I have asked many of these young fellows how many years they have

been in the country, and how many more they mean to remain. Some

have been quite new arrivals; others have been, perhaps, serving

in Mexico, Costa Rica, Guatemala, and other of the Latin-American

States; but none of them, apparently, think of going home, even

upon a temporary visit, in less than ten years, and to all

appearances they are perfectly happy to be where they are, not even

saving money, but building up a trade connection for themselves

or for their employers, as already indicated--in most cases their

relations--which may one day prove valuable.

I may say that, although these same young Germans live quite like

the people of the country, eating the same food, occupying the same

kind of houses, rising and retiring at the same primitive hours, and

not infrequently even marrying into their families, they maintain

all the cleanliness of their own lives and habits, and are always

as orderly and as well-conducted in all relations of life as any

self-respecting young man need be.

While it is true that the Germans do not succeed, any more than

North Americans, in ever endearing themselves to the inhabitants

of these countries of the South, they do most assuredly earn the

respect and the esteem of their neighbours, and succeed in living

for many years in their countries, surrounded, as is found the case,

by occasional revolution and internecine troubles, without in any

way becoming involved in the vortex.

This cannot be truthfully said of the average American, who comes

down either upon a business or a pleasure trip; the political

affairs and the border complications seem to have a peculiar and

dangerous fascination for him, and, as in the case of the celebrated

"Little Jack Horner" of nursery memories, he must have a finger in

the pie. As often as not, the "plum" which he at length succeeds

in pulling out proves to be a fairly indigestible one, and he

is compelled to drop it and make a bolt from the kitchen rather

precipitately, too.

It would appear, from the statistics which are given in a previous

chapter (see p. 106), that Great Britain in 1909 led in the net

value of the country's foreign imports. The figures, however, must

not be read in the light of competition only, but in the much more

disturbing aspect of the closeness of their totals to the completion

attained by the most serious rivals to the United Kingdom--namely,

the United States and Germany. The returns for 1910 prove this.

Comparison has been made with the figures of 1904 (which were

selected for the special purpose referred to), and I now desire my

readers to glance at some of more recent date.

For the whole of the Republic the foreign importation of merchandise

for 1908 was as follows: Packages = 267,791; kilogrammes =

18,830,121. Value: $4,240,561.21. Out of all the different countries

concerned, we are interested for the moment in three only--namely,

Great Britain, Germany, and the United States of America, and these

returns stand as follows:

+---------------+-----------+---------------+-----------+

| | Packages. | Kilos Weight. | Value. |

+---------------+-----------+---------------+-----------+

| | | | $ |

|Great Britain | 42,613 | 3,740,138 | 1,539,046 |

|Germany | 29,605 | 2,542,732 | 442,860 |

|United States | 146,857 | 9,765,056 | 1,287,452 |

+---------------+-----------+---------------+-----------+

Looking into the details of the returns, it seems that British

textile and cotton manufactures have been the most vigorously

attacked by both the German and the American competing houses. The

shares respectively for 1909 were as follow:

Total Value.

Great Britain $957,172.07

United States 451,692.72

Germany 57,376.64

In woollen and cotton textile goods there is not any further

improvement in the trade of the United States, the 1910 figures

being $300,075; but those of Germany stand at $71,080, as against

$763,171 for Great Britain. From this it will be observed that in

this respect they "who were last may yet become first," a very

significant fulfilment of the Biblical prognostication so far as

Great Britain is concerned. The chief articles of export of "other

countries" to Salvador are iron and hardware, $73,447.96; sacks for

coffee, $92,937.38; and various articles, $132,660.04. Germany is

represented by an immense number of different articles, but none

of them in net value touch very high figures. The most important

is hardware, which is represented by a value of $69,092.25, while

linen goods stand at $57,376.64, as against the British total of

$957,172.07.

A somewhat different kind of trade is done in this class of goods

to that most general, for instance, in Guatemala. There the natives

demand a cheaper and more flimsy kind of material. In Salvador

they would appear to prefer a somewhat higher class of goods and

of a rather more sober pattern. The Germans are catering actively

for this market, and although, as will be observed, they have a

very long headway to make up before they approach to within the

region attained by either the British or the American figures, the

persistency with which the Teutons are pursuing these Latin-American

markets makes their competition a serious factor for the future (see

p. 149).

In regard to exports from the port of Acajutla, a few words will

suffice to explain the situation. France stands first as the

recipient of the Republic's products from this particular port. The

figures for the first half of the year (1909) show that France took

coffee to the value of $749,946, Germany came next with $667,304,

while the United States stood third with $506,064. Great Britain did

not figure at all in the trade of Acajutla; but from the port of

La Libertad the United Kingdom took goods to the value of $106,043

in coffee, against $127,740 by Germany, $311,093 by France, and

$124,700 by the United States.

$874,958.32 represents the total value of the coffee shipped from

the port of La Libertad for the six months of that year. This

business with England must have been carried on in foreign bottoms,

for, as mentioned elsewhere, a British vessel had not been seen

in the port of La Libertad for some years, a fact vouched for by

the Comandante of the Port, who keeps the records of all ships

arriving and departing. The values, it is as well to mention, are

given in gold dollars, the equivalent in Salvadorean dollars being

$2,186,495.80. In regard to the Republic's trade generally, the

countries with which it does its export business stand in the

following order of importance: France, Germany, United States,

Italy, Austria, Great Britain, Spain, and "other countries."

Reference may be made to the trade done in the article known as

balsam, which is a product peculiar to Salvador. Hamburg is the

principal market for the article, and its quotations fix the price

for the world. Within the last two years the price has fluctuated

from 12 to 22 marks per kilogramme--say $2.86 to $5.24 per 2.2

pounds. The price at the beginning of 1909 was 14 marks--say, $3.33

per kilogramme. The method of obtaining the balsam is very curious,

and is described at some length in Chapter VII.

Manufacturers of agricultural implements and machinery for the

Latin-American markets should remember that it is unnecessary and

undesirable to make the articles in such a manner as to last for

ever. While durability and substantiality are no doubt excellent

features of machinery of all kinds, and in connection with

British-made goods have always been much depended upon, it is quite

possible to carry the virtue too far. It must be borne in mind that

out "in the West" the same ideas do not prevail as at home, and in

any case these countries are still in the experimental stage, when

new industries are continually superseding the old. The Americans

and the Germans both understand this, and consequently they are

ousting the British-made heavier goods from the market.

What are required are light ploughs, watering-carts, hay-rakes,

seed-sowers, and similar machines, but of a light yet strong

character. The question of freight comes in very seriously,

since not only is the steamship charge to be considered, but the

frequently long overland journey upon mule-back. By the time

that the implement or machine has reached its destination, it

frequently costs double the invoice price. All easily detachable

and duplicated-part machines are very much more in demand than

other kinds, and they are but seldom found in Central America of

British manufacture. But there is absolutely no reason why they

should not be made, and as freely sold, as the American classes,

which are to be seen displayed--painted in all the gaudy colours of

the rainbow--in practically every hardware store in Latin-America.

No small part of the dealers' profits, either, is derived from

supplying duplicate parts, due to losses and breakages. The

purchasers seldom, if ever, complain of breakdowns, and they prefer

discarding their latest purchase for a new, and maybe an untried,

invention, which is advertised to do all the wonderful things which

the late implement did, in addition to numerous others which it

could not do.

Small pamphlets, printed in Spanish, showing, with the aid of

drawings, how the machine or implement may be detached, cleaned,

repaired, and again put together, are also to be recommended. I

would even suggest sending out with each article a brightly-coloured

illustration of the machine in operation, since purchasers are

very fond of hanging such upon their walls; and in the absence

of any other picture I have often seen the flaring advertisement

of some totally different machine, such as a plough or a reaper,

occupying a conspicuous position upon the house-walls of a farmer's

establishment. If he were sufficiently fortunate to possess an

actual illustration of his own particular machine, I think that he

would gladly endow it with a special frame, and thus advertise it

freely for the benefit of the manufacturer. It is, therefore, well

worth while for dealers to give such matters their attention. The

initial cost is very small, while the corresponding advantages are

undoubtedly great. At least our American and German competitors

think so, and have the courage of their opinions.

The present chapter could hardly be more usefully completed than

by adding the latest trading returns to hand from the Republic--up

to July, 1911--which provide the figures for the whole of the year

1910. These show that what has been so long threatened has actually

occurred--Great Britain has lost to the United States its first

place upon the Imports List; while upon the Exports List, it stands

fifth. Here let the statistics speak for themselves:

+------------------+-----------+-----------+-----------+----------+

| | 1908. | 1909. | 1910. | |

+------------------+-----------+-----------+-----------+----------+

|Imports: | $ | $ | $ | |

| United States | 1,287,452 | 1,344,316 | 1,346,598 | |

| Great Britain | 1,539,047 | 1,438,614 | 1,165,993 | |

| +-----------+-----------+-----------+----------+

| Great Britain | +251,595 | +74,298 | -180,605 | |

+------------------+-----------+-----------+-----------+----------+

|Exports: | $ | $ | $ | $ |

| United States | 2,046,398 | 1,838,302 | 2,280,156 | +441,854 |

| Germany | 1,038,305 | 955,888 | 1,584,627 | +428,739 |

| France | 1,417,428 | 1,146,316 | 1,097,118 | -49,198 |

| Italy | 374,434 | 440,163 | 609,674 | +209,511 |

| Great Britain | 449,167 | 440,359 | 480,737 | +40,278 |

+------------------+-----------+-----------+-----------+----------+

Thus, from having a _surplus_ of trade in Salvador over all other

countries in 1909 to the value of $74,298 (as against $251,595

in 1908), we show a _loss_ of $180,605 in 1910. While the United

States, Germany, and Italy all showed an increase in their purchases

from Salvador of considerable amounts, Great Britain records the

contemptible advance of $40,278! We may well echo Syrus's maxim:

"_Heu, quam difficilis gloriæ custodia est!_"

CHAPTER XII

British fire apparatus--Story of a British installation--Coffee

and sugar machinery--Cane-mills--Fawcett, Preston and Co.'s

installations--High reputation enjoyed by British firms--United

States coffee equipment--German competition--Methods of German

commercial travellers--Openings for British trade--Effect of

Panama Canal--A libel upon Salvador manufacturers--Salvador

Chamber of Commerce.

[Illustration: VIEW OF THE PICTURESQUE TOWN OF MARCALA.]

There are, on the other hand, certain classes of machinery and

appliances of British manufacture which can be met with not only

in practically every part of the world, but which no amount of

foreign competition would seem to seriously affect. Among these

specialized manufactures may be included, coffee and sugar machinery

and fire-engines. The latter stand, indeed, quite alone as effective

and universally known features of British construction, and I do not

in any way exaggerate when I state that in no part of the world to

which I have been--and that is equivalent to saying "everywhere upon

the face of the habitable globe"--have I failed to see some kind of

fire-extinguishing apparatus, old or new, of British manufacture.

In the Central American States the reputation of such appliances

stands very high, as was exemplified at the time of one of the

several serious conflagrations which have afflicted San Salvador,

and which occurred some four years ago, when a great portion of the

capital city was for a time in jeopardy of destruction. One of the

principal churches was actually destroyed, and this so affected

the people that the Government determined to invest in fire-engines

and necessary appliances.

As soon as this determination became known, the officials were

inundated with the catalogues of manufacturers from Germany, France,

the United States, and other countries. An emissary from America

even came down personally from the States to canvass for the order;

but the reputation of the British fire-apparatus was strong and

its general effectiveness was generally recognized, so that the

Government did not hesitate in its decision to follow Mr. Mark J.

Kelly's advice to award the order to a Greenwich firm. A larger type

of the Merryweather steam-engine, with a very complete outfit for

the firemen, has since been added, through the instrumentality of

the same gentleman.

Further proof of the utility of the English engines was afforded

later on, when yet another serious and disastrous fire occurred

in San Salvador, the work, it is believed, of an incendiary, with

the result that an entire block of fine buildings, including the

National Theatre, was burned to the ground. It is admitted by

everyone that but for the services rendered by the fire-engines,

and not a little also by the heroic work of the local brigade, the

greater portion of the city, in all probability, would have been

destroyed. It is the intention of the authorities, I understand, to

further increase the effectiveness of the service by ordering more

hose and additional salvage appliances.

In conversation with the former President of the Republic, General

Fernando Figueroa, upon one occasion, he paid an eloquent tribute

to the excellence of British machinery of all kinds. He has had,

it may be mentioned, some experience of the manufactures of other

countries as well as of our own. He mentioned to me the fact that

he recollected at one time that many British manufactures, not only

of machinery, were to be met with largely in Salvador, and that the

names of several of the large importing firms and store-keepers in

many of the other cities of the State were British. To-day there

are but five or six English houses to be found in Salvador. On the

other hand, as previously pointed out, one meets with many German

names, these ubiquitous and enterprising trade rivals having firmly

established themselves in the Republic, as they have also succeeded

in doing in Guatemala and Costa Rica.

In regard to coffee and sugar machinery, of which mention has

already been made, this trade is split up between the two houses of

John Gordon and Co., of London, and Marcus Mason and Co., of New

York. Both make excellent apparatus for the purpose of treating the

berry and cane, the Germans in this particular direction finding but

very little favour even among their own people. I visited several

of the large _fincas_ or estates, where both coffee and sugar are

treated, and in all such instances the properties were either owned

or being managed by Germans. In all cases the machinery was either

British or American, and in a number of instances both were freely

employed.

Upon inquiry, I was informed that the sugar machinery turned out by

German manufacturers in the majority of cases is too complicated

and delicate for practical purposes, and that it needs an expert

mechanician--a decidedly _rara avis_ in this part of the world--to

understand the apparatus or to carry out the necessary repairs

when things go wrong. In all of the factories visited by me the

equipment, with the exception of the boilers and some of the

vertical donkey-engines for feeding them, came either from Great

Britain or the United States of America.

One excellent testimonial to the superiority of British machinery

was afforded at the Laguna Finca, belonging to Herr Fédor Deininger,

who, as may be assumed from his name, is a German proprietor. Here I

found a complete sugar-manufacturing plant, consisting of cane-mill,

liquor pumps and tanks, defecators, juice-heaters, clarifiers and

evaporators, steam eliminators, filters, and, indeed, everything but

the centrifugals, which alone were of German construction, had been

provided by the Liverpool firm of Messrs. Fawcett, Preston and Co.,

Limited, of the Phoenix Foundry. The date upon this installation

is "1867"; and Herr Deininger, the present owner of the factory,

who acquired it from his uncle, Herr Bogen, some twenty years ago,

declares that it is quite unnecessary to replace the installation,

"as it is still working most satisfactorily." Of this I, indeed,

assured myself by personal observation. I venture to believe

that this is an altogether unique instance of a sugar-machinery

installation, erected over forty-three years ago, and which has

been in constant operation during that time, day by day, Sundays

included, being found in a sufficiently sound and workable condition

as to need nothing more serious than an occasional replacement of a

small part or a temporary stoppage for overhauling.

In Salvador there are several cane-mills of quite recent

construction throughout, and in most instances these are the

manufactures of Messrs. Fawcett, Preston and Co., Limited, who,

it would appear, have erected similar installations in many other

parts of the world, since I have come across them in Southern

Brazil, Cuba, India, and the Argentine. The cattle-mills, which are

peculiarly adapted for this country, where oxen are used everywhere

and for all purposes of road-hauling, are made with three horizontal

rolls, secured upon strong gudgeons, running in adjustable gun-metal

bearings, supported and held in place by two massive head-stocks

bolted to a strong bedplate. This latter extends under the rolls

from one side of the mill to the other, serving as a juice-pan

attached to it. There is also fitted an upright shaft, turning in a

footstep secured to the mill bedplate, and in a pedestal bolted to

an entablature, supported by four pillars, which form part of the

head-stocks. To this upright shaft is keyed a bevel-wheel, which

gears into another keyed upon the toproll gudgeon. In addition to

the bevel-wheel, the shaft is provided with ironwork for carrying

wooden steps for the hitching of oxen, horses, or mules.

Of recent years Messrs. Fawcett, Preston and Co., Limited, have

introduced an improved type of Rousselot cane-mill, by which the

returner-bar and knife are reduced to the smallest dimensions by a

special patented arrangement of bringing the side-rolls as close

together as the top cap-bolts will admit. These latter are inclined

vertically to one another, and the effect of this arrangement is

to reduce the width of the knife, and consequently the friction

of the cane passing over it, and also economizing the power and

consumption of fuel necessary to drive the mill. The special feature

of the Rousselot patent is to be found in this improvement--that is

to say, that the strain is taken off the cast-iron head-stock by

through bolts, which secure against the breakage of the head-stocks.

Greater ease is also found both in the erection and the taking

down of the mill. These rolls are made of a special mixture of

cast-iron, selected as the best to withstand the wear and tear to

which they are necessarily subjected. The gudgeons are of the best

hammered scrap-iron, and are forced into the rolls by means of

hydraulic pressure, while, in addition, the rolls are keyed on to

the gudgeons. All the head-stocks, mill-bottom, and crown, are of

cast-iron.

Yet another improvement which this firm have introduced into their

sugar machinery is in connection with the juice-heaters. These

now consist of three cylindrical heaters of a compound type, with

Chapman's patent steam separator, and which are fixed horizontally

side by side, being so connected that while any one of the three is

out of use for cleaning or repair, either of the other two can be

worked as a high-pressure or finishing heater, and the other as a

low-pressure heater, thus economizing considerable fuel. The steam

separator worked in connection with these heaters economizes about

8 per cent. of the steam required in the multiple effect apparatus

for evaporating the cane juice, since by this arrangement the steam

that would otherwise flash off from the superheated juice into the

atmosphere and be lost is collected and conveyed to the heating

drums of the multiple effect, and so utilized for the evaporation

of a corresponding amount of water from the juice. Improvements are

also to be observed in connection with the subsiding defecators, the

steam eliminators, bag-filters, the apparatus known as the "Coffey"

still.

Reference has been made above to the vogue which British-made

coffee machinery, and especially that of Messrs. John Gordon and

Co., of London, has had in the Latin-American States. So far as

Salvador is concerned, I understand that this class of product

stands in serious danger of being ousted from the market by American

competition. While it is generally admitted that none better than

British machinery for coffee, rice and cocoa can be obtained, the

very success of these manufactures seems to an extent to have

resulted in a slackness to obtain further orders, and the field,

thus neglected, and always most carefully watched, is being occupied

by the Americans. I am informed, for instance, that to-day fully

65 per cent. of the coffee machinery to be found in Salvador is of

American make, and that fresh orders are being despatched frequently

for further supplies. I also learn that no British traveller in

this class of machinery has been seen in Salvador for fully five

or six years, while, on the other hand, the largest of the United

States manufacturers has an agent, in this case a young German

speaking Spanish fluently and possessing a very pleasant manner,

who is continually travelling up and down the country, visiting

the different _fincas_ at which, apparently, he is always welcome,

submitting drawings, plans, and estimates for improvements and new

installations.

Moreover, this young man is an expert mechanic, and most skilful

in effecting repairs and alterations to machinery and plant

installations. It is not at all difficult to understand how such

an individual makes headway with the kind-hearted and hospitable

Salvadorean estate owners, and how he succeeds, not alone in

obtaining orders from them for their coffee and other machinery, but

in introducing German manufactures of other kinds; for your German

traveller is always open for business, and, indeed, appears to live

for very little else. Thus, it would seem, unless some "move" is

made by British manufacturers of coffee and rice machinery in this

part of the world, at no distant date the trade will be snatched

from them; and that once done, nothing will probably succeed in

bringing it back again. Lost ground of this character is seldom

recovered, and it may be hoped that those manufacturers who are

mostly concerned will take the hint here conveyed, and set out to

put their neglected houses in order. The coffee industry of Salvador

is _the_ most important of all its exports, and its pursuit is the

mainstay of the country. In 1910 the value was $5,130,404, out of a

total export trade of $7,294,602.

Among the British goods which I have more particularly noticed to

be well displayed in the retail stores are chemical preparations

and drugs. The Salvadoreans, like most Latin-Americans, are large

users of all kinds of patent medicines; and although a great many

of these come from the United States, those of British manufacture

are not at all poorly represented. Such articles as Eno's Fruit

Salt, Apollinaris and Apenta Water, Pears' Soap, Odol, and many

of the better-known vegetable pills, are to be found here--except

Cockle's, which are a very difficult drug to obtain, although in my

opinion one of the most efficacious. The chemists' shops are full of

all kinds of other drugs and patent medicines, and apparently the

proprietors conduct a remarkably good trade.

Relative to the trade of pharmacy, a new law is proposed which

will regulate the practice of this trade, and which will create a

Faculty of Pharmacy and Natural Sciences, to which all chemists and

druggists, whether native or foreign, operating in the country,

must belong. In default of membership in this faculty, a special

licence will have to be taken out for pharmaceutical practice.

Drugs, medicines, and perfumery to the value of $82,676 were

imported in 1910.

In regard to British wines and spirits, these are hardly ever

seen except in the houses of the few British residents who may

have imported a small supply for their own use. The total value

of victuals, wines and spirits, however, is not inconsiderable,

amounting in 1909 to about 12,748,249 kilos, representing a value

of £179,431, which, however, contrasts with 15,689,307 kilos, or a

value of £211,819, for the previous year. The wheat, rice, cereals

and breakfast foods, which are not as well known here as in other

parts of Latin-America, come from the United States, which also send

here by far the greater part of the lard, tallow, dairy produce,

sweetmeats, and dried and smoked meat and fish. The United Kingdom

shares in the salt trade, but this is only small.

I am of opinion that a better trade could be done by exporters

of British beers and liquors, which would be purchased here to a

more considerable extent. The number of cafés and restaurants is

increasing, and the tendency of the inhabitants, especially in good

times, is to dine from home. Although beer is brewed, it is more the

beverage of the workers than of the well-to-do.

In regard to the tobacco and liquor trades carried on in Salvador,

a record of the progress and management is maintained by means of

the regulations which have been introduced covering the operation

of cigar and cigarette factories and of breweries and bottling

establishments in the Republic. This control has been in vogue

since June of 1909. Proprietors of these establishments are required

to furnish to the proper authorities a sworn statement as to the

capacities of their plants, the number of the operatives employed,

etc. The analyses previously ordered for wines and liquors is also

extended to beers, both manufactured and imported.

In regard to the duties on wines and canned goods, imported liquors

pay a duty of 50 cents; heavy and white wines, 25 cents; and old

table wines, 5 cents--per quart bottle. Canned goods pay 10 cents

per kilo (=2,204,622 pounds). These duties are in addition to

Customs charges.

What effect will the completion and opening of the Panama Canal

have upon Salvador and other Central American countries? I have

often been asked this question, and perhaps this is as good a place

as any in which to answer it. That capital from North America will

flow more abundantly into Central America after the completion of

the great waterway is a practical certainty; but I do not consider

that there will be any such considerable augmentation, nor that the

difference will be so prodigious, in regard to results, as some

critics imagine. For many years to come the United States, with

its great area and its many undeveloped resources, will need more

capital--much more, indeed, than it can conveniently find among

its own people; that is to say, it will have to borrow from Europe

in addition to saving all that it can on its own account. The old

world has nowadays fewer opportunities for industrial and commercial

expansion; money is comparatively cheap, and all new countries

on the other side of the Atlantic offer the inducement of higher

interest.

How much of this investment will be made with purely American money?

The Yankees are certainly becoming more and more enthusiastic,

and at the same time more and more reckless, in their foreign

investments, and especially in regard to Latin-American countries.

Nevertheless they have a long way to go before, in actual figures,

they can in any way approach the value and extent of British foreign

investments. In regard to the return which their investments bring

them also, they have, on the whole, proved far less fortunate. In

all probability, British foreign holdings in South and Central

America to-day approach the sum of £500,000,000 (=$2,500,000,000),

and upon this gigantic amount of capital they earn a fair average

of 5-1/8 per cent. per annum, allowing for the higher and the lower

rates of interest paid, and which amounts to anything between 25 per

cent. and 35 per cent. on some land shares, and the modest 4-1/2 per

cent. and 4-3/8 per cent. earned upon railway debentures. I also

include in this return some "bad eggs" among a very diversified list

of investments.

I should say, on the other hand, that American foreign investments

would not amount in the aggregate to more than £200,000,000

($1,000,000,000), and of this at least seven-tenths are invested

in the Republic of Mexico, and probably two-tenths in enterprises

in Canada. American foreign investments are, in a large measure,

tributary to great concerns located in the United States, which

have their agents in foreign countries looking after their local

interests. From this considerable invested amount it would be

impossible to estimate a higher return than 2-3/4 or 3 per cent.;

for while many of the investments--such as the Standard Oil

interests in Mexico and the many banking interests in Cuba, Panama

and other countries--yield often a sensational amount of profit, so

much capital has been lost through rank speculation and dishonest

management, and so little sound judgment has been displayed in the

matter of sound original selection, that a considerable portion

has been irretrievably lost. This has been the case in the Sonora

district of Mexico (especially in the Cananea Copper-Mines); in the

gold and silver mines of Guanajuato; and in connection with some of

the railways of Costa Rica, Guatemala and Ecuador, so that what has

been made on the one hand has, to an appreciable extent, been lost

on the other.

Thus I do not anticipate any very pronounced rush of American

capital into Central America merely because the Canal will have

become _un fait accompli_. On the other hand, the United States

trade and commerce must feel benefit from the speedier means

of transport. Already the United States control 60.8 per cent.

of the importations into Mexico, and 89 per cent. into Panama;

something over 70 per cent. into Costa Rica, and about 60 per cent.

(increasing year by year) into Guatemala. With the active assistance

of the Washington Government, in conjunction with the compulsory

financial "assistance" forced upon them by the J. Pierpont Morgan

Syndicate, Honduras will also shortly be taking about 80 per cent.

of the United States goods as well as accepting _nolens volens_ the

loan of United States capital.

It is, however, the Republics of Ecuador, Peru, Bolivia and Chile

which will become better markets for the United States through the

medium of the Panama Canal; and while I was travelling recently

upon the west coast, I particularly remarked the arrangements

which were being organized to handle this anticipated additional

trade with all efficiency and despatch. American agents were busy

opening-up new branches or appointing local representatives to

handle the goods destined to be consigned in increased quantities;

German houses, already established, were also arranging their

houses and remodelling their order-books to deal with the expected

reorganization of North American trade, all of which proves that

a very substantial belief exists in the approaching trade "boom"

consequent upon the opening, in 1915, of the Panama Canal.

What attention are British manufacturers and British agents paying

to this all-important question? This is very easily answered--NONE!

The first place in the Imports from European countries into Salvador

is given to cotton-manufactured goods, nearly the whole of which,

I may again point out, come from Great Britain. In 1906, out of a

total of $4,000,000, which represented the value of the imports,

cotton goods figured for $1,500,000, or 30 per cent. of the total.

Of this $1,500,000, Great Britain was responsible for $974,964,

which represented woven goods, in addition to $141,328 representing

the value of thread. The United States came second on the list, with

textiles valued at $409,072, and thread $2,885, although in the

list of this classification America was outranked by both Germany

and France, which sold thread to Salvador to the value of $8,349

and $4,160 respectively. These two countries exported textiles to

Salvador to the amount of $32,199 and $71,890 respectively, while

Italy figured for $54,952.

[Illustration: EL PARQUE BARRÍOS.

ONE OF THE MOST BEAUTIFUL PUBLIC RESORTS IN CENTRAL AMERICA.]

In this class of goods, practically the same relative status of

countries has been maintained on the Import list of the Republic

since the year 1876; but it is noteworthy that the position of

cotton imports has, in the intervening period, declined no less than

50 per cent. of the total; on the other hand, the value of cotton

thread destined for use in the mills of the country has increased

fivefold since 1901, while mixtures of woollens, linens and silks

have also advanced in value. This is to be explained by the fact

that more woollen and cotton mills are gradually being erected in

the Republic, and that a great amount of encouraging success is

attending their operations. The skill of the native weavers, the

improvement of the quality of the cottons, and the industrious lives

of the inhabitants, are all factors which have led the Government to

consider the advisability of encouraging the growth of the required

supply upon a more comprehensive scale. Already, indeed, the

Government have commenced, offering export bounties for the surplus

stock, with a view to stimulating the culture.

In this connection it is difficult to understand how any intelligent

writer, who claims to have visited Salvador with his eyes open,

could have published such an utterly misleading and untruthful

statement of fact as that which appears in a book entitled "Central

America," from the pen of Mr. Frederick Palmer, F.R.G.S., who upon

p. 112 of that volume declares that "the only manufactures are from

an occasional hand-loom." Mr. Palmer does not inform his readers

how many days or hours he remained in Salvador, but apparently they

were insufficient to enable him to make himself even superficially

acquainted with the industrial conditions of the Republics. He

devotes exactly eleven and a half pages out of a total of 340 to

this country, and upon nearly each one of these pages he indulges in

either an exaggeration or in a misstatement, sometimes in both.

An important factor in the trade relations existing between Great

Britain and the Republic of Salvador is found in the Salvador

Chamber of Commerce in London (Incorporated), which was established

upon the initiative of Mr. Mark J. Kelly, F.R.G.S., in February,

1903, and duly incorporated under licence of the Board of Trade. It

will be remembered that the President of the Salvadorean Chamber

of Commerce in San Salvador, as well as being its Founder, is

Señor Don Miguel Dueñas, Sub-Secretary of State for Agriculture.

The first President of the Chamber was Mr. C. S. S. Guthrie, of 9,

Idol Lane, London, E.C., with Mr. C. Rozenraad, President of the

Federation of Foreign Chambers of Commerce in the United Kingdom,

as Vice-President. The objects of the Association are to promote

the trade, agriculture and industry of Salvador with the British

Empire; to keep members informed and acquainted with all matters in

connection with the trade of Salvador; and to promote study upon

all questions relating to the various international Conventions

which concern the trade between Salvador and Great Britain, as well

as to act as commercial arbitrators at the request of interested

parties, and exclusively in commercial disputes, where the interests

of Salvador trade are at stake. The Chamber numbers some forty

members, composed of merchants of London and other parts of the

United Kingdom doing business with Salvador. Upon his resignation of

the chairmanship of the Salvador Railway, Mr. Guthrie also resigned

from the Chamber of Commerce, and, at the urgent request of the

Council of the Chamber, Mr. Kelly, who with characteristic modesty

had refrained from allowing himself to be elected as the first

President, accepted the post (which is a purely honorary one), and

is now the President of the Chamber.

CHAPTER XIII

Systems of business--Long credits--British and United

States methods _versus_ German--Making "good" stock

losses--Question of exchange--Effect upon business--Drafts

and speculators--Customary terms of payment--Central

American banks as agents--Prominent Salvadorean Banks--The

Press of the Republic--Prominent newspapers--Some of their

contributors--Central American Press Conference.

The general idea prevails among both British and North American

manufacturers, who have had little personal experience of the

Latin-Americans, that extreme difficulties must inevitably be

connected with all--or, at least, with most--transactions conducted

in these countries, as far as payment for goods is concerned. I can

but observe that the Latin-Americans as a race, if not more honest

than Europeans or North Americans, are by no means any less so; and

probably, if sufficiently reliable information were obtainable, it

would be found that these former are, as a whole, quite as ready and

able to meet their foreign obligations as any class of traders in

either hemisphere.

As I have, however, pointed out in another chapter of this volume,

it would be extremely unwise upon the part of any firm in Great

Britain or in the United States to attempt to conduct their

transactions by correspondence; an Agent is indispensable if

difficulties in transportation and delivery through the Customs, as

well as the collection of the account when due, are to be avoided.

In most of the Central American ports and cities, especially (in

Salvador) at La Libertad, La Unión, El Triunfo, and Acajutla, the

services of such Agents are obtainable. Moreover, some of the banks

undertake to look after the interests of their correspondents who

are recommended to them, and who are prepared to pay a fair price

for the services rendered.

The usual method of conducting transactions of this kind is to

draw upon the purchaser of goods for the amount of the invoice,

and to negotiate the draft through some local bank, which will in

the majority of cases collect the amount, provided the shipping

documents be delivered in good order and are found to be free from

consular or Customs-house objections. The banks, naturally, take no

responsibility in the matter; and in any case the shipper should

know something reliable about the firm and their financial status

before entrusting them with the goods. Another mode is for the

purchaser of the goods to arrange with his own bankers to open a

credit with the shipping firm to be operated upon, against delivery

of the documents to the bank indicated, or in such other form as may

be agreed upon; while a third expedient--an unusual one, however,

and not to be recommended--is to make a remittance to the buyer

beforehand, either by means of a bank draft or cable transfer.

The safest method to adopt is to draw bills on the importing firm

at a usance,[4] agreed upon at the time that the order is taken,

generally from 90 to 120 days' sight, and to pass the bill and

documents through the bank for collection or sale. The draft is

usually made payable in return remittance at 90 days' sight on

London, Hamburg, or New York, but this is quite a matter of mutual

arrangement between buyer and seller.

[4] Usance = the time which in certain countries is allowed by

custom or usage for the payment of bills of exchange drawn on those

countries.--AUTHOR.

American as well as British export firms are, as a rule, disinclined

to give credit, while the German, on the other hand, offers as much

as his customer demands. Undoubtedly the latter loses a larger

proportion of his book-debts by pursuing so generous a policy;

but at the same time he multiplies the orders upon his books, and

he has a clever and somewhat unscrupulous way of so manipulating

the accounts of his honest customers as to make them directly or

indirectly liquidate the debts of the dishonest ones. How this is

done I do not know, but I know that it _is_ done, for I have the

assurance to that effect from more than one German trader who has

thus balanced his ledger for several years, and always without

suffering any bad consequences.

That the sanctimonious and strictly conscientious British tradesman

is not altogether averse, upon occasions, to pursue similar

methods was shown some few years ago, when a prominent West End

saddler confessed to the fact that when he took stock and found

a gentleman's £5 saddle was missing, and that he was unable to

remember to whom it had been sold, he instructed his bookkeeper to

charge up this item to each one of the firm's customers. "Some," he

unctuously observed, "will, of course, deny that they have had such

a saddle; to these you can write and express our profound apologies

for the unintentional error, etc. Those who don't complain will

probably be unable to remember what they had and what they did _not_

have. Let _them_ pay. Thus we shall get square."

And it is to be added that so careless or forgetful are the majority

of the customers of a "high-class" firm in London, that 70 per cent.

of those who were wrongly charged with the missing saddle paid the

unjust bill without questioning it.

Adverting to the subject of granting long credit to Central American

importers of foreign goods, it must be remembered that the majority

of these latter are obliged to ask for this indulgence on account of

the excessively large amounts which they are called upon to find in

order to clear their consignments from the Customs; and also because

the retail business which is carried on in these, as in practically

all agricultural countries, is a long-credit one. Only the most

liberal concessions of credit can secure any decisive advantage for

any one of the numerous competitors in business. Additionally, it

is not always possible for the importer to secure good drafts at

low rates in the market. In some of the countries--and Salvador is

not any exception--the market for drafts is completely dominated

by speculators, evidence of which is to be found in the fact

that heavy and unaccountable fluctuations present themselves at

short intervals. The possibility of speculators thus controlling

the market is increased by their finding in the banks--no

matter how highly these may be ranked as honourably-conducted

institutions--ready allies.

The question of exchange in Salvador, and the baneful effect which

it has, and for some years has had, upon commerce and trade,

especially upon the profitable conduct of the Salvador Railway, is

more fully dealt with in another part of this volume (see Chapter

XV.). But a few observations concerning the character of the

exchange business in Central American countries generally may not

be out of place here.

In Honduras, exchange rates are often only nominal, because no

regular commercial paper is to be found in the market. The large

exports of minerals, bananas, and other produce, are covered, since

the proprietors, who are mostly foreigners, need only the necessary

amount for the wages of their labourers, and this is remitted to the

country by means of drafts. The exporters, moreover, consider the

premium on gold not only as profit earned upon their sales, but as

representing an economy in their working expenses, since the export

product and the wages for labour are paid for in silver, which

naturally makes the first cost of the product much less. Drafts are

in this way arbitrarily held back and kept out of the market, or

prices are asked for them which are out of all proportion to the

silver quotations of London and New York. So the importer in these

silver standard countries, in some of which the exportation of the

white metal is prohibited, finds himself compelled to wait for a

favourable opportunity to buy drafts at a low rate in order to pay

for his purchases in foreign countries.

The customary terms of payment for European houses are four to

six months from the date of the invoice; in many cases shipments

are made "to order," and the bill of lading is delivered to the

purchaser when he accepts the seller's draft at his local bank,

and in this way the customer is held to strict observance of the

time when the bill falls due. In case of failure of the customer to

meet his drafts when they mature, the matter is generally arranged

by issuing drafts payable at sight after ninety days on London

or Hamburg, with payment of interest for the time they are out.

The operations of having drafts accepted and remitting the funds

collected through them are carried out by the large banks or private

banking firms located in these countries in consideration of a

commission varying between 1/2 and 2 per cent.

Open credits (that is to say, running accounts which the customer

can vary in amount to suit his needs, with payment of interest, of

course) are no longer granted, except by a few firms to some of

their oldest and best customers.

The intelligent and not over-cautious European exporter accepts

without hesitation the usual six-months terms, because he has some

knowledge of these countries and their people; and he often prefers

such a settlement to cash in advance, since he likewise recognizes

that he is binding the customer to do more business with his firm.

On the other hand, one often hears commercial houses complain that

when they decide to place a trial order with North American firms

which are desirous of doing business with them, and have repeatedly

and insistently solicited such orders, they are required to pay cash

with the order. That nobody in Central America would accept such

terms, or at least very seldom, the clever Yankee business man ought

to be able to see, especially as the most notable traits of the

Spanish-American character are extreme sensitiveness and the need of

courteous treatment.

A cash discount of 3 to 4 per cent. is not much of an inducement in

a country where the usual rates of interest are 18 to 40 per cent.

Some of the banks of Central America, which secure but a small

and unimportant share of the business going, and which pay less

attention to the development of the country than to the needs of

their own treasuries, often demand 1 to 1-1/2 per cent. monthly,

with security worth two or three times the sum loaned.

There are no established commercial agencies in Central America

which furnish information, but reliable information uninfluenced

by personal interests can sometimes be obtained from the

principal banking firms--such, for instance, in Guatemala, as the

International Bank, American Bank or Guatemala Bank, Clermont and

Co., Schlubach, Dauch and Co.; in Salvador, from the Banco Agrícola,

Occidental or National Bank, and Messrs. David Bloom and Co.; in

Panama, Messrs. Ehrmann Brothers; in Honduras, from J. Rössner and

Co., P. Maier and Co., Francisco Siercke, and Juan Stradtmann;

in Nicaragua, from the young and well-respected British Consul,

Mr. Albert J. Martin; and in Costa Rica from the following banks:

Anglo-Costa Rica, Commercial and Sasso and Pirie. These houses

are better informed than anyone else about the amount of credit

customers may deserve, because, knowing the promptness with which

the various firms meet their outstanding drafts, they are in a

position to form a reliable opinion of the solvency of prospective

or actual customers.

The Banco Agrícola Comercial has a subscribed capital of $5,000,000,

of which $1,000,000 is paid up. The Reserve Fund amounts to

$100,000, and Eventualities Fund to $115,180. The Permanent Director

is Señor Mauricio Duke, and the Consulting Directors Señores J.

Mauricio Duke and Eugenio Aguila. There are two other Sub-Directors,

Señores Rafael Guirola and Miguel Judice. Señor F. Drews is the

General Manager.

The Banco Agrícola Comercial, which was established in 1895, has

gone through more than one critical financial and commercial

period, but it has come out of the ordeal with considerable credit

to itself. There can be no doubt that the bank has been a great

assistance to agriculture and trade generally in the Republic, nor

that it has not done at all badly for itself, which fact is seen

from the last balance-sheets issued. In 1908, upon a total turnover

of $14,500,000, the bank's profits were $145,634 (silver pésos).

There was a dividend of 8 per cent. paid to the shareholders upon

the paid-up capital of $1,000,000 (pésos) after all charges for

administration had been met, and a substantial addition made to the

Emergency Fund. In 1909 the total amount of business transacted

figured at $16,200,000 (silver pésos).

The following summary of the bank's financial transactions and

position over a period of three years will be of interest:

+-------------------+-------+----------+---------+---------+------------+

| | Cash. |Commercial|Accounts |Accounts |Circulation.|

| | |Paper and | and |bearing | |

| | |Mortgages.|Deposits.|Interest.| |

+-------------------+-------+----------+---------+---------+------------+

|First half of 1907 | 717 | 588 | 906 | 780 | 816 |

|Second " " | 565 | 758 | 828 | 931 | 741 |

|First half of 1908 | 935 | 779 | 1,175 | 991 | 816 |

|Second " " | 1,441 | 1,013 | 1,485 | 1,186 | 984 |

|First half of 1909 | 1,424 | 1,213 | 1,954 | 1,142 | 921 |

|Second " " | 946 | 1,181 | 1,603 | 1,453 | 969 |

+-------------------+-------+----------+---------+---------+------------+

It will be observed that the last year's showing is less favourable

to the bank, but this may be attributed to the heavy demands made

upon its resources in financing the movement of the coffee crop.

The metallic reserve for meeting outstanding obligations over the

same period had been considerably weakened in consequence, as the

subjoined table will prove:

METALLIC RESERVE.

(A denotes notes alone; B denotes notes, deposits and current

accounts.)

+--------------------------+----------------+----------------+

| | June. | December. |

| At the End of the Month, +--------+-------+--------+-------+

| in per Cent. | A. | B. | A. | B. |

+--------------------------+--------+-------+--------+-------+

| 1907 | 87.89 | 44.63 | 76.27 | 37.82 |

| 1908 | 114.39 | 46.90 | 146.35 | 58.33 |

| 1909 | 154.60 | 49.54 | 97.62 | 34.36 |

+--------------------------+--------+-------+--------+-------+

This bank, like others in Salvador, does not disclose the character

of its investments, and it is therefore impossible to pronounce any

opinion of its actual financial status. It is always desirable to

know something regarding the character of the paper which a bank

has in hand, and it is precisely this knowledge which is withheld,

and by many British companies also. The omission to provide it is

in no way the fault of the bank, be it observed, but of the custom

which controls its actions. In Costa Rica alone, among the Central

American States, is the practice general among the banks to publish

in the balance-sheets some particulars of the commercial paper

carried, and this is taken into account like every other asset

and inventoried. In Costa Rica, also, all the issuing banks have

their books inspected once a month by Government officials, and a

certificate of solvency is presented to and published by them.

The National Bank of Salvador (Banco Nacional) was founded in 1907

with a capital of $1,000,000 (silver pesos). Of this amount one-half

has been paid up. The following statement of account for the first

three years of its existence will be useful:

+-----------------------------+-----------+-----------+------------+

| | 1907. | 1908. | First Half |

| | | | of 1909. |

+-----------------------------+-----------+-----------+------------+

|Total earnings | 18,173.74 | 38,786.85 | 26,175.36 |

|Deductions | 3,000.00 | 8,138.35 | 6,175.36 |

| |-----------+-----------+------------+

| Net Profits | 15,173.74 | 30,648.50 | 20,000.00 |

| Increase in 1908, 15,442.26 |

+------------------------------------------------------------------+

The balance-sheet shows the following accounts:

+-----------------------------+-----------+-----------+------------+

| | 1907. | 1908. | First Half |

| | | | of 1909. |

+-----------------------------+-----------+-----------+------------+

|Negotiable paper | 568,727 | 675,176 | 427,751 |

|Loans on current accounts | 546,331 | 777,847 | 724,734 |

|Cash | 264,374 | 634,803 | 449,207 |

|Notes in circulation | 90,908 | 517,153 | 426,732 |

|Credit and deposits at sight | 211,361 | 365,333 | 302,870 |

|Time obligations | 223,905 | 502,174 | 430,682 |

+-----------------------------+-----------+-----------+------------+

The metallic reserve account stood as follows:

+-------------------------+--------------------+---------+---------+

| | June. | December. |

|At the End of the Month, |----------+---------+---------+---------+

|in per Cent. | A. | B. | A. | B. |

+------------------------------------+---------+---------+---------+

| 1907 | 354·32 | 39·36 | 262·90 | 60·05 |

| 1908 | 115·93 | 60·10 | 126·47 | 42·70 |

| 1909 | 105·26 | 38·50 | | |

+-------------------------+----------+---------+---------+---------+

The steady increase shown is somewhat remarkable, and the

distribution of profits, considering the comparatively recent

establishment of this bank, hardly less so. This distribution, after

making all the necessary provisions, stood as follows:

+-------------------+--------+--------+------------+

| | 1907. | 1908. | First Half |

| | | | of 1909. |

+-------------------+--------+--------+------------+

| Reserve fund | 3,000 | 7,000 | 10,000 |

| Emergency fund | -- | 2,000 | 2,000 |

| Dividends | -- | 30,618 | 21,503 |

| Undivided surplus | 15,173 | 2,980 | 1,675 |

+-------------------+--------+--------+------------+

For the first six months of 1909, the dividend declared and paid was

4 per cent. upon the amount of capital paid up = $500,000 (silver

pesos). For the remaining half-year and for 1910, and the first half

of 1911, increased distributions have been made, and the financial

condition and prospects of the Banco Nacional are considered to be

in a satisfactory state. Señor Guillermo Hemmeler is the Manager,

and he has bought up the connection of the bank's customers

consistently from the time that he first assumed control. The bank

allows 3 per cent. interest upon current accounts, and it has the

privilege of issuing its own notes.

El Banco Salvadoreño was established in 1885, and has a subscribed

and paid-up capital of $3,000,000. The Reserve Fund amounts to

$231,985.80 and the Dividend Equalization Fund to $20,000; the

Eventualities Fund at present stands at $50,000. There are branches

established at Santa Ana (the Manager being Señor Cuno G. Mathies)

and at San Miguel (the Manager being Señor R. Schlensz). The General

Manager in San Salvador is Señor Alberto W. Augspurg, who speaks

English very well, and is invariably courteous and obliging to

foreigners who seek his assistance or advice.

Banking business in Salvador always has been, and still is, carried

on by a few private firms. The establishment conducted by Messrs.

Blanco and Trigueros was founded as far back as 1835, with a

capital estimated at $1,500,000. In 1893 the Bank of Nicaragua

opened a branch office in the city of San Salvador, and for long

did a good and steady business. Certain concessions and privileges

were also granted to Messrs. Linares and Co., of Barcelona, Spain,

enabling them to establish a national bank in San Salvador, with a

capital of £1,000,000 sterling. A concession was also granted for

the establishment of a purely Mortgage Bank, but up till now such an

establishment has not been started.

The House of David Bloom and Co., with branches at New York and San

Francisco, is composed of Messrs. David and Benjamin Bloom, and who

are the principal private bankers of the Government. Subject to the

criticism which this position involves, mainly upon the part of

those, perhaps, who are not as well endowed as are Messrs. Bloom and

Co. with moral courage and confidence in the peaceful continuity of

government in Salvador, this firm enjoys an excellent reputation for

fair dealing, and is well regarded throughout the country.

The Press of the Republic is well represented by some five or

six daily newspapers, several weekly publications, and a number

of monthly reviews. There are entirely free press laws existing,

and on the whole there is no abuse of the privileges accorded for

expressing public opinion. _El Diario del Salvador_ was founded in

July of 1894 by Señor R. Mayorga Rivas, and is to-day conducted

by the same talented journalist and cultured writer. The General

Manager is Señor J. M. Lacayo Téllez. Among its regular contributors

are Señores J. Dols Corpeño, a young but vigorous writer; Armando

Rodriguez Portillo, who is but thirty years of age; and other

distinguished _littérateurs_ of Salvador. _El Diario Latino_, of

which Señor Miguel Pinto is the Director and Proprietor, and Señor

Juan Ramón Uriarte is the Editor, has a large and influential

circulation, which is by no means confined to the Republic itself.

_El Heraldo del Salvador_, which is the recognized organ of the

Church, is edited by the Rev. Dr. Eduardo Martinez Balsalobre. It

is, as may be assumed, a high-class publication, and publishes

occasionally some powerful literary contributions from the pens

of some of the most talented writers. _El Diario Oficial_ is the

property and exponent of the Government, but scarcely takes rank as

a newspaper, being in all respects similar to our _London Gazette_,

with the exception that it prints daily a good service of cables.

[Illustration: GOVERNMENT BUILDING ("CASA BLANCA"), SAN SALVADOR.]

[Illustration: CAMPO DE MARTE (RACE COURSE), SAN SALVADOR.]

Among the many weekly publications of note may be cited _La Riqueza_

and _La Vida y Verdad; La Semana Mercantil_, which is the organ

of the Society known as "Orden y Prosperidad"; _El Franciscano_,

a Catholic paper conducted by a Franciscan Brother; _Repertorio

del Diario del Salvador_, a well-illustrated review of literary,

commercial, and social matters, and edited by a gentleman bearing

the very English name of Samuel C. Dawson. This publication is, as

its title may suggest, closely allied with the great daily paper _El

Diario del Salvador_. Other publications are--_La Razón Católica_,

a monthly Church organ; _El Comercio del Salvador_, also a monthly

illustrated dealing with politics, sociology, and a variety of

other subjects; _En Serio y en Broma_, a humorous monthly review;

as well as a large number of technical prints, weekly and monthly,

such as--_Anales del Museo Nacional_, _Archivos del Hospital

Rosales_, _Vida Intelectual_, _Revista Judicial_, _Boletín de

Agricultura_, _Revista Cientifico-Militar_, _Libro Rosado do El

Salvador_, _Boletín Municipal_, _Boletín del Consejo Superior de

Salubridad_, _La Voz del Obréro_, _Boletín Masónico_, _La Buena

Prensa_, _La Luciérnaga_, and _Juan de Arco_.

Each of the Departments has likewise one or more daily or weekly

papers, many carrying great influence among the better-class

Salvadoreans, who are both diligent readers and intelligent critics.

In Santa Ana there are _El Demócrata_, which was founded in 1900,

and a weekly known as _El Santaneco_. In Chalchuapa there are two

weeklies, _La Vanguardia_ and _El Patriota_; in Achuachapán there

is one weekly, _La Nueva Era_; in Sonsonate, _La Prensa_, also a

weekly; in Santa Tecla, _Don Bosco_, a weekly which is the organ of

the Instituto Salesiano; in Cojutepeque there are two periodicals,

one weekly and one monthly, respectively known as _El Imparcial_ and

_El Cuscatleco_; in Suchitoto, a monthly review, _La Mujer_ (The

Woman), holds the field; in Santiago de Maria, _El Anunciador_;

and in San Miguel, _El Eco de Oriente_. A fair share of local

advertising is accorded to all of these publications, but, of a

necessity, in the majority of cases the circulation is small.

There was recently formed a Central American Press Association,

composed of the representatives of the principal newspapers

published in the five Republics of Salvador, Guatemala, Costa Rica,

Nicaragua, and Honduras. Already the news published in each State

concerning the sister-Republics is full; but the new association,

working by means of a mutual exchange of information fit for

publication, will result in a considerably improved service being

maintained. The papers which have taken the initiative in this

important Association are--_Diario del Salvador_ (El Salvador),

_Diario de Centro América_ (Guatemala), _Diario de Nicaragua_

(Nicaragua), and _La República_ (Costa Rica). Towards the end of

this year (1911) a Conference of Press Representatives is to be held

in San Salvador, which is expected to be attended with considerable

success, and even far-reaching consequences.

CHAPTER XIV

Mining--Ancient workings--Precious metals found--Copper

deposits--Iron ores--Treatment of ores in England--Difficulties

of transport--Some deceased authorities--Mines in

operation--Butters' Salvador mines--History of

undertaking--Large profits earned--Directorial policy--Machinery

and equipment--Butters' Divisadero Mines--Butters' cyaniding

plant.

Tradition points to the fact that the whole of the Central American

States were more or less mineralized, while some of them, such

as Honduras and Salvador, have long been known to contain great

mineral wealth. The geological conditions of Salvador, as may be

inferred from the physical facts which have already been set forth

in these pages, show that precious metals have been found in some

of the Departments. There are on record considerable operations

in connection with the different Salvador mines of Tabanco,

Sociedad, and others in their immediate vicinity and lying in the

north-eastern part of the Department of San Miguel, on the confines

of Honduras.

These mines have been extensively worked, and have in their time

yielded very profitable results. About six miles distant from

Tabanco are the goldmines of Capitalis, once believed to be of

great richness, and the group of silver-mines known under the name

of Minas de Tabanco, and where is found silver in common with

galena and sulphurate of zinc. In times past these mines have been

worked with very little difficulty, and they have yielded from as

little as 47 to as much as 2,537 ounces to the ton. The most famous

producer among these was the Santa Rosalía, and a great part of

these ores were formerly shipped direct to England. Old archives

of this concern show that in the year 1830 an attempt was made to

work the mines on a large scale by an English company, which sent

out a whole corps of Cornish miners for the purpose. The machinery

which was despatched at the same time was so heavy, however, that

it was found impossible to transport it from the coast, which

difficulty, combined with others, entirely broke up the enterprise.

Had the organizers of the company, as a preliminary, constructed

a good cart-road, which was quite possible, and had then sent out

the machinery in parts, which could have been packed separately on

mule-back, as is done in Colombia and other mountainous countries,

the undertaking might never have been a failure.

That mining paid, and paid well, in Salvador in olden days is

proved by the record which has been left by Mr. R. C. Dunlop, in

his "Travels in Central America." This writer tells us that "five

leagues north of San Miguel are a number of mines of silver; among

them is one called La Carolina, which was worked by a Spanish

_empresario_ about thirty years ago [Dunlop's book was published in

1847]. He invested his own property, borrowed $100,000 and, after

getting his mine into order in less than six months, was able to pay

his obligations; and although he died before the end of the year,

he left $70,000 in gold and silver, the produce of the mine. After

his death the ownership was disputed, the works fell into ruins,

and the mine became filled with water. The mines of Tabanco yield

more silver than those in its vicinity, and when worked yielded

upwards of $1,000,000 annually, although operated in a rude manner

without machinery. The principal one yielded $200,000 annually to

the proprietors."

I fear that the late Mr. Dunlop somewhat exaggerated the value of

these mines; for while I was in the country, and in the particular

district referred to by the author, no one seemed to have any

recollection of any such values having ever been obtained.

The same doubtful authority is responsible for the statement that

"nine leagues from Santa Ana are some rich mines of iron which

produce a purer and more malleable metal than any imported from

Europe. The ore is found near the surface, and is very abundant,

while there are extensive forests in the immediate vicinity which

serve for making charcoal." Another authority on Salvador, long

since gathered to his fathers--viz., John Baily, R.M.--who published

a book upon Central America in 1850, assures us that some of this

iron which was sent to England for the purpose of examination proved

to be "a very valuable variety suitable for the manufacture of fine

steel, approaching very nearly in this respect to the celebrated

_Wootz_ of India."

The mineral veins of Salvador present themselves principally in

the rocks of the mountain chain, or Cordillera, which extends into

Honduras and Nicaragua, and forms the richest mining districts of

those countries. Generally speaking, the veins run parallel with

the direction of the ranges--that is, from east to west--but they

are often found to be very much broken and interrupted by the

action of upheaval. In the eastern parts of the Republic, deposits

of gold, silver, copper, and lead are found, while in the western

are the rich iron-ore deposits. Coal is found in the valley of the

River Lempa. Although it is rather difficult to obtain full and

accurate returns of all the mines in operation in Salvador to-day,

roughly speaking they may be put at between 180 and 200. The table

on p. 185, which has been compiled by the head of the Salvadorean

Bureau of Statistics, and which shows the number of mines of each

Department and the minerals which they possess, will be of some

interest.

The labour question is, however, one which must be carefully gone

into; but here again the local (State) Government could, and no

doubt would, help the enterprise considerably, for so closely are

the authorities in touch with the people that they can at most

times influence a good and continuous flow of _peon_ labour when

their assistance is invoked. General shortage of labour has been

responsible for a great number of the mining returns not being

satisfactory of late, especially in connection with the Butters'

Salvador Mines, of which fuller details are given.

TABLE COMPILED BY SEÑOR DON RAFAEL REYES, CHIEF OF THE SALVADOREAN

BUREAU OF STATISTICS, SHOWING NUMBER OF MINES IN EACH DEPARTMENT,

AND THE MINERALS THEY PRODUCE.

A Building Stone.

B Gypsum.

C Silver and Lead.

D Tin and Lead.

E Rock Crystal.

F Marble.

G Tin.

H Lead.

I Iron.

J Limestone.

K Quicksilver and Antimony.

L Gold.

M Silver.

N Silver and Gold.

O Copper.

P Coal.

Q Silver and Copper.

R Total.

+--------------+--+--+--+--+--+--+--+--+--+--+--+--+--+---+--+--+--+---+

| Departments. |A |B |C |D |E |F |G |H |I |J |K |L |M |N |O |P |Q |R |

+--------------+--+--+--+--+--+--+--+--+--+--+--+--+--+---+--+--+--+---+

| San Salvador | 1| 1| | | | | | | | | | | | | | | | 2|

| Santa Ana | | | | 1| | | | | 8| | | |10| | 4| | 5| 28|

| Ahuachapán | | | | | | | | | | | | | | | | | | |

| La Libertád | | | | | | | | | | | | | | | | | | |

| Sonsonate | 5| | | | | | | | | 8| | | | | | | | 13|

| Cuscutlán | | | | | | | | | | | | | | | | | | |

| Chalatenango | | 1| 2| | 1| 1| 1| 2| 1| 2| 1| 1| 6| 5| 3| 1| | 28|

| Cabañas | | | | | | | | | | 5| | | | 9| | 3| | 17|

| San Vicente | | | | | | | | | | | | | | | | | | |

| La Paz | | | | | | | | | | | | | | | | | | |

| Usulután | | | | | | | | | | | | | | | | | | |

| Morazán | | | | | | | | 1| | | | 1| 4| 84| | | | 90|

| San Miguel | | | | | | | | | | | | | | | | | | |

| La Unión | | | | | | | | | | | | | | 2| | | | 2|

| +--+--+--+--+--+--+--+--+--+--+--+--+--+---+--+--+--+---+

| Total | 6| 2| 2| 1| 1| 1| 1| 3| 9|15| 1| 2|20|100| 7| 4| 5|180|

+--------------+--+--+--+--+--+--+--+--+--+--+--+--+--+---+--+--+--+---+

The Salvadorean _peon_, like his Peruvian brother, is a very

tractable kind of labourer, and can be successfully handled by

kind treatment. He is, moreover, naturally free from that taint

of dishonesty which so strongly distinguishes the Mexican and the

Colombian _peon_, and which renders it impossible to leave anything

of a portable nature in their way. The native labourer of Salvador

is usually able to earn an easy livelihood by means of husbandry,

and he takes to mining from choice rather than from necessity. This

fact renders it all the more important that fair treatment should

be extended to him, and upon most of the foreign-owned mines this

is certainly the case. The late manager of the Butters' Salvador

Mines, Mr. Garthwaite, whose death occurred last year, was entirely

_sympatico_ to the men employed upon the mines, and his kindness to

them and to their families was generally acknowledged and deeply

appreciated.

That the industry of mining has considerably improved in Salvador

during the past decade is sufficiently evidenced by the subjoined

figures, which trace the industry in its progress from January,

1901, to the first half of the year 1910:

Period covered. (U.S Gold $)

Year 1901 $183,760.00.

" 1902 114,585.20.

" 1903 814,733.88.

" 1904 652,854.33.

" 1905 768,677.60.

" 1906 1,296,666.00.

" 1907 1,223,565.00.

" 1908 1,318,224.00.

" 1909 1,116,717.00.

" 1910 (half-year) 560,570.00.

These figures refer to all the auriferous silver, copper ore, gold

bars, gold and silver ore, lead ore, gold slimes, gold and copper

slimes, gold and silver slimes, and lead, which had been mined in

the country during the period mentioned.

I should say that modest fortunes await the enterprising

capitalist--foreign for choice, since as a rule he is less easily

discouraged by a run of temporary ill-luck--who exploits some of the

_antiguas_--_i.e._, the ancient copper workings of the Salvadoreans

which have been abandoned owing to lack of capital or labour. I know

of many such opportunities which exist in the Department of Morazán,

where already a considerable group of foreign companies and private

individuals are working with occasionally remarkable success. With

the modern machinery and reduction plant now available, certainly

the greater part of these ancient workings might be made to pay

something as a return upon the amount of capital expended upon

them. To-day, also, there exists a first-class cart-road leading

from these mines to the principal town, and thus transportation,

which was formerly both costly and difficult, is now a matter of

comparative facility.

In some of the iron ore mines one can find the old and wasteful

Catalan system of reduction still in use, and yet with proper

treatment, as was sufficiently proved when a trial shipment of

ores was sent to England some years ago, as much as 87 per cent.

of magnetic iron can be obtained from these ores. And the quantity

of ore which they contain is apparently inexhaustible. I know of

but two or three small smelters at present existing in Salvador,

and, naturally, the industry of copper-smelting carried on in this

primitive and limited manner proves anything but profitable. I am of

opinion that the Government would encourage any serious attempt upon

the part of foreign capitalists to exploit the unquestionably rich

copper deposits of the Departments of Chalatenango and Cabañas, and

such an enterprise might well be worth the attention of some British

or United States mining capitalists. The latter are usually the more

enterprising and plucky.

About twelve years ago there was registered in London a mining

property covering 546 acres in Salvador, comprising a number of

gold-bearing properties, with the title of Butters' Salvador Mines,

Ltd., the principal owner being Mr. Charles Butters, a well-known

American engineer, and who is the chairman of the company. From the

very commencement of its operations, the company seems to have been

eminently successful, and was able to distribute its first dividend

in 1903, when 5 per cent, was paid. Since that date the dividends

have varied from 40 to 80 per cent., that for 1910 being at the rate

of 45 per cent., which compared with a similar rate for the previous

year, but with an additional bonus of 23-3/4 per cent. On account of

the present year, 15 per cent. has already been paid as an _interim_

dividend, and, according to the recently-issued report, the ore

reserves are now estimated to amount to 108,000 tons, and to carry a

profit value of £400,000, or more than twice the value of the entire

share capital.

At the end of last May, dividend "No. 87" of 3-3/4 per cent. (= 9d.

per share) was declared by the Board of Directors, who at the same

time informed the shareholders that dividends will in the future be

distributed quarterly instead of monthly, as has been customary in

the past.

[Illustration: 1. VIEW OF BUTTERS' DIVISADERO MINES, DEPARTMENT OF

MORAZÁN, SALVADOR.]

[Illustration: 2. BUTTERS' SALVADOR MINES, SANTA ROSA, DEPARTMENT OF

LA UNIÓN, SALVADOR.]

The inherent wealth of these mines is clearly demonstrated when one

recollects that, in spite of the able and experienced management

that has been the rule, many difficulties have had to be encountered

and overcome, not the least of which has been the lack of labour,

and, during the early part of last year, some serious trouble with

the boilers at the mines. The consistently cautious policy which the

directorate have adopted, notwithstanding the large dividends which

they have been able to recommend, has resulted in their establishing

the mines upon a thoroughly solid and business-like basis. It is

worth remarking here that the whole of the existing plant and

equipment, which are as complete and efficient as any to be found

upon the American Continent, have been paid for out of revenue,

and they stand in the books of the company at the present time at

the ridiculously low price of £2,000.

The principal work which the management has in hand at the present

time is cross-cutting the formation, with the object of finding

split or parallel veins, and the discovery of such split veins has

naturally much improved the position of the company. The whole

policy of the management will now be devoted, for some years to

come, to proving the mines in depth, and such, indeed, would have

been undertaken before now but for the troubles to which I have

above referred in regard to labour. The ore indications, which have

so far been met with, are of a distinctly favourable nature, the

most encouraging, perhaps, being the cutting of the famous Miguel

ore-shoot at the 700 feet level. The width of this vein exceeds 3

feet, and it assays over 6 ounces. The Miguel shaft is now down

nearly 800 feet, but the deepest working from which the ore has been

stoped is the 600 feet level; the shaft will therefore give 200 feet

of backs below the present workings.

At present between 25,000 and 30,000 tons of ore are being

crushed annually, which yield on the average a value of 1 ounce 7

pennyweights. The working expenses have never been particularly

high, owing greatly to the excellence of management and the economy

of the reduction plant, which bears the name of the chairman of

the company--viz., the Butters' Cyanide Process--but there are

nevertheless hopes that these costs will be still further reduced

in the near future. There is no question that the Butters' Salvador

Mines rank among the most valuable ore deposits to be found in

Central America, and it is no less sure that they are being managed

in the most expert and most economical manner.

As to the financial situation of the company, the balance-sheet

proves that the cash in hand on June 30, 1910, in Salvador, London,

and San Francisco, amounted to £5,001, and that on the same date

the stores in hand and in transit were valued at £32,228; sundry

debtors in Salvador and London amounted to £812, and _per contra_

the amount owing to sundry creditors was £3,642. The profit and loss

account showed a net profit for the period of £62,645; while the

amount brought forward from the previous account, and which amounted

to £19,042, being added to the net profit, showed a total available

distributable balance of £81,677. The dividends which have been paid

for the twelve months aggregated, as already mentioned, 45 per cent.

upon the capital of the company, and which absorbed £67,500, thus

leaving a carry-forward of £14,177.

It is worthy of mention that in the directors' report for the period

ending June 30, 1910, a graceful tribute is paid to "the continued

consideration which the Government of Salvador has extended to the

company," and which testimony goes to prove what I have already

indicated--viz., that the Government is anxious and willing to

encourage in every legitimate manner sound foreign enterprise; but I

go further, and say that I know of no other Latin-American Republic

which has shown greater good-will to all foreign enterprise in all

its phases than that of Salvador.

It is over seven years since the Butters' filter was introduced in

connection with mining, and the process may now be met with in all

parts of the world, and especially in Mexico, where I have seen it

working with excellent advantage upon the famous Dos Estrellas

gold-mine at El Oro, as well as in Brazil and in other South

American countries.

The need of a filter of some sort was first forcibly presented

to the mind of Mr. Charles Butters and his associates at their

works in Virginia City, Nevada, U.S.A. The tailing being cyanided

there was originally derived from the Comstock Mills, but it had

been treated and retreated several times by the Pan-Amalgamation

process; as it stands to-day in the dams, it contains about 75 per

cent. of material that is leachable, and which may be designated

as "slime." The slime is of an exceptional character. In addition

to the difficulties connected with the solution of gold and silver

contents, the mechanical condition was such that it gave trouble

in settlement for decantation. The clarification produced by a

coagulant such as lime was perfect, but the subsidence was so

slow that the amount of solution recoverable in this way was not

sufficient to make the decantation process a practical success.

It was proved, in fact, that coagulation was not necessarily

accompanied by good settlement.

After experimenting with several forms of vacuum filter units, both

cylindrical and rectangular, there was evolved a form of filter

which is the recognized present standard, and the preliminary plant

of 336 leaves, which was erected at Goldfield seven years ago, is

still in full operation to-day. As the filtration process is found

working at the Salvador mines and in other parts of the world, the

filter-leaf is made on a frame, the upper side of which is formed

on wood, and acts as a suspending bar when the leaf is in position

in the filter-box. The remaining three sides are made of 1/2-inch

pipe, perforated with holes and connecting to the vacuum pump.

The filtering medium consists firstly of a porous mat of such size

as to exactly fill the space formed by the pipe frame, and upon

either side of this is placed a sheet of canvas, large enough to

overlap the frame, around which it is securely sewn. The first

containing-box which was used at Virginia City was an electrolytic

precipitation-box, which was not needed for its special purpose, and

was adopted for the use of the new filter. An air-compressor was

converted into a vacuum pump, and with this equipment the vacuum

filter of to-day came into existence.

From the beginning it proved a marked success, and the next step

in its perfection was the designing of the large Goldfield plant

to handle 800 tons of dry slime per diem. When designing the

containing-box for the special purpose of the filter, the lines of

the original box were slightly departed from as regards the shape of

the hoppers, these being given sixty sides to facilitate the better

discharge of the cake, and a quick opening valve of large area was

placed at the apex of each hopper. Instead of a dry vacuum pump

and gravity drainage, a wet vacuum pump was used, permitting the

solution pump to be placed above the filter.

The cycle of operation is as follows: (1) Filling the box with

pulp; (2) the formation of a cake on each side of the vacuum

leaves by suction; (3) emptying the box of pulp and filling with

weak solution; (4) drawing through the cake sufficient solution to

displace all soluble values; (5) emptying the box of solution and

filling with water; (6) drawing through the cake a small quantity of

clean water to displace any solution held in the cake; (7) shutting

off the vacuum and admitting water through the leaf connection,

thereby throwing off the cake, which falls to the bottom of the

box, and cleansing the canvas in preparation for the next charge;

(8) opening the valve in hopper bottom of box, and allowing the

residues to escape to the waste dam; (9) closing the valve, thus

rendering the filter ready for the next charge of pulp.

It is a very unusual thing to find in the newer mining companies

of Central America such up-to-date machinery and mining processes

as are in use in the Republic of Salvador at the Butters'

Salvador and the Divisadero Mines. The Government of Salvador has

to be congratulated upon the wisdom it has shown in extending

consideration to companies engaged in the development of its mines,

and to practical men of the type of Mr. Charles Butters and his

associates, to induce them to devote their money and their brains to

the development of Salvador. The most modern processes and the most

up-to-date machinery can be here found at work, and the Government

is permitted, by the terms of the franchise which they have granted

to the companies, to send Government students to attend at these

works to complete their studies in mining and metallurgy. Among the

processes at Butters' Salvador Mines are dry-crushing and roasting,

electrolytic precipitation as well as electrolytic refining. The

cyanide process with the Butters' Patent Vacuum Filter is found

here treating gold ore without amalgamation, and making extraction

of from 95 to 96 per cent. The mining at this property has been by

adits principally. Electrical winding plants and electrical pumping

plants are now installed at this property. Both at the mine and at

the mill a high efficiency of working has been attained for many

years.

At the Butters' Divisadero Mines, located twelve miles distant from

the Butters' Salvador Mines, a much larger quantity of ore, but of

a lower grade than at the Salvador Mine, is treated, about 10,000

tons a month being handled on this property. The Government student

has here the privilege of seeing ore, of about $5 a ton, mined and

milled. A large electric plant is established, by means of which

all the hoisting and pumping are carried on. A large quantity of

water is encountered at this mine, and where formerly it was found

impossible to handle the water by the use of Cornish pumps, it is

now kept under control by means of the Sulzer electrically-driven

centrifugal pump. Two sinking pumps, of a capacity of 600 gallons

per minute each, have been installed, which are suspended from the

surface, and are calculated to operate down to 600 feet in depth.

These pumps lift 300 feet to the 300 feet level, and deliver to

horizontal station-pumps erected at this level. The most modern

electric-generating plant, hoisting, pumping, and ore-compressing

plants, are at work upon this property. The mill is of the

best-class construction, with a capacity of crushing between 8 and 9

tons per stamp, with tube-mills, Butters' Patent Vacuum Filter, and

special methods of precipitation.

At both of these mines complete shops are established, including

iron-foundry and wood-working machinery. The shops are competent to

deal with the heaviest repair jobs on the machinery in use, and as

many spares as are found economical to manufacture, so that a large

staff of mechanics are kept busy in the shops.

In a new country like Salvador, it is absolutely essential, for

the establishing of the mining industry upon a firm footing, that

a large force of natives should be educated in the repair and

manufacture of the machinery and extra parts in use at the mines.

There are native Salvadoreans who have been educated in these shops,

and they have become highly competent mechanics, able to cope with

almost any difficulty occurring at the mines. The result of this

education will be that less and less foreign help will be required

to carry on the business in Salvador.

Anyone living in Salvador who desires to know of the "latest thing"

in mining and metallurgy is permitted, through the arrangements

which the Salvadorean Government has made with Mr. Charles Butters,

to take up any course of study he may desire.

CHAPTER XV

Transportation--Salvador Railway Company--Early

construction--Gauge--Bridges--Locomotives--Rolling-stock--

_Personnel_ of railway--Steamship service--Extensions--

Increasing popularity--Exchange, and influence on railway

success--Importers _versus_ planters--Financial

conditions--Projected extensions--Geological survey--Mr. Minor

C. Keith's Salvador concession.

The means of internal communication are perhaps more apparent and

more systematically undertaken than in any of the smaller States,

Salvador possessing at present over 100 miles of railway track and a

number of excellent roads and bridges, which are being added to and

improved continually. The only organized railway system at present

is in the hands of a British company, the Salvador Railway Company,

Ltd, and its relations with both the Government and the public are

of the best.

The concession granted to the company was dated 1885, but it was

four years later when a public issue was made--namely, in October,

1889. The concession is for a period of eighty years, dating from

April, 1894; at the expiration of the period the railway and all its

accessories become the property of the Salvadorean Government. In

the meantime, however, it is open to the Government to buy up the

existing railway in 1940 if it so desires, at a price to be agreed

upon or fixed by valuation. The railway company enjoys protection

from competition, and has also preferential privileges (except as

against the State) for constructing future extensions.

The road actually dates from the year 1882, when the first section,

from the port of Acajutla to the town of Sonsonate, one of the

most important in the Republic, and situated at about fifty miles'

distance from the capital, was opened for traffic. The distance

was 20 kilometres, or, say, 12-1/2 miles, the next section to be

finished being that from Sonsonate to Armenia, a further distance of

26-1/4 kilometres, or 16-1/2 miles, thus bringing up the constructed

line to 46-1/4 kilometres by the end of September, 1884.

From then onwards the rate of construction was as follows: From

Armenia to Amate Marin, 6-1/2 kilometres, or 4 miles, opened

for traffic September, 1886; from Amate Marin to Ateos, 3-1/4

kilometres, or 2 miles, January, 1887; from Ateos to La Ceiba,

and which forms a branch ending at this town, a distance of 10

kilometres, or 6-1/4 miles, March, 1890; from Ateos to La Joya, a

distance of 22 kilometres, or 13-1/2 miles, opened to traffic on

September 15, 1895; and from La Joya to Santa Ana--a very important

town of some 33,000 inhabitants--a distance of 29 kilometres, or 18

miles, opened in November, 1896.

From Santa Ana, which is another terminal point, the railway

receives a valuable freight in the form of agricultural produce,

such as coffee, sugar, tobacco, and various kinds of grain.

A continuation of the line was then made to the capital, San

Salvador, the extension from Sitio-del-Niño to Nejapa, one of 18

kilometres, or, say, 11 miles, being opened for traffic in February,

1898; while the last section, between Nejapa and San Salvador, a

distance of 20 kilometres, or 12-1/2 miles, was completed by the

month of March, 1900. The total distance of the track is, therefore,

155 kilometres, or 96-1/4 miles, exclusive of sidings. There are

some eighteen stations, including the terminals at Acajutla, Santa

Ana, and San Salvador; while the buildings, both here and at

Sonsonate, Sitio-del-Niño, and Quezaltepeque, are well built and

efficient structures in every way.

The gauge of the track is 3 feet, and the maximum gradient one of

3·75 per cent. The minimum curve radius is 359 feet 3 inches. The

interesting engineering features of the line are many, and these are

found for the most part upon the Santa Ana section, between that

town and Sitio-del-Niño. There are forty-one bridges, consisting of

through-truss, plate-girder, and rolled "I" beams. These run from 20

to 14 feet span, the makers who have supplied them including German,

Belgian, British, and American contractors. The principal bridges

are as follows:

+-------------------+--------------+-------+-------------------------+

| | | Span. | Made by ---- |

+-------------------+--------------+-------+-------------------------+

|At Kilometre 78·700| Deck-plate | 56 ft.| Aug. Lecoq, Hal, |

| | girder bridge| | Belgium. |

| " 82·600| Through-span | 78 ft.| Harkort, Duisberg, |

| | girder bridge| | Germany. |

| " 98·500| " " | 70 ft.| San Francisco Bridge |

| | | | Company. |

| " 188·700| Through-deck |140 ft.| Atliérs de Construction,|

| | girder bridge| | A. Lecoq, Hal, Belgium.|

| " 191·700| " " |140 ft.| " " |

+-------------------+--------------+-------+-------------------------+

There are a number of culverts, over sixty-six being of some

importance, besides several of minor interest, of 3 feet and under.

The road is exceedingly well ballasted from beginning to end, and

is maintained in an altogether efficient manner of repair and

orderliness.

[Illustration: SALVADOR RAILWAY TO ACCOMPANY SALVADOR OF THE

TWENTIETH CENTURY BY _PERCY F. MARTIN, F.R.G.S._ ]

In regard to the rolling-stock, this is equally well equipped and

maintained, the greatest care being taken by the management to see

that every car that is sent out is in a thoroughly sound state of

repair and cleanliness. There are in all eleven locomotives, of

which the following details will be of interest:

+---+------------------------+-----------------+---------------+-------+

| | | Cylinder. |Driving Wheels.|Weight.|

|No.| Makers. +---------+-------+------+--------+-------+

| | |Diameter.|Stroke.|Pairs.| Inches.| Tons. |

+---+------------------------+---------+-------+------+--------+-------+

| 1 |Prescott, Scott and Co.,| 12 in. | 16 in.| 2 | 38 | 17·50 |

| | San Francisco | | | | | |

| 2 |Baldwin Locomotive | 15 in. | 20 in.| 4 | 38 | 25·00 |

| | Works, Philadelphia | | | | | |

| 3 | " " | 15 in. | 20 in.| 4 | 38 | 25·00 |

| 4 | " " | 15 in. | 20 in.| 4 | 38 | 25·00 |

| 5 |Cooke, Patterson and | 16 in. | 20 in.| 4 | 38 | 30·35 |

| | Co., New Jersey | | | | | |

| 6 |Baldwin Locomotive | 17 in. | 20 in.| 3 | 42 | 36·74 |

| | Works, Philadelphia | | | | | |

| 7 | " " | 17 in. | 20 in.| 3 | 42 | 36·74 |

| 8 | " " | 17 in. | 20 in.| 3 | 42 | 36·74 |

| 9 | " " | 16 in. | 20 in.| 3 | 42 | 32·40 |

|10 | " " | 16 in. | 20 in.| 3 | 42 | 32·40 |

|11 | " " | 16 in. | 20 in.| 3 | 42 | 32·40 |

+---+------------------------+---------+-------+------+--------+-------+

In addition to the above, two other engines of precisely similar

make have lately been delivered to the Company by the Baldwin

Locomotive Works, Philadelphia, U.S.A. It is explained that the

native engine-drivers are now accustomed to these engines, which are

to be found in use upon almost the whole of the South and Central

American railways.

The rolling-stock on the Salvador Railway is maintained in the

same efficient order as are the stations and permanent way. It

consists of some twenty-three passenger coaches as follows: Eight

of first class, light but strong carriages, suitable for a tropical

country and fitted with wide seats upholstered in rattan; one

second class, only a trifle less expensively upholstered, but in

no wise less airy or comfortable; and four brake and luggage vans.

Of goods-waggons there are 161--namely, 1 workmen's car, 5 cattle

cars, 95 covered-goods and 60 platform cars. These cars are mostly

the manufacture of the Lancaster Carriage and Waggon Company,

Ltd., of Lancaster, and the Allison Manufacturing Company, of

Philadelphia, U.S.A. The company have recently erected some ten box

waggons at the well-fitted railway shops at Sonsonate, where every

appliance and the newest equipment of machinery are to be found.

The passenger coaches are also partly of British and partly of

American construction, the Lancaster Carriage and Waggon Company,

Ltd., and the Harlan, Hollingsworth Company, of Philadelphia, being

responsible for this part of the equipment.

In the month of April last a change took place in the general

management of the Salvador Railway, when Mr. C. T. S. Spencer,

the newly-appointed chief, proceeding to his post via Mexico City

and Salina Cruz. Mr. Spencer served his pupilage with the London

and South-Western Railway, mainly on the North Devon and Cornish

branches. When out of his articles, he accepted an appointment as

District Engineer on the Abbotsbury Railway, near Dorset, which

line is now a part of the Great Western Railway system. In 1886

Mr. Spencer went out to Rio Grande do Sul (Brazil), as District

Engineer on the Brazil Great Southern Railway, and subsequently

rose to the position of Chief Constructing Engineer. On this line

he built the Ibicúy Bridge, which still ranks as the largest bridge

in Brazil, being over a mile long, with some 70-metre spans resting

on cylinders sunk by the pneumatic process, which at that time was

in its infancy. When the line was completed, Mr. Spencer surveyed

an extension running into some hundreds of kilometres, and passing

through the beautiful district of Missiones.

Mr. Spencer, still a young man, then went to Salvador, and in 1889

he surveyed the La Unión-San Miguel line. This railway was partly

constructed by the Government, and its completion to San Miguel is

now being pushed forward. In 1892 Mr. Spencer went to Colombia as

General Manager of the Antioquia Railway, which commission he held

until the Government attempted to cancel the concession without

paying any indemnity to the company. He afterwards went to Angola,

and drew up the plans for a large railway scheme from the coast

inwards; a part of this line has since been built.

Upon returning to London, Mr. Spencer accepted the post of

Consulting Engineer to a railway-constructing syndicate in the City,

and a few years ago he was elected to a seat on the Board of the

Salvador Railway. Mr. Spencer visited the Republic in 1908, and on

his return pointed out to the Chairman that, owing to the opening

of the Tehuantepec Railway, a special steamer service connecting up

Acajutla with Salina Cruz would probably prove a paying concern. Mr.

Mark J. Kelly, the able and experienced Chairman of this railway,

with his customary quickness of perception, combined with his own

not inconsiderable experience of the Republic of Salvador, of which

for fifteen years he had acted as Consul-General in England, at once

fell in with the idea, and the steamship _Salvador_ was the result.

Mr. Spencer is an Associate Member of the Institute of Civil

Engineers, and a Fellow of the Royal Geographical Society. While

it is a subject of regret that Mr. Charles Stewart, late Manager

of the Salvador Railway, was compelled to abandon his post owing

to ill-health, the shareholders of the railway may be unreservedly

congratulated upon obtaining the services of so able and experienced

an engineer as Mr. Spencer.

Mr. John White Hinds, Chief Engineer of the Salvador Railway

Company, started in his profession at the age of fifteen, and

was for over a year in the shops of the Great Western Railway at

Swindon. He then remained for four years as a pupil with Mr. W. H.

Lancashire, C.E., of Sheffield. Three years were passed in London

studying, when Mr. Hinds went to America, and entered the shops of

the Chicago and North-Western Railroad. He has also seen service

in Chile, Peru, Guatemala and Salvador. In this latter Republic,

Mr. Hinds has acted as chief of the party of engineers on final

surveys of the Santa Ana branch of the Salvador Railway, while he

also went to La Unión, the largest of the Salvadorean ports, to

construct the railway from La Unión to San Miguel for the Salvador

Government. The line was only constructed to the extent of ten miles

or so, when a revolution broke out and the work was abandoned. Since

then--namely, in 1894--Mr. Hinds has been engaged upon the Guatemala

Northern Railway as Surveyor, and helped in the construction of

that portion of the line to the City. Mr. Hinds likewise completed

surveys to the town of Zacapa, on the same railway, and assisted in

the construction work between Puerto Barrios and Zacapa. Latterly

Mr. Hinds has been exclusively engaged upon the Salvador Railway, of

which he has been the Resident Engineer since 1903, and Permanent

Way Engineer since 1906.

One of the contractors who were connected with the railway in

the early days was Mr. Albert J. Scherzer, and it is interesting

to note that his nephew, Mr. George Scherzer Walsh, a young and

clever railway engineer, was also connected with the company. Mr.

Walsh accompanied Mr. M. J. Kelly and Mr. George Todd Symons (the

senior partner of G. T. Symons and Co., of 4, Lloyd's Avenue, E.C.)

to Salvador in the spring of 1910, upon matters relating to the

extension of the company's track and the appointment of agents for

the steamship service. Mr. Walsh did some good and useful work as

technical adviser on the ground, but, unfortunately, in the end

his services proved unfruitful, owing to the selfish and senseless

opposition offered to the company's contemplated extensions upon the

part of the American Syndicate, who hold a railway concession from

the Salvadorean Government to build new lines within this zone. At

the time that the American group protested--and protested, as it

seems, successfully--against any further construction work being

undertaken by the Salvador Railway Company, they had done absolutely

nothing themselves, and had not even presented the preliminary plans

to the Government. As will be seen, however, they have at last made

an attempt to commence work of some kind; but my latest advices

point to the fact that successful completion is still far from being

even within sight.

The property owned by the Salvador Railway Company, as has been

shown above, is an extensive and increasingly valuable one. It

embraces something like 100 miles of track, with its own telegraph

and telephone services; a long and well-built iron pier, located

at the Port of Acajutla, and which cost no less than $1,000,000 to

erect; as well as warehouses and a fleet of tugs and barges for the

prompt and efficient handling of the cargo.

Upon all sides one hears the services rendered by this company

spoken of in a manner altogether flattering to the management;

and it may be said in truth that in no other Republic of South or

Central America can one come across a wider consensus of opinion

favourable to a foreign-managed railway undertaking than in the case

of the Salvador Railway.

To the not inconsiderable assets above mentioned, the railway has

added a fleet of steamships to carry cargo between Acajutla, its own

port terminal, and Salina Cruz (Mexico), the Pacific terminus of the

Tehuantepec Interoceanic Railway. It is worthy of note that both of

these railways are managed by British corporations, a matter of no

small importance in view of the strenuous efforts of North American

interests to secure complete control over the transport arrangements

in this part of the world.

The Salvador Railway's first steamer, the _Salvador_, is a neat,

trim, and well-built vessel of some 1,200 tons, out of the yards of

Messrs. Swan and Hunter, of Newcastle-on-Tyne. It is fully equipped

with all the latest appliances for the quick and efficient handling

of cargo, while its passenger accommodation is of a commodious and

comfortable character. This handsome vessel has for some time been

firmly established as a favourite with the importers and exporters

of the Republic of Salvador, who now, for the first time in their

experience, are enjoying the advantages of rapid and reliable

communication with Europe and the United States of America, with

punctuality in regard to dates of arrival and departure each week.

As a matter of fact, this service now effects in about two weeks,

what could not be previously done in less than one month. The

appreciation by the public of these advantages is sufficiently

displayed in the circumstance that the S.S. _Salvador_ carries

something like three-fourths of the imports and exports of the

country, to the great disappointment, and even dismay, of the older

lines. Other similar vessels are being built for the Company by

Messrs. Swan and Hunter.

The company has in view the rendering the same services to the other

Salvadorean ports as that now offered to Acajutla and the Mexican

port of Salina Cruz. An important local trade between Mexico and

Salvador, to the mutual advantages of both, is now being built

up, thanks to the initiative of the Salvador Railway Company in

establishing this steamship service.

How successful the company's fleet has proved is best seen from some

observations which were made by the Chairman at the last annual

meeting of the proprietors, December 13, 1910, and in which he

stated, _inter alia_:

"It is a matter of great satisfaction to me and to my

co-directors to be able to assure you that we have not only

emerged, in respect to this service, out of the experimental

stage, but we have actually become a fairly settled institution

as a steamship line on that coast. Instead of one boat, with

which last year we gave such a service to Salvador by the port

of Acajutla as they had never had before, carried out with

a regularity and strict adherence to schedule to which they

were utterly unaccustomed, your company is represented to-day

by three steamers, and is making the service from Salina Cruz

clear down to Nicaragua, embracing all the ports of Guatemala,

Salvador, Amapala, the only Honduranean port on the Pacific,

and Corinto. In barely a year we have found ample reason for

increasing our service to three vessels, two of which are

chartered boats, while we may be able to put in hand the

building of a second boat of the same type as our first. This

satisfactory result has only been attained by untiring effort;

but we have reason to believe that your steamship service

has arrived to stay, and that it will be represented by a

substantial figure in the earnings in the future. The service

has won deserved popularity by reason of its being carried out,

as I have told you, with adherence to a schedule, and we now

frequently receive in London applications from Central Americans

travelling about Europe with their families to reserve cabins

for them on our steamer _Salvador_. Mails are now sent by this

service of ours in connection with the Isthmus of Tehuantepec,

and reach Europe in about sixteen days instead of a month; while

the planters get their produce to European markets in little

over thirty days, against forty to fifty by way of Panamá,

and over one hundred by way of the Straits of Magellan. The

passenger traffic on the _Salvador_, which we were all disposed

to regard as something that might take a considerable time to

develop, has already given results which you will understand

better when I tell you that generally the accommodation provided

for passengers on the _Salvador_ is fully taken up. During my

stay in Salvador I took advantage of the appreciation thus shown

by the public of our steamship venture to arrange with the

Government a contract for a subsidy, and we are now receiving

£100 per month in gold on this head. I had the honour of being

received by His Excellency President Diaz on several occasions

during my stay in Mexico, both going out and returning home, and

he promised favourable consideration by his Government of an

application, which we have since formally put in, for a subsidy

from that Republic, which is benefiting as much as Salvador from

the development of your steamship service."

[Illustration: DECK BRIDGE ON SALVADOR RAILWAY.]

[Illustration: STATION BUILDING AT SANTA ANA ON THE SALVADOR

RAILWAY.]

With such prospects the Salvador Railway seems destined to enjoy

a time of great prosperity; and, indeed, the outlook would be

practically undimmed but for the ever-threatening question of the

exchange. The high rate of sterling exchange constitutes a

very real and visible "fly in the ointment." Salvador, it may be

pointed out, has the advantages of a metallic currency, with no

fiscal paper money of any sort; but, unfortunately, it is a silver

currency, which is aggravated by the circumstance that the export of

silver, if not actually prohibited by legislation, is at all events

very difficult to bring about, inasmuch as official permission is

required, and is as often refused.

On the other hand, the banks are overstocked with silver, and are

willing to lend sums at what may, for these parts of the world,

be considered very low rates of interest--namely, 5 per cent. per

annum--which enables people, who would otherwise be compelled to

sell drafts against their exported produce, to hold them back, and,

by a simple understanding among themselves, keep the rates as near

to 200 per cent. premium as may suit their own interests.

The Salvador Railway Company, which has a silver tariff pure and

simple, has to buy sterling drafts, whatever the rate may be, in

order to meet debenture interest payments, the cost and freight

upon all imported materials for its various services, insurance

upon its properties, its London expenses--including directors'

remuneration--and towards this large expenditure the only sterling

contribution of the country is the Governmental subsidy of £24,000

per annum, which payment will terminate automatically in 1916.

In sending out their Chairman, Mr. Mark J. Kelly, therefore, in

1910, to endeavour to reduce the company's burden in this respect,

the Board of Directors undoubtedly made a wise move, inasmuch as

no one could possibly be better placed, by reason of his great

popularity and exceptional experience, than Mr. Kelly to conduct

such delicate and intricate negotiations. In spite of such influence

and personal weight, however, I am much afraid that the time is

hardly yet when any serious modification of the terms of the

company's concession--such as the granting of a tariff payable in

gold--may be looked for.

At a time when gold is in the neighbourhood of 200 per cent. premium

(_i.e._, 1 silver dollar equals 33 cents gold) this would mean an

increase in the tariff rates, and the Government can hardly be

expected to authorize that increase in the present circumstances.

As a matter of fact, the company's tariff is much below that of any

railway undertaking in the whole of Latin-America, of which I, at

least, have any cognizance. But the public are hardly likely on that

account to be any more disposed to fall in with an increase in the

railway's rates.

The outlook for the Salvador Railway generally is, as observed,

a hopeful one. It is admitted by all who are acquainted with its

operations that its advent and completion have materially aided

the development of the Republic's resources, and day by day the

expansion of its industries is becoming more apparent. The local

traffics, showing as they do gradual but consistent development,

are the outcome of the safe but conservative policy of the

management, whose relations, as I have already observed, with the

railway's _clientèle_ are of the most friendly character. If the

agricultural development of the portions of the country served by

the railway have been somewhat slow, the movements have, at least,

been consistent; and there can be little doubt that an intelligent

expansion of the Republic's magnificent possibilities is merely

a question of time. No permanent improvement must be expected,

however, to assert itself until the difficulties of exchange

have been overcome. While poor trade may have somewhat affected

the returns of the last two years, the rate of exchange has been

responsible for the greater part of the financial disappointment.

Possibly the poor trade is the cause of the exchange being so

high, as much as the exchange being the cause of the poverty of

trade. So far as the railway is concerned, the effect is certainly

twofold--directly, by reason of the loss upon remittances to the

head-office in London; and indirectly, on account of the prejudicial

influence upon trade.

There is a very general and perfectly comprehensible complaint that,

in spite of the better crops which have been garnered this and

last year, and the abundance of silver currency, actual sales of

merchantable goods have been less, on account of the high rate of

exchange compelling the sellers to continually mark-up their wares.

One result of this is that the merchants have ordered fewer goods,

and the railway has carried less freight.

Unfortunately, in Salvador--as in other parts of the world, our

own not excepted--there are several divergent opinions upon this

question of economics, and here one comes across as many individuals

who are in favour of a high exchange as those who decry it. The

planters, for instance, hold that the high exchanges constitute a

clear and legitimate bonus upon the value of the coffee, the indigo,

the balsam, and the other articles of export; while the importers

clamour loudly, and perhaps with some more reason on their side,

that the high exchanges, if, indeed, they are really of any benefit

at all to the planters, form no less a tax, and a very heavy one at

that, upon the goods consumed by the general public. Still worse,

however, they act as a deterrent to active trade and commerce,

since all goods sold must be marked-up at higher prices than are

customary, with the very natural result of a smaller consumption.

Thus, the public are disappointed, the merchants are grumbling,

the revenue of the country in its Customs-houses suffers, and the

railway and its shareholders are left lamenting--all because the

planters must be humoured.

This contention might also contain a little more force were wages to

advance in the same _ratio_ as the rate of exchange. But this is far

from being the case, for no advance in wages has followed upon the

increased premium upon drafts on London; while bankers of Salvador,

on the other hand, declare that they derive no profits on balance

from their exchange account. More often than not, so they say, they

suffer a loss, since the fluctuations in the rates are so eccentric

and so difficult to control that they are particularly favoured when

they succeed in covering the cheques or short-dated drafts, which

they issue on Europe by purchases of ninety days' drafts from the

planters, without actually incurring a loss.

The rate of exchange in Salvador to-day is a very high one--nothing

like that of Colombia, it is true, but at time of writing gold is at

160 per cent. premium. Here, however, it must be remembered there

is no official currency of paper whatever, the banks which issue

notes being subject to rigorous inspection and compelled to maintain

silver coin to an extent which reduces their issues of notes to a

mere matter of public convenience, rather than a source of profit

to the banks themselves. All this is of great moment to the welfare

and the future of the Salvador Railway, and has more than once been

explained at length by the capable and experienced Chairman, Mr.

Mark J. Kelly, at the meetings of the shareholders held in London.

The financial condition of the Salvador Railway is to-day a steadily

improving one. We see that for the last year (1909-10) the gross

receipts were better by £6,921; while the ratio of expenses was

also satisfactory, namely, 51·81 as against 54·68, a decrease of

2·87 per cent. Improved good-traffics were also met with, and

worked out at 1s. 1d. a ton in excess of previous figures. After

providing interest and redemption upon both classes of Debentures,

and interest at 5 per cent. per annum upon the Terminable Notes,

the amount available for distribution amounted to £8,565 13s. 9d.,

out of which was made a payment of 3 per cent. upon the Preference

shares for the year, leaving a balance of £1,065 13s. 9d., carried

forward to the credit of Net Revenue Account. Prior Lien Debentures

amounting to £3,600, and Mortgage Debentures to another £9,000, have

also been redeemed this year, making the total redemption £62,200 to

date of the accounts.

In June of next year (1912) the Terminable Notes, amounting to

£45,000, will be either paid off or converted into Debentures

probably bearing 5 per cent. interest. The exact financial position

of the company stands as follows:

Authorized Share Capital:

Preference shares, £250,000 (in £10 shares).

Ordinary shares, £250,000 (in £10 shares).

Of these, the whole amount has been issued, viz. £500,000

Debentures:

Authorized (5 per cent. Prior Lien) £250,000

(5 per cent. Mortgage) 660,000

--------

£910,000

Out of which a balance still remained unpaid off 847,800

Five per Cent. Terminable Notes Authorized and

including cost of issue 45,000

----------

Thus the company has a total liability outstanding of £1,392,800

Few of the States in Central America offer greater opportunities or

inducements for railway extensions than Salvador, and this in spite

of the fact that the country is generally mountainous, and is more

than well supplied with rivers, most of which for railway purposes

have to be bridged. It must be remembered, however, that Salvador is

the most densely populated of all the Central American Republics;

the country has therefore been very carefully surveyed, with the

idea of railway extension upon a considerable scale.

In the year 1891 the United States Government despatched

an Intercontinental Railway Commission to make surveys and

explorations, not only in Salvador, but in Guatemala, Honduras,

Nicaragua, and Costa Rica. The result of such enterprise has been

the publication of a voluminous Report, which was issued in 1898,

five years after the Commission's return to the United States. The

Report is altogether favourable for railway extension in Salvador,

and it speaks very highly of the enterprise of the Salvador Railway

Company, of which a description will be found in the preceding

pages. Previous to the despatch of the American Commission, the

Salvador Government had had a survey of the eastern portion of the

country made by Mr. Charles T. Spencer, an English engineer of

great experience, and who is now General Manager of the Salvador

Railway. There can be very little question that at some time in the

near future further railway construction will be proceeded with,

since the country is so rich in agricultural produce that a means

of transportation in addition to and other than that in vogue must

be introduced. In many parts of the country the ground is quite

favourable to railroad work, the soil being largely decomposed

volcanic ash, which stands well in cuttings, although there are

numerous spurs to be cut through in many of the districts surveyed;

these are in general all lava rock or conglomerate, offering good

material for ballast. In but few localities are any grades found

steeper than 2 or 3 per cent., or any curves sharper than 12°.

A Government concession for the construction of a railway from La

Unión to the Guatemalan frontier was granted on June 15, 1908, to

Mr. René Keilhauer, who was authorized to construct a line to extend

from the port of La Unión, on the Gulf of Fonseca, to a point on

the Guatemalan frontier. The line as projected leaves the port of

La Unión, and passes or connects with the cities of Usulután, San

Vicente and Cojutepeque, unites with the line already built between

the capital and Santa Ana, and proceeds to the Guatemalan frontier

to make connection with the Atlantic Railway of that country, and

which was inaugurated towards the middle of 1908. A branch line will

eventually, it is supposed, also run from La Unión to San Miguel,

the most important town of the eastern section of the Republic of

Salvador, and connection will be made with Ahuachapán to the west,

thus furnishing railroad links with all the principal Departments.

The total length of this line will be 360 kilometres, and the

contract carries with it the construction of a wharf at La Unión

of steel and iron, to be erected in connection with the railroad,

and capable of accommodating the freight handling of steamers.

The stipulation is made that the survey of the line shall begin

"within sixty days of the signing of the contract," and that the La

Unión-San Miguel section be completed "within eighteen months"--that

is to say, by the end of 1910; but this stipulation obviously has

not been carried out. Of the remaining sections of the railroad,

20 kilometres annually are to be put into commission. Government

assistance is guaranteed, and free entry for all material at the

Customs-house is assured.

Previously Mr. Keilhauer had been granted a concession for the

construction of a line of railroad from Santa Ana to the Guatemalan

frontier, the duration of such concession being ninety-nine years,

and carrying with it a Government subsidy of 3 per cent. per annum

of the cost of each kilometre, which was fixed at $20,000 (=£4,000).

The most important feature in this contract lies in the circumstance

that it covers the section of the Pan-American line belonging

to Salvador, as defined in the Convention which was signed in

Washington on December 20, 1907, on the occasion of the Central

American Peace Conference. As a matter of fact, work upon this

construction was only commenced on April 15, 1910, on the Eastern

Division of the Pan-American Railroad, and the occasion was

celebrated by official banquets, as is the hospitable custom

in Latin-America. It is significant that at the time that the

concession was obtained, and before any actual work commenced,

the name of Mr. René Keilhauer was used; but from then onwards

it disappears, and those of Mr. Minor C. Keith and Mr. Bradley

M. Palmer, both of the United Fruit Company, the former being

the President, are substituted. Mr. Keith has a firm grip upon

several of the Central American Republics, particularly Costa Rica,

Honduras, and Guatemala; while he has also extended his tentacles

to Nicaragua, with somewhat doubtful beneficial effects to that

Republic. Mr. Minor C. Keith is likewise the moving spirit in the

railroad from Santa Ana (in Salvador) to Zacapa (in Guatemala). This

line has a length of seventy-nine miles, and is of a standard gauge.

Although surveys had been undertaken and materials had been ordered

at the time of my visit last year to the Republic, nothing whatever

had been done towards active construction.

There are some critics of this contemplated line of railway who

consider it not alone one extremely costly to construct, but as

likely to prove a financial loss to the proprietors when finished

and open to traffic. It may be, of course, that this view is

unnecessarily pessimistic, but, inasmuch as hereafter the investing

public may be invited to take a hand in the enterprise, it is

desirable to present the other view for their careful consideration.

CHAPTER XVI

Ports and harbours--La Unión--Population--Railway

extensions--Lack of British bottoms--Carrying trade--H.B.M.'s

Vice-Consul--Port of Triunfo--Bad entrance--Proposed

railway--Acajutla--Loading and unloading facilities--Proposed

improvements--Salvador Railway connections--La Libertad--

Comandante and garrison--Loading and unloading facilities--

Cable station and the service provided by Government--The staff

of operators.

The western arm of the Gulf of Fonseca forms the capacious

and land-locked harbour of La Unión, which is situated on the

south-western shore, four and three-quarter miles above the

entrance. On the north side of the bay are extensive mud-flats

that contract the channel in places to less than a mile in width,

while another in front of the town uncovers at half-tide, virtually

cutting off all communication with the shore. This flat has

encroached upon the anchorage since Sir Edward Belcher's survey

was made, diminishing the depth slightly, and shifting the channel

a little to the northward. A small pier facilitates landing at

high-water, and on the outer end of it a light is sometimes shown;

but it is of minor value, being dimmed by the lights in the town

behind it. Coffee, cotton, hides, and balsam of Peru (so called,

although it comes from Salvador), are exported. Beef, poultry, and

oysters, can be obtained at reasonable rates. As ships find great

difficulty in watering here, it is recommended to anchor and fill up

at the spring, one mile below Chicarene Point.

Steamers coming to La Unión are given the following directions:

"If bound for La Unión, keep to port of all the islands, and

steer to come between Conchaguita and the western shore under

the volcano of Conchagua. When fairly in mid-channel, the

entrance to the harbour will be seen ahead between Punta Sacate

Island on the right and Chicarene Point, which terminates the

eastern slope of the volcano on the left. Steer nearly for the

Point, and even bring it a little on the starboard bow if the

flood-tide is running, as it sets across the shoal north of

Conchaguita. As the point is approached, open it a little from

the north end of Punta Sacate and run past, giving the island

the widest berth, as there is a rocky patch making out from the

south-west point. It has been recommended to keep Chicarene

Point close aboard, but a steamer drawing 15 feet touched a rock

in doing so; therefore a safe rule would be to keep a little to

the westward of mid-channel. During the springs the tide runs

through the pass at the rate of three knots an hour."

The port of La Unión is the largest in the Republic, but, in spite

of this fact, landing is sometimes difficult, and until some

constructional improvements are made it will continue to be so.

At present it is necessary to disembark from the steamer on to a

launch; from the launch descend into a small row-boat, and from the

small row-boat transfer to a "dugout." Even then the traveller is

not at the end of his trials, since he has to leave the dugout for

a ride on a man's back through several yards of surf before he can

reach _terra firma_.

La Unión has a population of 8,000 people, including a garrison of

1,000 troops. It carries on a considerable amount of trade, chiefly

in coffee exportation and foreign goods importation, in spite of

the difficulties of approach by sea. The advent of the railway

is likely to add to this volume of traffic, if only to a limited

extent. It is noteworthy, however, that the people of La Unión are

by no means enthusiastic regarding the approach of this railway, and

they speak very pessimistically as to its prospects. In conversation

with one of the leading citizens, I was informed that the railway

"is hardly likely to prove profitable, since it is in the hands of

the wrong people" (namely, an American group); and the case of the

railway at Puerto Barrios, in Guatemala, which is controlled by some

of the same entrepreneurs, is quoted as an example of what may be

expected. So indifferently are passengers treated in connection with

the Guatemala Railway, which is under the jurisdiction of the United

Fruit Company of Boston, U.S.A., that no one now will travel upon

it if he can possibly avoid it. It is quite probable, in view of

the much-improved steamship service offered by the Salvador Railway

(from Acajutla to Salina Cruz, Mexico), that this will continue to

be the principal means of reaching the United States and Europe and

for transmitting cargoes.

La Unión was at one time a port of call for the Pacific Steam

Navigation Company of Liverpool, which, however, withdrew their

service in 1898, apparently finding the competition with the Pacific

Mail Steamship Company of San Francisco too keen, and the carrying

business insufficient. The Pacific Steam Navigation Company sold

out their interest to the Pacific Mail Steamship Company, and since

then--much to the regret of all shippers and passengers alike in the

Central American ports--its boats have not been seen at La Unión.

In fact, no British steamers have called there except an occasional

Leyland or a Lamport and Holt steamer sent to load coffee, and

the reappearance of the British flag has been entirely due to the

efforts of the Salvador Railway Company.

The Pacific Mail Steamship's Company's freight charges are now $3

gold (12s. 6d.) per ton for carrying coffee from La Unión and other

Central American ports to San Francisco, U.S.A., but they formerly

charged $8 (33s. 4d.) per ton. The considerable reduction is due to

the severe competition which this octopus-like company has had to

meet with from both the Kosmos Company and the Salvador Railway.