SOUTH AMERICAN TRADE
As to many it may seem presumptuous that one with no practical
experience should venture to discuss foreign trade, I beg with an
apology for my temerity to make a slight explanation.
On my six trips to South America (1903-1916) I saw and heard so much
of the shortcomings of my countrymen there, and meanwhile perceived
such ignorance at home that as early as 1907 I wrote an article on “Our
Commercial Relations with South America,” published in the _Van Norden
Magazine_, wherein I set forth many points which prominent men of
affairs have repeatedly urged upon the attention of their fellows, even
up to the eighth Annual Trade Convention at Cleveland, May, 1921.
My personal observation being supplemented by extensive reading, I
venture to hope that my remarks under this heading may be charitably
viewed by those who are wiser than I, and prove of some slight service
to those whose acquaintance with South American affairs is more limited.
* * * * *
In proportion to our wealth and our domestic activities our export
trade before the Great War was indeed small in comparison to that of
other nationalities. Slight interest was taken in outside matters of
any kind, even our publicists giving little heed to foreign affairs.
However, prior to 1914 there had been a slowly growing interest and a
gradual increase in our export trade, which from 1915 to 1920 showed a
more rapid extension. In 1915 our exports amounted to $3,500,000,000,
in 1920 to $8,228,000,000; to South America in round numbers, in 1915,
$144,000,000, in 1920, $624,000,000, in 1921, $273,000,000.
As to the past and future of this matter, with especial reference to
South America, two widely divergent opinions prevail; one, that we
have accomplished wonders, and that our trade with that continent will
be permanent and, with improvement in exchange and other conditions,
increasing; the other, that we have not done so well as we might and
ought; and that owing to our indifference, inefficiency, ignorance,
and bumptiousness, we shall be unable to retain anything like the
proportion of trade which we have enjoyed or so much of it as might
seem our reasonable share. With some ground for each opinion, the
truth as usual lying between, there is a possibility of either result
depending upon a variety of circumstances. The first is whether some
of us acquire a willingness to learn, or persist in certain mistaken
notions and practices. Well merited criticism of the methods of some
exporters and salesmen is far from applying to all. The “S” of a well
known concern is as familiar in South America as in North. Other great
corporations are famous the world over. Their success in foreign sales
has meant the employment of many men abroad and of a large number at
home, with the home business supplemented and steadied by the foreign.
In addition to the extensive pre-war export of some large companies,
many small ones, whose names are less familiar, have long sent their
wares to foreign lands.
A matter of prime importance is that the entire nation and people
become convinced of the value, the necessity even, of our maintaining
a large export and import trade, for we cannot have one without the
other. The provincialism of our thought and education, which have
a reciprocal influence, must be laid aside. Congressmen should be
able to feel that their reëlection will depend upon their ability to
grasp the problems confronting the whole nation, problems of labor,
transportation, commerce, finance, and world interests, rather
than upon their catering to a special class or securing a sectional
advantage. It would be well if they were high-minded enough to act for
the country’s best interests regardless of their future fate. To demand
ability and statesmanship of their representatives in these crucial
times is the privilege and duty of the people.
As a nation we have prospered because of the richness of our natural
resources and the enormous extent of our agricultural lands. The latter
being now for the most part occupied, with increasing population
our welfare will depend more largely upon the development of our
manufacturing industries and of our export trade. That the prosperity
of our manufacturing towns and seaports will be reflected in our
agricultural districts and will benefit the entire nation should be
self-evident. Supported by the people the Government will act in
accordance with its best judgment. In any case, every one should feel
that it shows a shameful lack of a sense of duty and of patriotism to
place one’s personal fortune above the nation’s welfare in peace no
less than in war.
For success in foreign trade as well as for safety at home our
Government must and no doubt will see that production is not stifled
for any reason, that our transportation on land and sea, and
communication by wire is unhampered by strikes or otherwise. If need
arises, previous restrictive measures should be removed and suitable
aid granted. With abundance of shipping which we formerly lacked,
equality with European freight rates must be maintained or competition
will be impossible. The establishing by our banks of needed branches,
fortunately made practicable, has been accomplished. The important
question of trademarks and patents may require further Governmental
consideration and diplomatic action, though some international
agreements have already been made. In certain countries the laws have
been unfair, prejudicial to the interests of honest manufacturers
and favoring the unscrupulous; some of whom have taken advantage of
the situation to the embarrassment of legitimate American business.
Trademarks have been practically stolen, through previous registration
by foreigners without title to use them. We must remember that the
same thing has been done by Americans in the United States, who have
registered here trademarks owned in Europe.
Of immense service would be a few free ports where raw material could
enter, and without paying duty be exported either as entered or after
being manufactured. Foreign countries have fostered commerce in this
way and by allowing favorable freight rates through subsidies and
otherwise. Competition under Government ownership has produced an
enormous deficit. While better results may be expected under private
ownership, our shipping will be at a disadvantage from difficulties
imposed by the Seamen’s Bill. It is said that American shippers may be
able to pay higher wages than European if relieved of the necessity
of employing larger crews and superfluous engineers. The Bureaus of
the Department of Commerce now perform very valuable service: the
Bureau of Foreign and Domestic Commerce, the Bureau of Standards; also
the Bureau of Markets of the Department of Agriculture. A consistent
foreign policy, undoubtedly to be formulated and pursued by our able
Secretaries of State and Commerce, will be of great service in relation
to foreign trade and for our general prosperity.
To the intelligent sympathy of the country at large and the coöperation
of the Government must be added the eager purpose of the manufacturer,
and the interest of young men who will make of export trade their
chosen field of labor. The manufacturer who contemplates entering this
broader field or who, through peculiar war conditions, has been brought
into it without preliminary investigation, should recognize the fact
that careful intensive study is a prerequisite for successful permanent
trade, a method which has been followed by many Europeans and by some
Americans with excellent results.
The book here presented it is hoped will furnish a useful groundwork
of information on South America, to be supplemented by further study
of details appropriate to the character of the prospective exports
and to any special conditions. In these countries generally, we have
observed a great diversity in the population and disparity in their
condition. One may hope that the latter will be diminished by advance
in wages and by the education of the Indians, by means of which their
producing and their purchasing power may be increased; but for a long
time two broad classes must be distinguished and catered to: the
cultured and literate, and the poor and illiterate laborers, especially
the Indians of the North and West Coasts. It is evident that the
requirements of a cultivated society where the customs and dress are
European in character, or of a homogeneous middle-class population,
would be quite different from those of Indians who sleep on the floor,
a whole family in one room. A personal acquaintance with the character
of the people, their manner of life, and their methods of business is
extremely desirable. If the head of a manufacturing industry is able
himself to make “The South American Tour” even in a hasty manner, it
will be to his advantage; if not, his export manager, if he has one,
should personally study the ground. Those who look merely for a slight
supplementary trade may best accomplish this by arranging with a
reliable commission house and following directions. If the manufacturer
decides to undertake the matter himself, he must plan a careful
campaign.
To make haste slowly is a good rule. Unhappily in the past some who
have attempted foreign trade have ignored the advice and experience of
others, and deemed information quite unnecessary. With the know-it-all
attitude, the idea that business is business everywhere, and that
goods and methods successful at home must be equally good for abroad,
before the War they proceeded in such a manner as either to make an
utter failure and abandon the project, or after large and needless
losses to secure profitable business. Criticism of two different kinds
made by South Americans should lead to the correction of faults;
otherwise there will be a complete loss of trade on the part of those
who are guilty, and much injury to our commerce generally from the
resulting bad reputation given to all Americans. One form of criticism
is directed to the character, methods, and manners of the traveling
salesman or agent, the other to the shortcomings of the home office.
During the War period when at times our goods alone were available,
even poor methods and service brought results. That the continuance of
such a course will be successful in the face of the severe competition
now arising is too much to expect. A friendly Englishman long engaged
in business in South America, in 1916 remarked that he was _afraid_ the
Americans would lose 60 per cent of their business after the War. A
Peruvian the same year declared that they would lose it _all_; so much
had he been disgusted by the arbitrary manner of some salesmen of the
type who said practically, “There is the stuff. Take it or leave it
as you like.” With a correct atmosphere in the home office and a more
careful choice of salesmen such crudeness would be avoided.
If the heads of the office are unable to visit the countries, there is
greater reason for wide reading. The “Movies,” which seem to entertain
many, present pictures of a few phases of life; but it is not by such
means that one acquires the intimate knowledge of a country and people
essential for a proper conduct of trade. For agreeable and profitable
relationship of any sort with those of other nationalities we must
realize that they also have their point of view; we need to consider
how they regard us. While we may believe our country to be the greatest
and best, and our ways and manner of living superior, we must bear in
mind that others are equally loyal to their own; though their country
may be smaller and in some respects less advanced, its people are
equally patriotic, they prefer their own way of living and methods
of business where these are different. Many South Americans have a
wider knowledge of the world, greater culture and taste, and these in
general are more punctilious in manners and dress than the majority
of Americans. We must therefore, while preserving our own tastes and
ideals, have equal respect for theirs, cultivating a catholicity, a
breadth of view, quite different from the spirit common among us, that
everything different is thereby inferior, that we can teach the world
everything, and that we have nothing to learn. Such an attitude is
merely a mark of ignorance and provincialism.
Aside from visiting the countries there are many sources of information
in regard to sales possibilities for any class of goods. The lists
of imports of the countries and of some cities are available in
commerce reports, with figures showing the approximate quantity and
ratio of these. While the list of our exports seems to embrace almost
everything, all of the goods are not sold everywhere; a knowledge of
the various markets, of the prices at which goods are sold, and of
trade conditions is necessary, to ascertain whether competition is
possible and if there is a prospective increase of present business.
Detailed information as to many lines of manufactures and markets may
be obtained from consular reports, from the branches of the Department
of Commerce located in a few cities, or by writing directly to the
Bureau of Foreign and Domestic Commerce in Washington. Many persons
have written to our Consuls in Latin America, often to their great
disgust, for information, not merely such as might be procured in
Washington, but what might be gained by looking in a geography or
reading one of many available books. The Consuls are continually making
reports with suitable information on matters which are within their
province. Membership in certain commercial organizations gives the
privilege of receiving trade information; the Philadelphia Commercial
Museum, the National Association of Manufacturers, and the American
Manufacturers Export Association, chambers of commerce, commercial
clubs, trade associations, such as one of jewelers and silversmiths,
all may be useful in this direction. The Pan American Union through its
Bulletin and otherwise furnishes much information about Latin America.
Export Trade Journals, other magazines and newspapers, are serviceable.
If from investigation it appears that there is a market for one’s goods
in any section or universally, that quality and prices can be such as
to make competition favorable, that the market can be enlarged, or
should there be none that one can be created, and a determination is
therefore formed to enter export trade, the next question is how the
goods shall be sold. The methods are various, but of only two kinds:
the direct and the indirect.
Direct methods include the establishing of branch houses; the
appointing of a general agent for one or more countries or of a local
agent for a limited territory; the employment of traveling salesmen;
and advertising in circulars, newspapers, or magazines, for mail orders
to be filled by freight or parcel post. The choice of methods, and the
appointing of agents or salesmen demand the greatest care. Exclusive
rights of sale have been given for the whole continent to a South
American, incompetent even to take care of a small district. Salesmen
have been appointed from the home office who perhaps had done well here
but were utterly unfit for work in South America.
It is desirable to have representatives of our own nationality. Others
if employed solely by an American Company may do their best for it, but
we now know that many Germans, possibly others, have taken agencies
for the sole purpose of keeping the goods out of the market. A good
salesman or agent of any sort should have as his first qualification
ability to speak Spanish fluently, unless his work is confined to
Brazil, in which case of course he must speak Portuguese. Next he
should be a gentleman and _simpático_. The spirit which led some youths
in the early days in Panamá to call the residents niggers, monkeys,
and savages is one which, though not indulged in outwardly to such a
degree, is sufficient to prevent the harmonious relations necessary to
make permanent, satisfactory business dealings. Unquestioned integrity,
unfailing courtesy, patience, tact, straightforward action, are all
highly important qualities, as well as those essential from a strictly
business point of view, such as critical knowledge of the goods, etc.
Confidence and friendliness count more in South America than at home.
Social qualifications are desirable. It has been said of the British
that they were too cold and exclusive, that the Germans were more
friendly. On the other hand, some Americans have felt that the South
Americans did not care for more than a business acquaintance. This is
doubtless true in many cases, but one who is cultured, sympathetic,
and well mannered is likely to have social opportunities which he may
accept to advantage.
Branch houses will best serve the large manufacturer, giving a standing
not otherwise attained, and best promoting permanent relations. From
these houses salesmen go to neighboring territory. The manager must
be a man of wide experience, familiar not only with the product and
home matters, but with the language, customs, and business methods of
the country in which he is located. Some corporations engage business
houses in different sections as local representatives or distributors,
with exclusive rights in restricted territory. Such arrangements,
supplemented by advice and literature from the home office may prove
effective in securing sales.
Those who cannot afford branch houses or the risk which may attend the
cost of a traveling salesman’s exclusive service are now able through
the Webb-Pomerene law to coöperate with other houses in the same or in
associated lines of industry. Both investigation and sales may thus
be profitably conducted. Advertising only, without the employment of
other agencies, has been highly profitable to many. It is said that
advertising in South America brings better results than in the United
States. To avoid utter waste of money careful investigation as to sales
possibilities and media should be made before planning a campaign. One
large mail order house has carried on an enormous foreign business.
Other firms have accomplished much in a similar way. Advertising is
done in journals and magazines published here and circulated there, in
local publications of various kinds, in moving-picture houses; also by
means of mailed circulars, and to some extent by electric signs.
The importance of correct technical and idiomatic translation in
advertising in Spanish and Portuguese cannot be over-estimated. Gross
and ridiculous errors have been made in the past. A book knowledge
of languages seldom prepares one adequately for such work. Foreign
translators are more numerous than formerly, but they, also, too often
make egregious blunders; not of the same character, but caused by their
not comprehending exactly the English which they translate.
If indirect methods of trade are preferred as involving less risk,
trouble, and preliminary expense, and if the medium is carefully
chosen, it may be more profitable. Export commission houses or export
agents will relieve the manufacturer of almost all care. One large
commission house not only acts as selling agent for manufacturers
through its branches in many parts of South America; it also operates
steamship lines, carries on banking and exchange, and handles important
financial transactions for South American Republics. Certain firms of
national or worldwide reputation and large capital have for many years
been satisfied to conduct their foreign trade through such a house. The
opportunity for commission houses of this sort was not overlooked by
foreigners and one company of these in New York did an annual business
of $30,000,000 before the War.
The experience of a commission house is an asset, which saves many
mistakes. Their experts have a wide range of information covering
American and European competition, and details such as suitable
patterns, correct packing, etc. The commission house may have its
capital tied up for six months in transactions, or did prior to the
more general use of the trade acceptance, while the manufacturer might
receive cash for his goods. For small people this method of sales has
many advantages, especially when first launching into export trade.
Conference and honorable coöperation are necessary and the protection
of the commission house from direct under-selling or from other unfair
dealings. The service of export agents is preferred by some, these
acting as salesmen, forwarders, or shippers, either for one or more
concerns, perhaps on salary and commission, or as independent agents.
After securing orders, by whatever means employed, the responsibilities
of the shipping department begin. The principles governing the
execution of orders would seem to be rudimentary. One wonders how a
business in this country could achieve even a small measure of success
when violating the most elementary rules of conduct. Yet this has
been and still is done in South American trade as recent information
from various sources shows, despite the fact that these things should
go without saying, and furthermore that they have been iterated and
reiterated for years.
First, the goods to fill an order should be precisely like the sample,
if there was one, not something inferior, as has often happened, nor
something just as good, or even better. If ordered without a sample
strictest attention should be paid to prescribed details. If it is
specified that cloth be 28¹⁄₂ inches wide or 25 centimetres, that is
what is wanted. If two-wheeled vehicles are ordered, what sort of
business is it that permits of sending, by mistake, four-wheeled
vehicles a distance of 5000 miles, even though the bill was made the
same and the goods were more expensive? as was done by a well known
manufacturer to his loss. The loss to the purchaser was greater, for
the vehicles sent could not be used at all in that country.
The assumption that the seller knows better than the buyer what the
latter wants is offensive if true. Generally it is not true. Mistakes
are unpardonable. Requests for particular colors, patterns, size of
bolt, and character of weave must be complied with if trade is wanted.
The willingness of the Germans to oblige in such matters largely
accounted for the rapid growth of their South American trade. The Latin
American business men are as acute and intelligent as any. They know
what they want and are discriminating buyers as to quality and price.
Criticism of the shortcomings of the home office is the second of the
two forms previously referred to. Lack of accuracy and of attention to
details is a grievous fault, apparently arising from want of discipline
and thoroughness in our homes and schools, a fault recognized by many
heads of offices here. The dishonesty of sending goods inferior to
sample or order, a practice injurious to the entire national trade as
well as to the guilty individual, shows an utter lack of patriotism, as
well as folly if permanent trade is desired.
Another elementary matter is that of packing. Woful tales of breakage
and loss from bad packing have been rife for years, and volumes have
been written and spoken concerning it. In 1916 an experienced traveling
man told me that before his last trip, in view of war conditions, he
had taken on the agency of some new people and received many orders
for them. He had sent explicit instructions as to packing and other
export details. But now he found his new customers swearing mad and was
booking no more orders for his new patrons: for they had paid not the
slightest heed to his directions either as to packing or forwarding,
with disastrous results. In February, 1919, a letter from Brazil said:
“We cannot imagine why your shippers ever accepted the travesty of
an export bale dumped on you by the spinners, and we must clearly
state that our factory will not accept any yarns which arrive in bad
condition due to bad packing.”
Unwillingness to profit by the knowledge and experience of others, the
belief that one knows everything without learning anything, is called
a peculiarly American trait, though happily it is not universal. The
British not only pack and handle goods in the best manner, but they
are careful to send and land them in all parts of the world by the
best route and with the least expense to the receiver, as the world
knows. Of course we can do the same if we take the trouble. The packing
department for the soldiers overseas showed the highest excellence. The
baling of clothes instead of boxing saved labor, box material, and two
thirds of the space, and goods arrived in better condition. Fifty-five
million dollars were saved at one plant in a year. Forty-nine million
dollars of this was cargo space, other things were rent, freight, etc.
Fifty-eight million feet of lumber of 30 years growth were spared.
The burlap required would be useful in South America. Square packages
instead of round are advantageous. Those who wish a share in foreign
trade must take the pains to do everything right. The most careful
man, familiar with the metric system, should be in charge. The scales
should show pounds and kilograms, and figures be given for net weight,
container, etc. Aside from careful packing to avoid breakage or other
injury as from water, dampness, or pilfering, instructions are often
given as to size and weight of package. Mules, donkeys, and llamas
usually carry two packages, one on each side; the ordinary load of each
is 200, 150, and 100 lbs. respectively, though some mules will take
300 lbs. for a moderate distance. For the interior, especially on the
North and West Coasts and in some sections on the East, these animals
are the only means of transport, and goods must be packed accordingly;
machinery in sections, etc. Many boxes of 1000 pounds weight have been
left on the dock or at a railway station, the goods a total loss.
To arrange the packing with an eye to the custom house is important,
both in order that the contents may be easily examined, and so that
fines or exorbitant imposts may be avoided. Directions and governmental
regulations as to giving separate weight of container and goods, and
the separation of different classes of the latter must be scrupulously
followed. Heavy fines are often imposed for trivial errors in packing
or invoice, and corrections of any mistakes by cable are expensive if
frequent.
Obligations of every kind should be fulfilled with fidelity though a
bad bargain has been made resulting in financial loss. On the other
hand consideration for the embarrassments of the buyer should be shown,
whether these are purely personal or the result of national conditions
such as followed the outbreak of the War or the conclusion of the
Armistice. After the unexpected cessation of War many orders which had
been placed here were suddenly cancelled under the supposition that
coöperation such as had always been extended by European merchants
would not be refused here. British representatives promptly _offered_
to cancel orders for goods that the buyers might not care to receive
under the changed circumstances, while the majority of Americans
made many difficulties: a contrast in conduct liable to influence
unfavorably future trade, especially when added to the fact that
vast numbers here cancelled orders and that the average American
manufacturer had taken advantage of the situation created by the War to
charge exorbitant prices in excess of those applying to domestic trade.
Thus some manufacturers who have cried out about the bad faith of the
South Americans, with no consideration for their difficulties, have
forfeited their confidence and friendship, with a probable loss of
future trade unless able to offer remarkably attractive bargains.
The utmost care should be taken in the shipping of goods as well as
in the packing. Promptness is an important feature. Where regular
sailings occur space should be engaged in advance, and the necessary
papers accurately made out in good season, in view of the many copies
of the consular invoices, the bills of lading, the clearance papers,
and the short hours of some of the consulates. To avoid the trouble
of attending to these and other elaborate details, many manufacturers
find it convenient to employ a Freight Forwarder who looks after such
matters including insurance of various kinds covering theft, damage,
and total loss. He will know the most favorable trade routes, look
after transfer and storage, and fill all requirements, if qualified for
his job.
No dealings should be initiated in any country until after the
registration of patents and trademarks.
Trouble should be taken to adjust any _bona fide_ complaint and
to satisfy reasonable customers. On account of length of time and
distance, especial pains should be taken to avoid possible difficulty
or disagreement.
The establishing of American banks in South America has been a boon to
manufacturers. The houses of Dun and of Bradstreet perform much service
for their clients in the line of credit information. It has been
suggested that the Government might collect information for general
private use. It may be said that experience shows losses in foreign
trade to be less than in domestic. Yet, as shysters exist everywhere,
suitable precaution should be exercised, guarantees required, or the
reliability of the house made certain.
The use of the trade acceptance, a negotiable note given by the
purchaser to the seller of goods, now becoming general, is of great
assistance to those who were deterred from entering South American
trade on account of the long credits which seemed necessary. Foreign
bankers invest in the commercial bills of other countries, knowing
them to be convertible into cash in those countries. Private houses
handling investments or commercial paper have added departments for
dealing in acceptances. The subject of foreign exchange should be
familiar, the fluctuations having an important bearing on purchasing
power and trade, while exchange itself is dependent on foreign trade
conditions, being an index of international transactions. Careful
consideration of this matter is necessary in quoting prices. In normal
times it was customary on English imports to reckon the pound as $4.90,
and in export as $4.80 to cover incidental expenses.
In certain lines, for example, in hand-made goods, it is impossible for
this country to face European or Asiatic competition. In some kinds of
machine-made goods we excel. In lines where competition seems difficult
the excellent suggestion has been made that costs may be reduced. The
lowering of the daily wage has in some cases occurred; and more may
be accomplished by diminishing overhead expense. The high salaries of
the heads and of numerous assistants in plants of moderate size and
the expenses of salesmen are often unnecessarily large, giving rise
to foolish and injurious extravagance, which indeed has permeated all
classes of society. Carnegie while building up his Steel Company, and
President McKinley smoked cigars costing five cents each, while some
modern salesmen pay 50 cents for one, with other things in proportion.
Some hotels charge 40 cents for a potato not costing one; a Washington
hotel asks 60 cents for a slice of watermelon when a whole one is
selling on the street for 15 cents. The head of a company suggests that
by reducing one-third of the personal and family expenses for luxuries
they will live longer and be happier; that one-third of the middle
men might be cut out; that the office and supervising class could
accomplish 25 per cent more and cut down office expenses one-third;
that the laboring man could increase his efficiency and output
one-third without injury and come nearer to earning his wages; and
that the unreasonable waste of material should be diminished. I would
however add that many heads of establishments and departments work
harder and more hours than the ordinary office force or laborer.
One would naturally desire to have his firm name on such goods as
permit this; “Made in U.S.A.” seems desirable where practicable. It has
happened that Germans handling American machinery have covered such
marks with their own. It may be noted that in South America many of the
large mercantile establishments of various kinds, dry goods and others,
are in the hands of British or German firms. A considerable portion of
trade in the large cities is conducted by other than the native born.
For the best development of our foreign trade it is necessary that
young men entering this field should be of higher type than the average
in domestic affairs, particularly those who will go to foreign lands.
The larger number may not be called upon to go outside of their town
or country, as many must be engaged in the export department, at
the factory or the seaport, or in commission houses and banks, as
export agents or freight forwarders, etc. Others will go abroad as
salesmen on tours, or to reside a few or many years in the capacity of
local agents, in branch houses of large companies, civil and mining
engineers, etc.
Many of both sexes have enough of the spirit of adventure to enjoy the
prospect of at least a temporary residence in another land. It is to
be hoped that those who desire the broader career will enter it not
solely for the pecuniary reward but with something of the spirit which
animated our soldiers, the knowledge that they may extend the prestige
of their country and uphold the best traditions of democracy; with the
feeling that their work, if well done, is patriotic in character, an
essential and splendid vocation, a dignified career for the development
of the commerce and the promotion of the welfare of a great nation.
Character, the manners of a gentleman, and educational preparation are
among the requisite qualifications. Of prime necessity is a familiarity
with one or two foreign languages; also a training that will develop
thoroughness and accuracy and the consciousness that these are
essential. Nothing will accomplish this better than a good groundwork
of Latin; which makes mere play the acquisition of any derived language
like Spanish, French, or Portuguese. A sound understanding of Latin
syntax is needed for easy comprehension of these languages, with
their varied forms and constructions, so different from our simple
English, which indeed one who is ignorant of any other language hardly
comprehends. The ability to conduct business correspondence correctly
and with at least some degree of the elegance and courteous phraseology
current in other lands where our brusque letters and speech are
disliked if not resented: Knowledge of office routine especially as
to the various papers to be procured and prepared in connection with
foreign transactions: An acquaintance with the requirements of shipping
practices, trade routes, types of vessels, freight rates, insurance of
various kinds, loading and unloading facilities at different ports,
and details as to the arrival and despatch of cargoes and vessels:
A study of the principles of commercial law needed to enable one to
decide business questions, disputes and misunderstandings, according
to equity and international practice: A close study of the economic
conditions which govern the production of the countries, of the social
institutions and customs, of advertising needs and methods, of shipping
facilities, of banking facilities and methods, credit practices and
requirements, and any discrimination in tariffs or regulations:
A study of the foreign trade practices and methods of those countries
already occupying these markets, the character and style of their goods
and their methods of securing and holding business: Acquaintance with
the financial and investment relations of other countries as affecting
international trade; with foreign banking practices and with the
mechanism of foreign exchange: A study of physical geography including
the natural resources, climatic conditions, and characteristic
peculiarities of each country: A knowledge of the history and
affiliations of the countries, with the character of their governments
as likely to bear on their commerce:--All these are matters which
must not be overlooked by any one who wishes to become an expert in
foreign trade. Some acquaintance with the racial origin and relations
of the nations, with their social customs, religious tendencies, and
traditions may at times help in determining trade possibilities. It
is important to realize that the cultivation of tact, dignity, and
judgment is necessary for success as a foreign representative, and
that such an one may prove a more valuable ambassador than some of
those occupying such position, to whom a similar training would be of
advantage.
Furthermore we must realize that no nation can sell largely abroad
unless it buys also, and that we must purchase from South America if we
expect to sell there. Fortunately they have many agricultural products,
which we do not produce, and other raw material of which we have not
sufficient. Yet probably we cannot take as much from them as we should
like to sell. WE MUST therefore INVEST, now that we are a creditor
nation, in the securities of others, the bonds of the countries
and cities; we must send our capital to develop public utilities
where these are lacking, as for sewerage and water supply. Electric
lighting plants and power, docks and railways, have proved excellent
investments. The better banking facilities now provided encourage these
on our part. The British, French, and Belgians have been beforehand
in this matter. The British have invested more than two billions in
Argentina, $1,200,000,000 in Brazil, smaller sums in Uruguay and Chile.
The Germans have not invested much money, their banks bringing chiefly
credit and making money by taking part of the business of local banks,
a practice not conducive to popularity. The United States, i.e., some
people, have invested $175,000,000 or more in Brazil, smaller sums in
other countries. Large opportunities lie open in this direction.
That loans should be made to foreign countries only on condition that
the money be spent _here_, seems a short-sighted policy, as also
restrictions on our export of gold, when our excessive holding of that
metal is a contributing cause of the unfortunate exchange situation.
Many Republics need railways, for which construction material and
equipment would be here purchased if here financed; but part of the
money must be spent on the ground; so with works of irrigation and
other public or private construction. If we must always be selfish, at
least our selfishness should be enlightened, and we should realize that
in the long run we shall gain more by manifesting a friendly spirit of
service and coöperation rather than by showing intense eagerness for
the “mighty dollar.”