ADDRESS BEFORE THE TRANS-MISSISSIPPI COMMERCIAL CONGRESS, KANSAS CITY,
MISSOURI, NOVEMBER 20, 1906
Sir Henry Wotton is credited with the statement that "an
ambassador is an honest man sent abroad to lie for the
commonwealth", a definition half in jest but not without a
touch of seriousness. The feeling is making itself manifest
which will soon become universal, that an ambassador is an
honest man sent abroad to represent the people of his own
country to the people of the country to which he is
accredited. Mr. Root, not sent to South America, but going
on his own initiative, was an ambassador in this modern
sense of the word to the Latin American states in 1906; and
upon his return he enlarged the meaning of the function of
an ambassador by representing to his countrymen the peoples
whom he had visited in South America. The three addresses
delivered before the Trans-Mississippi Commercial Congress,
the National Convention for the Extension of Foreign
Commerce of the United States, and the Pan American
Commercial Conference are conceived in this spirit and were
delivered in the performance of a continuous mission.
A little less than three centuries of colonial and national life have
brought the people inhabiting the United States, by a process of
evolution, natural and, with the existing forces inevitable, to a point
of distinct and radical change in their economic relations to the rest
of mankind.
During the period now past, the energy of our people, directed by the
formative power created in our early population by heredity, by
environment, by the struggle for existence, by individual independence,
and by free institutions, has been devoted to the internal development
of our own country. The surplus wealth produced by our labors has been
applied immediately to reproduction in our own land. We have been
cutting down forests and breaking virgin soil and fencing prairies and
opening mines of coal and iron and copper and silver and gold, and
building roads and canals and railroads and telegraph lines and cars
and locomotives and mills and furnaces and schoolhouses and colleges and
libraries and hospitals and asylums and public buildings and storehouses
and shops and homes. We have been drawing on the resources of the world
in capital and in labor to aid us in our work. We have gathered strength
from every rich and powerful nation and expended it upon these home
undertakings; into them we have poured hundreds of millions of money
attracted from the investors of Europe. We have been always a debtor
nation, borrowing from the rest of the world, drawing all possible
energy towards us and concentrating it with our own energy upon our own
enterprises. The engrossing pursuit of our own opportunities has
excluded from our consideration and interest the enterprises and the
possibilities of the outside world. Invention, discovery, the progress
of science, capacity for organization, the enormous increase in the
productive power of mankind, have accelerated our progress and have
brought us to a result of development in every branch of internal
industrial activity marvelous and unprecedented in the history of the
world.
Since the first election of President McKinley, the people of the United
States have for the first time accumulated a surplus of capital beyond
the requirements of internal development. That surplus is increasing
with extraordinary rapidity. We have paid our debts to Europe and have
become a creditor instead of a debtor nation; we have faced about; we
have left the ranks of the borrowing nations and have entered the ranks
of the investing nations. Our surplus energy is beginning to look beyond
our own borders, throughout the world, to find opportunity for the
profitable use of our surplus capital, foreign markets for our
manufactures, foreign mines to be developed, foreign bridges and
railroads and public works to be built, foreign rivers to be turned into
electric power and light. As in their several ways England and France
and Germany have stood, so we in our own way are beginning to stand and
must continue to stand towards the industrial enterprise of the world.
That we are not beginning our new role feebly is indicated by
$1,518,561,666 of exports in the year 1905 as against $1,117,513,071 of
imports, and by $1,743,864,500 exports in the year 1906 as against
$1,226,563,843 of imports. Our first steps in the new field indeed are
somewhat clumsy and unskilled. In our own vast country, with oceans on
either side, we have had too little contact with foreign peoples readily
to understand their customs or learn their languages; yet no one can
doubt that we shall learn and shall understand and shall do our business
abroad, as we have done it at home, with force and efficiency.
Coincident with this change in the United States, the progress of
political development has been carrying the neighboring continent of
South America out of the stage of militarism into the stage of
industrialism. Throughout the greater part of that vast continent,
revolutions have ceased to be looked upon with favor or submitted to
with indifference; the revolutionary general and the dictator are no
longer the objects of admiration and imitation; civic virtues command
the highest respect; the people point with satisfaction and pride to the
stability of their governments, to the safety of property and the
certainty of justice; nearly everywhere the people are eager for foreign
capital to develop their natural resources and for foreign immigration
to occupy their vacant lands.
Immediately before us, at exactly the right time, just as we are ready
for it, great opportunities for peaceful commercial and industrial
expansion to the south are presented. Other investing nations are
already in the field--England, France, Germany, Italy, Spain; but the
field is so vast, the new demands are so great, the progress so rapid,
that what other nations have done up to this time is but a slight
advance in the race for the grand total.
The opportunities are so large that figures fail to convey them. The
area of this newly awakened continent is 7,502,848 square miles--more
than two and one half times as large as the United States without
Alaska, and more than double the United States including Alaska. A large
part of this area lies within the temperate zone, with an equable and
invigorating climate, free from extremes of either heat or cold. Farther
north in the tropics are enormous expanses of high table-lands,
stretching from the Atlantic to the foothills of the Andes, and lifted
far above the tropical heats; the fertile valleys of the western
cordilleras are cooled by perpetual snows even under the equator; vast
forests grow untouched from a soil of incredible richness. The plains of
Argentina, the great uplands of Brazil, the mountain valleys of Chile,
Peru, Ecuador, Bolivia, and Colombia are suited to the habitation of any
race, however far to the north its origin may have been; hundreds of
millions of men can find healthful homes and abundant sustenance in this
great territory.
The population in 1900 was only 42,461,381, less than six to the square
mile. The density of population was less than one-eighth of that in the
state of Missouri, less than one-sixtieth of that in the state of
Massachusetts, less than one-seventieth of that in England, less than
one per cent of that in Belgium.
With this sparse population the production of wealth is already
enormous. The latest trade statistics show exports from South America to
foreign countries of $745,530,000, and imports of $499,858,600. Of the
five hundred millions of goods that South America buys, we sell them but
$63,246,525, or 12.6 per cent. Of the seven hundred and forty-five
millions that South America sells, we buy $152,092,000, or 20.4 per
cent--nearly two and a half times as much as we sell.
Their production is increasing by leaps and bounds. In eleven years the
exports of Chile have increased forty-five per cent, from $54,030,000 in
1894 to $78,840,000 in 1905. In eight years the exports of Peru have
increased one hundred per cent, from $13,899,000 in 1897 to $28,758,000
in 1905. In ten years the exports of Brazil have increased sixty-six per
cent, from $134,062,000 in 1894 to $223,101,000 in 1905. In ten years
the exports of Argentina have increased one hundred and sixty-eight per
cent, from $115,868,000 in 1895 to $311,544,000 in 1905.
This is only the beginning; the coffee and rubber of Brazil, the wheat
and beef and hides of Argentina and Uruguay, the copper and nitrates of
Chile, the copper and tin of Bolivia, the silver and gold and cotton and
sugar of Peru, are but samples of what the soil and mines of that
wonderful continent are capable of yielding.
Ninety-seven per cent of the territory of South America is occupied by
ten independent republics living under constitutions substantially
copied or adapted from our own. Under the new conditions of tranquillity
and security which prevail in most of them, their eager invitation to
immigrants from the Old World will not long pass unheeded. The pressure
of population abroad will inevitably turn its streams of life and labor
towards those fertile fields and valleys. The streams have already begun
to flow; more than two hundred thousand immigrants entered the Argentine
Republic last year; they are coming this year at the rate of over three
hundred thousand. Many thousands of Germans have already settled in
southern Brazil. They are most welcome in Brazil; they are good and
useful citizens there, as they are here; I hope that many more will come
to Brazil and every other South American country, and add their
vigorous industry and good citizenship to the upbuilding of their
adopted home.
With the increase of population in such a field, under free
institutions, with the fruits of labor and the rewards of enterprise
secure, the production of wealth and the increase of purchasing power
will afford a market for the commerce of the world worthy to rank even
with the markets of the Orient, as the goal of business enterprise. The
material resources of South America are in some important respects
complementary to our own; that continent is weakest where North America
is strongest as a field for manufactures; it has comparatively little
coal and iron. In many respects the people of the two continents are
complementary to each other; the South American is polite, refined,
cultivated, fond of literature and of expression and of the graces and
charms of life, while the North American is strenuous, intense,
utilitarian. Where we accumulate, they spend. While we have less of the
cheerful philosophy which finds sources of happiness in the existing
conditions of life, they have less of the inventive faculty which
strives continually to increase the productive power of man and lower
the cost of manufacture. The chief merits of the peoples of the two
continents are different; their chief defects are different. Mutual
intercourse and knowledge cannot fail greatly to benefit both. Each can
learn from the other; each can teach much to the other, and each can
contribute greatly to the development and prosperity of the other. A
large part of their products find no domestic competition here; a large
part of our products will find no domestic competition there. The
typical conditions exist for that kind of trade which is profitable,
honorable, and beneficial to both parties.
The relations between the United States and South America have been
chiefly political rather than commercial or personal. In the early days
of the South American struggle for independence, the eloquence of Henry
Clay awakened in the American people a generous sympathy for the
patriots of the south as for brethren struggling in the common cause of
liberty. The clear-eyed, judicious diplomacy of Richard Rush, the
American minister at the Court of St. James, effected a complete
understanding with Great Britain for concurrent action in opposition to
the designs of the Holy Alliance, already contemplating the partition of
the southern continent among the great powers of continental Europe. The
famous declaration of Monroe arrayed the organized and rapidly
increasing power of the United States as an obstacle to European
interference and made it forever plain that the cost of European
aggression would be greater than any advantage which could be won even
by successful aggression.
That great declaration was not the chance expression of the opinion or
the feeling of the moment; it crystallized the sentiment for human
liberty and human rights which has saved American idealism from the
demoralization of narrow selfishness, and has given to American
democracy its true world power in the virile potency of a great example.
It responded to the instinct of self-preservation in an intensely
practical people. It was the result of conference with Jefferson and
Madison and John Quincy Adams and John C. Calhoun and William Wirt--a
combination of political wisdom, experience, and skill not easily
surpassed. The particular circumstances which led to the declaration no
longer exist; no Holy Alliance now threatens to partition South America;
no European colonization of the west coast threatens to exclude us from
the Pacific. But those conditions were merely the occasion for the
declaration of a principle of action. Other occasions for the
application of the principle have arisen since; it needs no prophetic
vision to see that other occasions for its application may arise
hereafter. The principle declared by Monroe is as wise an expression of
sound political judgment today, as truthful a representation of the
sentiments and instincts of the American people today, as living in its
force as an effective rule of conduct whenever occasion shall arise, as
it was on December 2, 1823.
These great political services to South American independence, however,
did not and could not in the nature of things create any relation
between the people of South America and the people of the United States
except a relation of political sympathy.
Twenty-five years ago, Mr. Blaine, sanguine, resourceful, and gifted
with that imagination which enlarges the historian's understanding of
the past into the statesman's comprehension of the future, undertook to
inaugurate a new era of American relations which should supplement
political sympathy by personal acquaintance, by the intercourse of
expanding trade, and by mutual helpfulness. As secretary of state under
President Arthur, he invited the American nations to a conference to be
held on November 24, 1882, for the purpose of considering and discussing
the subject of preventing war between the nations of America. That
invitation, abandoned by Mr. Frelinghuysen, was renewed under Mr.
Cleveland, and on October 2, 1889, Mr. Blaine, again secretary of state
under President Harrison, had the singular good fortune to execute his
former design and to open the sessions of the first American conference
at Washington. In an address of wisdom and lofty spirit, which should
ever give honor to his memory, he described the assembly as--
... an honorable, peaceful conference of seventeen
independent American powers, in which all shall meet
together on terms of absolute equality; a conference in
which there can be no attempt to coerce a single delegate
against his own conception of the interests of his nation; a
conference which will permit no secret understanding on any
subject, but will frankly publish to the world all its
conclusions; a conference which will tolerate no spirit of
conquest, but will aim to cultivate an American sympathy as
broad as both continents; a conference which will form no
selfish alliance against the older nations from which we are
proud to claim inheritance--a conference, in fine, which
will seek nothing, propose nothing, endure nothing that is
not, in the general sense of all the delegates, timely,
wise, and peaceful.
The policy which Mr. Blaine inaugurated has been continued; the Congress
of the United States has approved it; subsequent presidents have
followed it. The first conference at Washington has been succeeded by a
second conference in Mexico, and now by a third conference in Rio de
Janeiro; and it is to be followed in years to come by further successive
assemblies in which the representatives of all American states shall
acquire better knowledge and more perfect understanding, and be drawn
together by the recognition of common interests and the kindly
consideration and discussion of measures for mutual benefit.
Nevertheless, Mr. Blaine was in advance of his time. In 1881 and 1889
the United States had not reached a point where it could turn its
energies away from its own internal development and direct them outward
towards the development of foreign enterprises and foreign trade, nor
had the South American countries reached the stage of stability in
government and security for property necessary to their industrial
development.
Now, however, the time has come; both North and South America have grown
up to Blaine's policy. The production, the trade, the capital, the
enterprise of the United States have before them the opportunity to
follow, and they are free to follow, the pathway marked out by the
far-sighted statesmanship of Blaine for the growth of America, North and
South, in the peaceful prosperity of a mighty commerce.
To utilize this opportunity certain practical things must be done. For
the most part these things must be done by a multitude of individual
efforts; they cannot be done by government. Government may help to
furnish facilities for the doing of them, but the facilities will be
useless unless used by individuals. This cannot be done by resolutions
of this or any other commercial body; resolutions are useless unless
they stir individual business men to action in their own business
affairs. The things needed have been fully and specifically set forth in
many reports of efficient consuls and of highly competent agents of the
Department of Commerce and Labor, and they have been described in
countless newspapers and magazine articles; but all these things are
worthless unless they are followed by individual action.
I will indicate some of the matters to which every producer and merchant
who desires South American trade should pay attention.
1. He should learn what the South Americans want and conform his product
to their wants. If they think they need heavy castings, he should give
them heavy castings and not expect them to buy light ones because he
thinks they are better. If they want coarse cottons, he should give them
coarse cottons and not expect them to buy fine cottons. It may not pay
today, but it will pay tomorrow. The tendency to standardize articles of
manufacture may reduce the cost and promote convenience, but if the
consumers on the River Plata demand a different standard from the
consumers on the Mississippi, you must have two standards or lose one
market.
2. Both for the purpose of learning what the South American people want
and of securing their attention to your goods, you must have agents who
speak the Spanish or Portuguese language. For this there are two
reasons: one is that people can seldom really get at each other's minds
through an interpreter, and the other is that nine times out of ten it
is only through knowing the Spanish or Portuguese language that a North
American comes to appreciate the admirable and attractive personal
qualities of the South American, and is thus able to establish that
kindly and agreeable personal relation which is so potent in leading to
business relations.
3. The American producer should arrange to conform his credit system to
that prevailing in the country where he wishes to sell goods. There is
no more money lost upon commercial credits in South America than there
is in North America; but business men there have their own ways of doing
business; they have to adapt the credits they receive to the credits
they give. It is often inconvenient and disagreeable, and it is
sometimes impossible, for them to conform to our ways, and the
requirement that they should do so is a serious obstacle to trade.
To understand credits it is, of course, necessary to know something
about the character, trustworthiness, and commercial standing of the
purchaser, and the American producer or merchant who would sell goods in
South America must have some means of knowledge upon this subject. This
leads naturally to the next observation I have to make.
4. The establishment of banks should be brought about. The Americans
already engaged in South American trade could well afford to subscribe
the capital and establish an American bank in each of the principal
cities of South America. This is a fact, first, because nothing but very
bad management could prevent such a bank from making money; capital is
much needed in those cities, and six, eight, and ten per cent can be
obtained for money upon just as safe security as can be had in Kansas
City, St. Louis, or New York. It is a fact also because the American
bank would furnish a source of information as to the standing of the
South American purchasers to whom credit may be extended, and because
American banks would relieve American business in South America from the
disadvantage which now exists of making all its financial transactions
through Europe instead of directly with the United States. It is
unfortunately true that among hundreds of thousands of possible
customers the United States now stands in a position of assumed
financial and business inferiority to the countries through whose
banking houses all its business must be done.
5. The American merchant should himself acquire, if he has not already
done so, and should impress upon all his agents that respect for the
South American to which he is justly entitled and which is the essential
requisite to respect from the South American. We are different in many
ways as to character and methods. In dealing with all foreign people, it
is important to avoid the narrow and uninstructed prejudice which
assumes that difference from ourselves denotes inferiority. There is
nothing that we resent so quickly as an assumption of superiority or
evidence of condescension in foreigners; there is nothing that the South
Americans resent so quickly. The South Americans are our superiors in
some respects; we are their superiors in other respects. We should show
to them what is best in us and see what is best in them. Every agent of
an American producer or merchant should be instructed that courtesy,
politeness, kindly consideration, are essential requisites for success
in the South American trade.
6. The investment of American capital in South America under the
direction of American experts should be promoted, not merely upon simple
investment grounds, but as a means of creating and enlarging trade. For
simple investment purposes the opportunities are innumerable. Good
business judgment and good business management will be necessary there,
of course, as they are necessary here; but, given these, I believe that
there is a vast number of enterprises awaiting capital in the more
advanced countries of South America, capable of yielding great profits,
and in which the property and the profits will be as safe as in the
United States or Canada. A good many such enterprises are already begun.
I have found a graduate of the Massachusetts Institute of Technology, a
graduate of the Columbia School of Mines, and a graduate of Colonel
Roosevelt's Rough Riders smelting copper close under the snow line of
the Andes; I have ridden in an American car upon an American electric
road, built by a New York engineer, in the heart of the coffee region of
Brazil; and I have seen the waters of that river along which Pizarro
established his line of communication in the conquest of Peru, harnessed
to American machinery to make light and power for the city of Lima.
Every such point is the nucleus of American trade--the source of orders
for American goods.
7. It is absolutely essential that the means of communication between
the two countries should be improved and increased.
This underlies all other considerations and it applies to the mail, the
passenger, and the freight services. Between all the principal South
American ports and England, Germany, France, Spain, Italy, lines of
swift and commodious steamers ply regularly. There are five subsidized
first-class mail and passenger lines between Buenos Ayres and Europe;
there is no such line between Buenos Ayres and the United States. Within
the past two years the German, the English, and the Italian lines have
been replacing their old steamers with new and swifter vessels of modern
construction, accommodation, and capacity.
In the year ending June 30, 1905, there entered the port of Rio de
Janeiro steamers and sailing vessels flying the flag of Austria-Hungary,
120; of Norway, 142; of Italy, 165; of Argentina, 264; of France, 349;
of Germany, 657; of Great Britain, 1785; of the United States,--no
steamers and seven sailing vessels, two of which were in distress!
An English firm runs a small steamer monthly between New York and Rio de
Janeiro; the Panama Railroad Company runs steamers between New York and
the Isthmus of Panama; the Brazilians are starting for themselves a line
between Rio and New York; there are two or three foreign concerns
running slow cargo boats, and there are some foreign tramp steamers.
That is the sum total of American communication with South America
beyond the Caribbean Sea. Not one American steamship runs to any South
American port beyond the Caribbean. During the past summer, I entered
the ports of Para, Pernambuco, Bahia, Rio de Janeiro, Santos,
Montevideo, Buenos Ayres, Bahia Blanca, Punta Arenas, Lota, Valparaiso,
Coquimbo, Tocopilla, Callao, and Cartagena--all of the great ports and a
large proportion of the secondary ports of the southern continent. I saw
only one ship, besides the cruiser that carried me, flying the American
flag.
The mails between South America and Europe are swift, regular, and
certain; between South America and the United States they are slow,
irregular, and uncertain. Six weeks is not an uncommon time for a letter
to take between Buenos Ayres or Valparaiso and New York. The merchant
who wishes to order American goods cannot know when his order will be
received nor when it will be filled. The freight charges between the
South American cities and American cities are generally and
substantially higher than between the same cities and Europe; at many
points the deliveries of freight are uncertain and its condition upon
arrival doubtful. The passenger accommodations are such as to make a
journey to the United States a trial to be endured and a journey to
Europe a pleasure to be enjoyed. The best way to travel between the
United States and both the southwest coast and the east coast of South
America is to go by way of Europe, crossing the Atlantic twice. It is
impossible that trade should prosper or intercourse increase or mutual
knowledge grow to any great degree under such circumstances. The
communication is worse now than it was twenty-five years ago. So long as
it is left in the hands of our foreign competitors in business, we
cannot reasonably look for any improvement. It is only reasonable to
expect that European steamship lines shall be so managed as to promote
European trade in South America, rather than to promote the trade of the
United States in South America.
This woeful deficiency in the means to carry on and enlarge our South
American trade is but a part of the general decline and feebleness of
the American merchant marine, which has reduced us from carrying over
ninety per cent of our export trade in our own ships to the carriage of
nine per cent of that trade in our own ships and dependence upon foreign
shipowners for the carriage of ninety-one per cent. The true remedy and
the only remedy is the establishment of American lines of steamships
between the United States and the great ports of South America, adequate
to render fully as good service as is now afforded by the European lines
between those ports and Europe. The substantial underlying fact was well
stated in the resolution of this Trans-Mississippi Congress three years
ago:
That every ship is a missionary of trade; that steamship
lines work for their own countries just as railroad lines
work for their terminal points, and that it is as absurd for
the United States to depend upon foreign ships to distribute
its products as it would be for a department store to depend
upon the wagons of a competing house to deliver its goods.
How can this defect be remedied? The answer to this question must be
found by ascertaining the cause of the decline of our merchant marine.
Why is it that Americans have substantially retired from the foreign
transport service? We are a nation of maritime traditions and facility;
we are a nation of constructive capacity, competent to build ships; we
are eminent, if not preeminent, in the construction of machinery; we
have abundant capital seeking investment; we have courage and enterprise
shrinking from no competition in any field which we choose to enter.
Why, then, have we retired from this field in which we were once
conspicuously successful?