco. This company already owns about 2300 square miles of forest, and is thinking of increasing its domain by further purchases. _Fisheries._——Finally, quitting the forests for the seas, we must mention one other industry, at present unimportant, but apparently capable of considerable development: namely, the sea fisheries.