Then it was observed that the desert plains above the upper parts of the inhabited valley swarmed with guanacos as the desert plains of New Mexico once swarmed with antelopes. Droves of from 5000 to 7000 were seen. It was rightly argued that sheep could live where the guanaco did. The Chubut colonists are going into the wool business, though slowly, and this is certain to be the greatest source of wealth to the colonists in the future. Bunch grass grows on the uplands. It is in scant quantity, but it is there. Water flows through the valley. The man who has water can hold all the sheep that can feed on the desert back of his farm, and that means at least two thousand. Sheep thrive wonderfully in the pure air and on the dry gravel of Patagonia. Everywhere along the coast the shepherds boast that every sheep is worth a gold dollar a year clear profit, besides the increase in the flock. But this statement should not lead any one to go to Chubut to begin life, because all the available land in the valley has been taken up. Meantime, after irrigation brought crops, the subject of transportation had agitated the colonists. The mouth of the Chubut River had an impassable bar. Nearly all freight, previous to 1885, was either brought to New Gulf and carted thence over the old trail to the valley, or else was brought in tiny sailing vessels which, at the time, when the melting snow on the head waters made a freshet in the river, could work in over the bar. The surplus grain had to be shipped out in the same way. There was a weary and an expensive haul by the one route; by the other, a tedious and expensive waiting for high water. In 1885, a company was formed to construct a railway from the valley to New Gulf, and the Argentine Government granted a charter, and gave a subsidy of 204 square miles of desert land. I guess the subsidy isn't worth much, for there seems to be no way to get water on it. They even carry water from the Chubut valley to supply all employees along the line, now, but a road of a metre gauge was built, and a very good road it is, considering that English stock and materials were used. Building the road involved the making of two new town sites--one on the gulf and one at the railroad terminus. That in the Chubut valley has been built up, but half a dozen wood, iron, and mud huts are all that can be found at Madryn, on the gulf. Still Madryn is an interesting town. It has a ruler, appointed by the President of the republic. He is called the Prefect. His district is a sub-prefect, and he is a sort of an autocratic Mayor. Lieutenants in the navy get all such appointments in Patagonia.