TRADE AND FINANCE
There is a certain element of interest, apart from money-making,
attaching to commerce with that wide and varied group of peoples
which come under the distinctive nomenclature of the Latin American
Republics, and this is perhaps a fortunate circumstance. There is,
as already remarked, an element of adventure about trade operations
therewith which may be said to stimulate and assist enterprise--the
enterprise of buying and selling in those remote and still
half-developed communities.
Your merchant packs and dispatches his wares, marking his packages
with names and destinations whose lettering and pronunciation, though
they may cost him an effort to write or speak correctly, have in them
something redolent of the blue seas and skies of the Tropics, upon
whose shores they will presently be landed, to be handed over--the
attentions of cigarette-smoking and gold-laced Customs officers
satisfied amid much Castilian _chárla_--to the mercies in many cases
of rude but patient muleteers, when, bound on the backs of mules they
will be borne over mountain paths and through tangled jungles to many a
distant interior village of the Pampas or the Cordillera.
And those returning goods which lie upon our quays, fresh from the hold
of the steamer which brought them hither, have their own origin stamped
upon them, and often betray by their aroma their special nature. Who
has not walked upon the docks and remarked with interest the bales of
coffee, the piles of hides, the sacks of ore, the packages of raw cocoa
and other raw material sent hither, the product of industrious natives
of the picturesque _hacienda_ and the mine?
Your commercial traveller, too, if he be a man of parts--and such he
must be to treat successfully in these communities--smells the battle
from afar, and, setting forth again, girds himself thereto, prepared to
exercise that needful show of courtesy which even commercial dealings
require in those lands where Spanish and Portuguese is the medium of
barter or sale, and schools his tongue to speak in their softer accents.
The trade of Latin America is now a much coveted field. The English
merchant, who long held this field, has now to contend with the keen
competition of others. There was, before the war, the German, who by
ability and craft had firmly and remuneratively established himself
therein, and who now seeks to build up the trade edifice which the
punishment of his criminal war has caused to fall. There is the
American, as keen as any, studying by what means he may overcome the
disadvantages which worked against his more successful exploitation
of the Latin American sphere in the past, and thinking, perhaps, to
predominate over his rivals. There are the French, the Italian, the
Spaniard and others, all demanding their share; and coming forward now
is the Japanese, acclaiming his right to whatever he may wrest, either
from the sphere of his competitors or in the finding of fresh pastures.
From whence is this keen desire to profit by the trade of the Central
and South American States? Despite its attendant risks, of distance,
of long credits, of "slow payers" and repudiated debts, it must be
profitable. There must be a demand for goods, a wide and sufficient
market and a margin of considerable balance over costs and expenses.
This is, in fact, the case; but as we shall note, it is possible to
overdraw these attractions of the counting-house and the manufactory.
Latin America is a territory whose wealth and population are growing.
There is an increasing class demanding the things of luxury and
necessity which Europe and North America produce, and which Japan
produces--for it will be unwise to leave these sharp-witted traders
of Asia out of our survey. The Latin American peoples are plastic and
emotional, imitative, pleasure-loving, fond of personal adornment.
They are emerging from the poverty and austerity of the influence of
the Colonial period. Some of them are very wealthy. Their women must
be clad in expensive finery; their homes must be furnished with showy
furniture; upon their tables must lie the delicacies that other nations
enjoy.
So far they have not learned to exercise the ingenuity latent within
them to make these things--although here is a factor we shall
shortly consider--for themselves, and, in consequence, a stream
of articles,--textiles, machinery, clothing, prepared foodstuffs,
jewellery, furniture and all else--takes its way from foreign ports
towards their shores.
It is part of our task here to consider what are the conditions of
successful trading in these growing communities, but before doing so
it will be well to sound a note of caution as to over-exaggerated
expectations of trade and profits in Latin America.
In the first place an unlimited market for exported articles of luxury
and need argues a considerable class of persons capable of absorbing
such.
Compared with other communities, the purchasing class of Latin America
cannot be regarded as very extensive. We have here a score of States or
Republics whose total population perhaps approximates eighty million
souls, all but a small proportion of whom, probably less than ten per
cent., are folk of the poorest class, without purchasing power for
more than the barest necessities or simplest articles of everyday
life--articles which they themselves can produce--the great bulk of
them illiterate Indians or Mestizos. Until the standard of life of
these people be raised very considerably--and there is little evidence
of this uplifting so far--they cannot develop either the power or
the inclination to spend. Their masters--like masters all the world
over--pay them the lowest possible wage, blind to the economic fact
that this parsimony rebounds upon themselves, stinting production,
output, consumption and demand.
Thus it is that the purchasing power of the Latin American population
is a limited one, and markets and warehouses may readily be
over-stocked, stuffed--as has happened on various occasions--with goods
which cannot be sold, or must be sold at a loss.
Especially is this the case with articles of textile manufacture, bales
of cloth, dress fabrics and so forth, when all the large emporiums and
shops have had their shelves loaded and could digest no more. All the
merchants of Spanish American capitals and large towns have experienced
this, and although the cessation of imports during the war emptied the
shelves and disorganized their markets, it cannot be long, given the
keen desire to forward goods from abroad, when the same plethora will
recur.
There is a further condition to consider, of still greater economic
importance.
The tendency of nations in the future is bound to become more and more
self-supplying in the manufacture or production of articles of everyday
consumption. The spread of knowledge, the need for local employment,
the high cost of production and--a very important matter--the high
cost of carriage or transport, which latter, in fact, is becoming
prohibitive in some cases, are all factors making towards the principle
of self-supply.
As an economic principle, this of self-supply is altogether sound, and
its extension to the utmost is advisable and beneficial. It will help
to eliminate waste; it will perhaps work against over-production and
over-competition, both wasteful forces; it will tend to conserve the
native resources of the globe, especially in fuel and raw material,
which, during the "factory age," have been severely drawn upon and
in many instances ruthlessly wasted. To produce a thing where it is
to be consumed, we may repeat, rather than carrying it over seas and
continents from distant producer to consumer, is a sound economic and
sociological principle, so far little recognised.
The growth of such conditions, however, is not likely to be of benefit
to trade in general. One of the first branches of manufacture to be
affected thereby is the textile industry of Britain and other lands as
regards the export trade. It has been shown in these pages that the
Latin American countries, in some instances, have now set up their own
mills and are manufacturing their own textiles. This is specially true
of such countries as Brazil, Mexico, Argentina and others, where the
production of "piece goods" and other textiles and articles of clothing
is being extensively carried out with marked success, and with a
corresponding limitation of import. These mills are often worked by
water-power, and so are free from the difficult and expensive element
of fuel. Labour, moreover, is much cheaper, even if less efficient,
than abroad.
The same condition is growing as regards other manufactured articles,
and there is no physical reason why the whole of the Latin American
States should not manufacture many articles for their own requirements
which at present they import. They possess within their own shores all
the necessary raw material, except in some few instances.
But do they possess the skill to make these articles? There is little
doubt that the Latin American folk, the artisan, the mechanic, the
craftsman, are learning the methods of manufacture in many fields.
They may not be an inventive folk, but they are an imitative folk, and
possessed withal of great patience and painstaking ingenuity.
These last-named qualities are revealed in their ancient native
industries. Any one who takes the trouble to examine the examples of
these old crafts will often be struck by their beauty and ingenuity.
In textile work they excelled. The old tapestries of the Inca and the
fabrics of the Aztec, and of the Queches of Guatemala, of the Mayas,
and, in brief, all others of the cultured or semi-cultured early folk
of Spanish America reveal this, and examples are to be seen in the
museums. The Indians of the Andes to-day make their own "tweeds" of
sheep or llama wool; also their own felt hats. They weave ponchos
of Alpaca wool that are waterproof, so closely are they hand-woven.
They dyed these things in beautiful native patterns (often of much
archæological interest) with native dyes which in some cases were
superior to the imported synthetic dyes of Europe. As a matter of fact,
it is unfortunate from a true economic and artistic point of view that
these native industries should be displaced by outside products.
Again, such articles as the Panama hat of Ecuador and Colombia show of
what the Indian is capable; as did the beautiful jewellery, in precious
metals and stones, of the ancient culture-area of Central America,
or the exquisite vessels and objects of adornment of the Incas, some
of which still exist. The powers in stone-working are seen by the
remarkable structures scattered over the whole Spanish American world,
revealing the use of the chisel.
There is, however, no need here to labour this argument, but it is more
than possible that a marked growth of Latin American craftsmanship will
come to being again, under the stimulus of modern needs.
On the other hand, it is not to be supposed that the foreign
manufacturer is likely immediately to find the ground cut away from
under his feet. There are numerous articles of commerce which the Latin
American folk do not, and possibly cannot, make for themselves, or not
yet.
Among these matters is the important one of machinery. So far,
throughout the length and breadth of the Latin American States, not
a single locomotive has ever had its birth, and that in a land where
the locomotive is so essential a factor. Nor is bar iron or steel rail
rolled anywhere here (except possibly a little experimental work in
Mexico and elsewhere). In fact, the manipulation of iron and steel has
not yet come to being.
When we take note of the mines to be worked, the cotton, sugar and
other mills and factories to be equipped, the railways to be built
and maintained, the demand for motor-cars, the call for agricultural
machinery, the use of household utensils of iron and steel, the wire
fencing and a host of articles, it is evident that the field of trade
here will not yet be cut off.
In the superior textile again, skill has not yet reached a capacity
to supply all wants. The growing requirements of people to be clothed
by the best class of goods will doubtless long keep up the imports of
such, unless governments institute absolutely prohibitive tariffs--a
matter upon which it is impossible to speculate.
It would be out of our province here to deal in detail with the various
articles of trade in the Latin American field. There are recent sources
of such information which fill all requirements.[41]
There is an important condition in connection with the conduct of
business in Spanish America. This is, in the more leisurely and
courteous bearing observed in such transactions, and the commercial
traveller or his chief is well advised to study it.
The merchant or business man here will not be hustled or too
brutally--in a commercial sense--approached. A friendly chat, inquiries
as to matters of mutual interest, or upon current events, or regarding
the members of each other's family, or other subjects general or
politely personal, paves the way to the more concrete business of the
occasion.
"Personality" counts for much in Spanish American relations, not only
in society but in business. The Spanish-speaking people have a word
for which in English we have no exact equivalent; that is the word,
or adjective, _simpatico_ (or the feminine form _simpatica_). It does
not necessarily mean exactly "sympathetic" or "personal magnetism"--to
use the latter rather stupid English term. It means intuitive,
comprehensive. A person who is _simpatico_ may command much greater
attention than one who is not.
It is to be recollected that the Latin American man of any position is,
or aims at being, a _caballero_, a gentleman, and it is to be remarked
that this is a pleasing and valuable ideal, which might well be more
closely cultivated amid the often boorish methods of Anglo-Saxondom.
Thus your commercial traveller should accept the proffered cigar or
cigarette--there is generally such an offer--of his desired client, or
offer one himself, and not attempt to come immediately to the point
or instantly thrust his wares beneath the nose of the person upon whom
he calls, hoping to make an immediate sale and rush out to perform the
same operation on perhaps a rival dealer next door.
That "Time is money" has also its rendering in Spanish: _Tiempo
es oro_, and it does not follow that business will be delayed by
diplomatic methods. Yet this habit of courtesy should not merely be
acquired as a trick. Business is sometimes carried through in a quicker
way than in Europe or the United States, and the term the "land of
_mañana_" has often been over-applied, at least as regards business
transactions.
Again, it must be recollected that the Ibero-American--with a touch
perhaps of Orientalism--does not always like to give a direct "yes"
or "no." In the latter case, perhaps, he does not wish to hurt his
visitor's feelings, and may leave him to infer a negative from the
general conversation. This should be understood, and a direct reply not
sought.
On the other hand, this method of courtesy does not necessarily
apply to all operations of dealing. The rudeness of the shop-hand in
Latin American towns is a matter of note often; his brusqueness and
incivility. It is possible that this may arise in part from the custom
of haggle; that is, of not having fixed prices for articles sold, and
the customer, especially women, enter and argue to a wearisome length
often, in obtaining a reduction, or finger the goods to such an extent
as to exasperate the whole race of counter attendants. Be it as it may,
courtesy by the shopkeeper is not a marked condition here. There are,
of course, exceptions.
We shall also remark a further condition. The Latin American is
generally more urbane in his conduct than the Spaniard. The pure
Iberian is often a very direct fellow, blunt of speech and behaviour.
Often his speech, when excited, is interlarded with the most tremendous
oaths.
These matters of deportment are not necessarily intricate, and they
should not be overdone. Frankness and sincerity always appeal. The
Spanish American wishes to appear to be direct. He will tell you he is
so. _Yo soy franco, señor_--"I am frank," he will frequently exclaim
in the course of any argumentative conversation, or, _Vamos á ser
practicos_--"let us be practical." It does not, of course, follow that
he is always either frank or practical. Often, however, he is.
The Englishman generally finds that prejudice is in his favour in these
circles. The _Ingles_ has a name for fair and straightforward dealing
(which Heaven grant always is and always may be deserved!). Here we
have the well-known and oft-quoted aphorism of the _Palabra de Ingles_;
that is, the "word of an Englishman," which is reputedly held to be as
good as his bond. He is supposed to carry out, without chicanery or
mental reservation, what he has undertaken to do. His goods will be
up to the sample; his fulfilment as his promise. He will often find
this national trait appraised here, and often with disparagement of the
methods of the traders of other nationalities, and this not merely as a
form of subtle flattery.
Whether this high standard is always now kept, under the pressure of
increasing competition, it may be left to others to determine.
Again, the excellence of British manufacture is generally looked upon
as a foregone conclusion.
Cheap goods, such as textiles, however, in the face of this
competition, wherever they come from, are probably often very free from
reproach, and an enormous quantity of cheap rubbish must find its way
on to the backs of the poorer wearers in these lands, of British and
other manufacture.
Against the British manufacturer there is always the old outstanding
accusation that he does not sufficiently regard the tastes or needs
of his clients overseas, but adopts a "take-it-or-leave-it attitude,"
and this is a point writers on the subject generally bring forward.
Doubtless it has been somewhat exaggerated.
Again, another theme is that of disregard of the important matters of
packing, both as to external appearances of boxes and packages which
are to be exposed for sale and the packing for means of transport such
as the exigencies of the road call for here.
Many writers on British trade take it upon themselves to disparage
their own methods and institutions, but this has been overdone. If
there are defects in British methods, they occur equally in those of
the traders of other nations. However, self-disparagement is a British
characteristic in many things, and may readily be discounted.
The subject of finance, credits and so forth are matters which always
come up for discussion here. Long credits are often necessary,
especially in the case of the smaller merchants or dealers of Latin
America, and in the smaller towns, where these have not capital for
quick payments and the goods have to be sold before a return is reaped.
There may be bad debts often, or dishonest customers, but as a rule
the purchasing store-keeper is often kept in the path of rectitude by
the knowledge that dishonesty will result in cutting off his supplies
sooner or later, with consequent ruination.
To return to business. It is an error to suppose that the Latin
American is lacking in enterprise, for the reverse is generally the
case.
Again, the folk of these lands we are here treading are exceedingly
assimilative of new ideas and novelties. They like to be thought
"up-to-date." New appliances and luxuries catch their fancy.
Motor-cars, gramophones, cinematographs and so forth are eagerly
purchased. Were the roads better, bicycles would have had an enormous
vogue, and may yet have. Aeroplanes are likely to be very prominent
things in the future. Anything new, fashionable or pleasurable is
regarded with favour, from notepaper to flying machines.
It is, however, noteworthy that the deeper refinements of life are
less considered. Thus the Latin American folk are not great readers
of books or purchasers of pictures. Nor have they a great love for
antiques. It is true that books published in Spanish (or Portuguese)
are generally limited in range and miserably printed and bound, and
it is probable that a foreign publisher who should undertake to cater
to a growing literary appetite here would find in it a remunerative
business. Something, of course, has been done in this way, especially
in Argentina, where imports of books from Britain have increased
rapidly.
As to pictures, gaudy oleographs and calendars often do duty for these.
But the love of pictures for themselves seems to have diminished at the
present time among all peoples, even in Anglo-Saxondom: perhaps it has
fled before more material delights; perhaps it may return.
The British Governmental attitude towards trade abroad--and Latin
America naturally takes an important place--somewhat halts between
two opinions, as concerns official representation. Shall British
representatives be mainly diplomatic, ambassadorial, or shall they
also descend to that less distinguished field of commerce? Shall
the atmosphere of the Minister Plenipotentiary or that of the more
commercialized Consul be paramount?
England--Britain--is constantly upbraided by traders and trade-writers
on account of her alleged supineness with regard to foreign trade. We
are accused of not doing enough, of not having sufficiently active
representatives abroad, of not attending to the wants of foreign
purchasers, of not knowing their languages, of not sufficiently
pressing our wares upon them, and so forth.
But when all is said that can be said upon this subject, it must be
recollected that Britain has had a very prosperous day as the workshop
of the world, and has greatly enriched herself in foreign markets.
There seems little doubt that she is disposed to rest somewhat on her
laurels now. Apart from this, there are physical causes why it is
difficult for Britain to pretend to hold predominance here, as well as
sociological reasons. A steady export trade should be aimed at, not a
feverish attempt at perpetual predominance.
We turn now to the important matters of foreign investment and finance
in these widely diversified lands of Latin America.
The statistics of finance inform us that, among the oversea enterprises
of the British capitalist, more than a thousand million pounds
sterling are invested in stocks, bonds and shares in undertakings in
the Republics of Latin America; securities quoted upon the London
Stock Exchange. There are further enterprises not so quoted. From this
considerable sum a steady stream of dividends flows to Great Britain,
amounting to over eighty million pounds per annum.
In these statistics we have an indication of the great activity that
has taken place in the past by the British individual, or joint-stock
company in this field, from Mexico to Peru or Chile, from Venezuela and
Colombia to Brazil or the River Plate.
Wherever we journey in Spanish America, we shall find our countrymen
engaged in some important enterprise or industry. If we ascend to the
high plateau of Mexico it will be upon an English owned and operated
railway, from the coast of Vera Cruz, which we have reached upon an
English steamer. If we enter the rich mines here we shall see English
capital extracting gold and silver, which flows to London, and other
minerals too. If we survey Mexico City, we shall see that it and its
lake-basin is drained by a wonderful canal and tunnel, a work which the
Aztecs and the early Spaniards tried to perform but failed in, and do
we cross from sea to sea over the Tehuantepec Isthmus it will be upon a
railway rebuilt, with fine harbours at each approach--a competitor, in
some respects, with the Panama Canal--by English engineers and money,
whilst the electric lights and trams of the capital are nourished from
the same source. (The tramway system, indeed, from the _centavos_ of
the travelling Mexican poor, pay or did pay the working costs before
nine o'clock in the morning, leaving the rest of the day for the
dividends.)
In South America we can scarcely take train in any of the numerous
Republics without travelling over rails laid down by the genius
of Albion, or without helping, in the purchase of our ticket, to
contribute towards the exchequer of the British company which built or
controls it. When we rise from the Spanish Main to the mountains of
Venezuela or Colombia, it is upon lines made by British brains and
purses; or when we go up from sea-level to the dizzy heights of the
Andes of Peru or Chile, it is behind the iron horse whose trajectory or
working has been rendered possible by Britain. The wonderful network
of rails that traverse Brazil and Argentina, and bring forth to the
seaboard the product of corn, cattle, coffee and all else, were built
with gold from Lombard Street, as were the docks and harbours whence
they discharge their wealth of products from the hinterland. Again,
if we penetrate the dark reaches of the Amazon, England is giving gas
light, electric light, water supply, dock service and much else there;
and we shall have ascended that mighty stream on an English steamer.
Nay, some of the rubber of these forests is extracted by the power of
British gold. Banks are largely British.
England, in brief, has performed an enormous service in the New World
with her money. The United States built itself up on British capital,
so that every Republic in America has had cause for gratitude for the
use of English gold. England is not a gold-producing country, but
nevertheless a stream of gold has proceeded from her shores to nourish
the most distant lands.[42]
FOOTNOTES:
[41] Such, for example, as _South America as an Industrial Field_
Koebel, in the South American Series.
[42] Excellent work as regards British trade and general relations was
done by the British Diplomatic and Commercial Mission to South America
in 1918, under Sir Maurice de Bunsen and Mr. Follett Holt; a Report of
which was issued: and some return missions have been sent to England.