admitted duty free, according to the government tariff schedule.
Laboring under this belief a local druggist ordered one hundred. Imagine
his surprise when the customs collector charged him the duty assessed on
cut glass decanters, classing the thermometers as “etched glass
containers.” Their contents—mercury—was classed as an explosive at a
prohibitive rate and for “trying to evade the customs” a fine of $500.00
was added, or instead of getting the goods in, without charges, the
importer was obliged to pay $642.50 or go to jail.
In a shipment of pickles, because the invoice failed to state whether
they were put up in vinegar or mustard, a fine of $100.00 was collected.
On a box of candy weighing five pounds, sent as a present, the nature of
the ingredients of each separate piece of candy was not indicated, and a
fine of $80.00 imposed and obtained.
The bar of a famous ex-prize-fighter has been for years in a Latin
American custom house because the importer never could raise the money
to pay the arbitrary fine exacted. Brass pays a high duty according to
the schedule of the country to which this bar was shipped, because
cartridges can be made from it, although there is not an ammunition
factory in the entire land. In the decorations of the wooden pillars at
the end of the bar, there were one or two strips of brass about two
inches wide. The whole bar was assessed as of this metal and a duty and
fine amounting to several thousand dollars imposed, which caused the
American who bought it and who had intended to open a café in one of its
cities, to get out of the place on the first ship, leaving the bar as a
souvenir.
An iron bed, with four hollow brass balls as ornaments on the end posts
met with the same treatment in the same custom-house, paying a duty of
$200.00.
Theatrical appliances are free everywhere, especially if the property of
a traveling troupe. Despite this fact and a positive statement to this
effect in the tariff regulations, I knew one large Latin American
country, wherein a _carousel_, or “flying-horse” outfit, was refused
admission unless the owner paid the duty charged on live stock, each
wooden horse being assessed at the rate of $25.00, which is the tariff
on breeding stallions.
Thefts by minor employees of the custom-house are only too common. As a
rule these men are poorly paid and add to their scanty income by
appropriating whatever comes within their reach. I have known of cases
of soap, provisions, perfumes, shoes and the like to be entirely
confiscated in this manner. There is absolutely no redress. Very often
the higher employees are implicated in these nefarious practices. In one
of the largest and most progressive of Latin American cities, all the
foreign and native merchants had been receiving cases short of their
invoiced contents. Complaints to the authorities did not remedy matters.
Finally the thieves became bolder and the thefts more extensive, many
merchants being offered their own goods for sale at prices less than
they originally cost abroad. Concerted diplomatic pressure was brought
to bear, and an investigation promised. The day before the official
hearing, the entire block of custom houses involved was burnt, a strange
coincidence being that the four car tracks in front thereof, were
occupied with loaded freight cars so that the fire engines could not get
near enough to stop the conflagration. All records were thus destroyed
and nothing could be done, the loss, involving millions of dollars,
falling as usual on the foreign merchant.
Pages could be filled with similar data. All of our consular offices are
cognizant of these outrages, yet nothing definite has been attempted to
stop them. No matter what precautions the exporter takes, or how closely
he follows the shipping instructions, his customer can always be
victimized by these scheming officials. European nations suffer equally
with us and it would seem that the time is ripe for some united action
on the part of the great exporting countries to remedy this growing
evil, for that it hurts trade cannot be denied.
Not only are there unwarranted and excessive duties charged on imports
but on exports as well, and on these exports we as the largest user of
the things produced in Latin America pay the bill. These conditions
should be attended to at once, and it should be the business of our
State Department to adjust them properly.
On hides, coffee, rubber and sugar, which are the leading exports from
these countries, the United States charges no duty, or a merely nominal
one. The remarkable feature of this trade is that every Latin American
country imposes on all of these articles heavy export charges, which
according to their own laws are unconstitutional, and we pay the bills,
at the same time allowing them to impose exorbitant duties, outrageous
port charges, and illegitimate fines on our exports to them. It may be
argued that in the end the cost is finally borne by them, but the fact
nevertheless remains that there is much work here to be done by our
government to overcome these conditions for the benefit of all parties
involved. It is decidedly unfair for a country to collect revenues both
ways, namely, on its exports to us and on our exports to it.
The importer is the one who bears the brunt of these burdens. He is
continually paying bribes or fines which are of course added to the cost
of the goods. Failure on his part to “come across” means delays, loss of
goods, higher port charges and incalculable annoyances. One of the great
objections to this system of robbery aside from its basic principle of
error is that one shipment does not serve as a means for calculating a
price on the next one. A new custom-house official (and custom-house
officials are changed in these lands as often as a chameleon changes
color) may have come into office between shipments requiring a higher
standard of fines and bribes to placate. This obviously hurts the sale
of any article and makes the merchant hesitate to renew orders. Both
importers and exporters have preferred to be harassed, fearing that
their failure to comply with these unwarranted and illegal demands would
result in the exclusion of their goods from the country, a condition
which has often been imposed. Concerted action on the part of all
nations to stop this blackmail would meet with the support of the
merchants and importers of these lands, and the sooner some step in this
direction is taken the better.
Under the condition of affairs now existing, and the long-continued
attitude of our government toward all of Latin America, it seems as if
there is no hope for our people or merchants and that we must submit
uncomplainingly to these iniquities. There can be no doubt but that the
existence of such a state of affairs has done much to retard the healthy
growth of trade relations between all of these countries and the rest of
the world. Latin-American merchants are absolutely powerless to remedy
the situation by themselves. Attempts to improve must come from the
outside and be presented through diplomatic channels and most
emphatically insisted upon. A determined effort on the part of this
government would do much to bring about a change and would be a most
potent factor in extending our trade relations in these lands.
It may be argued that despite the system of fines, bribes and graft
which are so intimately associated with the Latin American custom-houses
the lands are prosperous and their merchants thriving, but the fact
cannot be disputed that the practice is decidedly wrong and reflects
materially on the integrity and dignity of the nation permitting it and
positively hampers the legitimate growth of trade.
XXIV
TRADE MARKS
The registration of your trade mark should be attended to as soon as
possible if it is your intention to enter the Latin American field with
the article which you manufacture. In many of these countries the laxity
of the laws governing this important commercial protection work great
hardship on legitimately established enterprises. I regret to state that
in nearly every one of these lands, it is legally permissible for anyone
to register any trade mark on fulfilling certain simple conditions and
the payment of a small fee. The result is that a class of men without
scruples are continually on the lookout for articles which are being
well advertised in this country, knowing the probabilities are that
sooner or later there will be a demand for them throughout the world and
especially in the place wherein they reside. Magazines and periodicals
of all classes are watched with care and as soon as extensive publicity
campaigns are launched in the United States or Europe, the chances are
that the trade name of the article being exploited will be
simultaneously registered by a native in many Latin American Patent
Offices. The next step in the technique of these rogues is to wait until
some shipment of the goods in question arrives, a fact easily
ascertained by noting the shipping news from the States and reading the
invoices and the names of consignees, data which is eagerly sought after
and published with great detail by all the papers of the port. An
injunction is then immediately obtained and the entire shipment is
either prohibited from landing or held in the custom house pending
wearying and tiresome legal complications, with the result that the
quasi owner of the trade-mark in question is always victorious and the
shipment either excluded from the country in toto or awarded to the
unlawful owner of the brand, in lieu of court costs and legal fees. In
the latter event they are then sold, and the money derived therefrom
goes of course to the pirates who had the foresight to register the
name. These men often wait for years before accomplishing their purpose
and with the idea of ultimately making money from their venture have
been known to renew repeatedly the trade-mark, when it expired owing to
legal limitations.
Of course on attaching a shipment of goods bearing one of these stolen
and registered trade-marks, the native owner always offers to sell out
his interest in the same, invariably asking a price absurdly excessive,
particularly so when one stops to consider that he is asked to pay a sum
for the right to use his own name. Knowing that he holds the whip hand
in the controversy, and that you must meet his terms and conditions, if
you wish to do business in the country, and further that he has you at a
decided disadvantage in many ways, the situation which develops is
trying in the extreme. Then follows a period of conferences,
time-wasting interviews during which much patience must be exhibited
until ultimately practically the original sum of money asked must be
paid. This has been the general experience of almost every one who has
been so unfortunate as to be confronted by such a situation.
Good business judgment therefore dictates that when you register your
trade-mark in the United States, you should also protect yourself by
registering it in the principal countries of Latin America. The easiest
way to do this is through your patent attorney or legal adviser. If
however you have failed to take this precaution, the first duty of your
representative on arriving in each of the countries in question should
be the registration of your trade name in the proper department of the
government.
In order to give this his personal attention he should have a power of
attorney authorizing him to act in this capacity. This paper may be
prepared by your attorney, and should be in Spanish for all countries
excepting Brazil, where the language is Portuguese. This document should
be signed with the firm name by the individual having the right to do so
and in the case of corporations by the proper officer, and the corporate
seal attached. The signature should then be sworn to before a notary
public, whose name and seal should be certified to by the Secretary of
State for the State wherein the firm or corporation does business or is
chartered. The notarial oath and the certificate of the Secretary of
State may be in English. These papers should then be sent to the
Secretary of State of the United States at Washington, D. C., who will
in turn certify to the fact that the signature of the Secretary of State
for the State in question is correct and they should then be forwarded
to the Ambassador or Minister or proper representative of the Latin
American country, wherein it is desired to register the power of
attorney, who will in turn certify to the signature of the Secretary of
State of the United States. Armed with this much verified and sealed
document, your representative is then in a position to sign your name to
the application for the trade mark on his arrival, and to conduct any
further business before the local government arising therefrom. A
separate legal document of this nature is required for each country in
which you propose to protect your trade name.
In case your mark is not registered prior to the departure of your
representative for Latin America, it is wise to pursue the course above
outlined and have him take the matter up personally. It often happens
that by the exercise of judgment and through acquaintances which will be
made, or the prestige of the local attorney whom your agent will retain,
many objections which might seem unsurmountable can be easily overcome
by the man on the ground. Oftentimes too, the mark can be altered in
word or design, so as to evade one already registered without in any
manner affecting your rights.
When one stops to consider that much over 80 per cent. of the population
of these countries are unable to either read or write, and that they are
therefore forced to recognize an article by some distinguishing sign or
character, the great value of an easily discernible, prominent and
effective trade-mark becomes obvious. As a matter of fact the Indians
who make up the greater portion of the purchasing public of these
countries know goods only by brands and ask the storekeeper for them by
their distinguishing names.
Another feature to be most seriously considered in selecting a name for
your article in Latin America is that the Spanish alphabet contains no
“W.” This letter is formed, when it is necessary to use a word employing
it, by combining two V’s,—thus VV. Even to the educated native this
letter is unpronounceable. It is therefore quite obvious that no word
containing it should ever be used for distinguishing any brand. Such a
trade mark, for instance, as “White Wings” instead of attracting custom,
would act otherwise, owing to the extreme sensitiveness of the native in
fearing criticism in pronouncing the words.
Once your trade mark is established, no matter how crude it may be,
never change it. I know of a firm in Baltimore who formerly did an
enormous business in lard with Brazil. The cans which they used for
export purposes were a gaudy blue color and decorated with a pig of
elephantine proportions. For economic reasons they decided to use plain
tin cans, stamping the porker in relief thereon, but preserving his
pachyderm proportions. The result was a package equally as good, as far
as shipping purposes were concerned, with a saving of about two cents on
each one. As a consequence of the alteration the merchant was absolutely
unable to sell the goods shipped in the new container, and when later on
the manufacturers tried to regain the field which they lost, by sending
their former tins, the natives were sure that they were being deceived
and refused to buy these goods also. Competitors who had eagerly sought
this market took advantage of the situation and the Maryland house was
completely shut out of the territory and absolutely lost their business.
Another illustration may serve to impress the importance of maintaining
your trade mark in its entire originality. The Chinese are great
consumers of canned salmon, and our Western fisheries supply much of the
article. One firm in San Francisco had a brand well liked and very
famous among the Celestials. The label on the tin showed a highly
colored salmon having the wrong number of fins, with tail elevated in
the act of leaping over a waterfall down stream, while the background
was filled with tropical palms and cocoanut trees. The trade mark was
simplicity itself, and was recognized with favor all over the Flowery
Kingdom. Higher education however completely removed the brand from the
map. The head of the house had a son just from college, who had been
recently admitted to the firm. He started to clean up things—to be 100
per cent. efficient. His æsthetic and educated eye at once saw that the
label on the brand which had made the firm’s fortune was a living lie.
Salmon were not colored like the rainbow; leaped up stream only; had
less fins and depressed their tails when doing acrobatic feats. And
horror of horrors—no tropical palms or cocoanut trees grew in the
vicinity of the salmon’s habitat. So the label was reconstructed and
made a work of art, scientifically and piscatorially correct, and not a
mere illegitimate combination of wrong details. Then goods with the new
and authentic label were shipped. When they got to China no Chinaman
could be induced to buy them. They became dubious at once of the changed
label. Living in a land of suspicion they knew intuitively that some
designing schemer was falsifying their favorite trade mark. “No samee
chop” was the laconic reply when told that these were the old and well
known goods in a new dress. Argument was useless. The brand was
completely lost to the market. I know one merchant in Hong-Kong who was
forced to throw two car-loads of this salmon into the sea, because space
in his “go-down” or warehouse was worth more than that occupied by
unsaleable stock.
Should you for some reason contemplate altering your trade mark or the
color or shape or size of your container, always take the wise
precaution of consulting the merchant handling your goods abroad and if
possible adopt or be guided by his suggestions. He is on the firing line
and has his finger on the pulse of the buyers, therefore his opinion is
worthy of the most serious attention.
As typical of the high-handed hold ups of the local Dick Turpins, who
have registered trade marks under their own names in Latin America let
me state that I know of two American patent medicine men whose products
have been extensively advertised and are almost household words in the
United States, paying $28,000 and $25,000 respectively for the privilege
of using their own names in one country of South America. Both of these
concerns had been doing business in the United States for forty years
and they afterwards ascertained that the gentlemen (?) who had
registered their names had been waiting patiently for their coming all
the time. A well known mineral water, within the past two years, paid
according to my positive knowledge $2500 for their trade-mark and
considered that they got off remarkably cheap. The price originally
asked was $20,000 and their representative spent three months on the
ground using every possible means to reduce the figures of the original
demand. In the meantime nearly 500 cases of the water in question were
held up by the authorities, who refused to allow them to be landed until
they had the written consent of the native holding the registration
papers. A prominent typewriter company flatly refused to pay the
excessively high sum demanded by the party holding the right to use
their trade mark, reversed its name, and now sells its machine by this
unpronounceable designation. Pages could be filled with similar
illustrations, showing the great importance of properly protecting your
trade mark at the start.
XXV
FINANCE AND CREDITS
The science of foreign banking is the most difficult to understand of
all the departments of modern finance. It requires the experience of
experts whose knowledge must be the most profound and complete and
includes such details as the conditions of the world’s markets, the
existing crops, factory productions, local and extraneous political
affairs, as well as external and internal commerce.
European financiers and merchants soon recognized the importance of
reciprocal banking arrangements between the home countries and foreign
fields and as early as 1862, anticipating the growth of Latin America
and sensing the financial necessities of its future merchants, opened
the London and River Plate Bank, which with its ramifications of
branches and agencies in Argentine, Brazil, Chile, New York, and various
European countries has been a potent factor in developing and
controlling business along British channels. Following the pioneer move
of this corporation, other institutions were organized in England, until
to-day the amount of British capital invested in banks in all of Latin
America is close to $500,000,000.
[Illustration:
Calle Rivàdavia, Buenos Aires
]
Realizing the benefits to be derived from such monetary connections in
these countries and knowing that a bank’s co-operation meant much to
both the buyer and seller and formed perhaps the strongest link in the
chain of foreign commerce with which they hoped to girdle the world,
Germany followed in the footsteps of England and opened a similar series
of institutions in the same territories, even going so far as to have
branches in England, knowing the decided preference for “bills on
London.” Through their offices in the English capital, they succeeded in
keeping as much as possible of the business they acquired abroad in
their own hands, reaping all possible profit from every transaction. In
their turn, and as their foreign trade demanded it, France, Italy, Spain
and Switzerland entered the field but on a much smaller financial basis,
at the same time restricting their activities so as to confine them more
to the home countries and to persons of their own nationalities engaged
in this field of commerce.
Only recently have statutory and business conditions warranted the
advance of the American banker into this sphere of finance. To-day in
Latin America our banking institutions may be found in the Argentine,
Brazil, Panama, Cuba, Santo Domingo, Porto Rico, Mexico and to a small
extent in Haiti. As it becomes apparent that our merchants and those of
other countries require financial organizations to further and
facilitate trade with the United States, additional establishments will
be opened in these lands until ultimately the dollar will be so
enthroned in the estimation of the business world that it need pay no
homage to the Pound Sterling, which up to the present has been Emperor
Supreme in the Realm of Finance.
That this movement is judicious no one familiar with this trade will for
a moment dispute. The ability of the British banks, through their strong
financial arteries, gave them exceptional opportunities to force
business into the hands of English merchants, by obliging the seller of
exchange, for example, in Buenos Aires on New York to pay from 1 per
cent. to 1.5 per cent. more than if he sold on London, or if he desired
to buy, to pay a correspondingly higher price for a draft on New York
than on London. In addition to exerting thus their powers through a high
rate of exchange to drive merchants into British markets, the profits in
the transfer of money incident to the transaction were enormous. The
truth of this statement is vividly apparent when we are told that in
1912, “bills on London” valued at $9,025,000,000 were sold, on every
penny of which a fraction of a per cent. of profit was made by English
bankers.