CHAPTER IV. Trade and Markets.
Guatemala, because of its nearness, is an unusually good market for the products of the United States. With the increase in the transportation facilities which will result from railway building and other transportation enterprises that will add to the ocean shipping facilities the business should increase greatly if merchants and manufacturers in the United States choose to take advantage of it.
Official support is given this view by the reports of the American Consuls in Guatemala. Consul General Winslow has frequently called attention to the advantages which may be obtained. In one report he stated that large quantities of groceries, flour, potatoes, shoes, drygoods, and clothing come from the United States, but Germany and England seem to have the lead in machinery and hardware. There is surely a fine opening in these latter lines for exporters of the United States, but they must be in position to push their goods personally, to give longer credits, and to take more pains with packing. In all, it is safe to say, there are $8,000,000 of American capital invested in Guatemala and there is an opening for much more, if it is backed by the right kind of management.
In a report, to the British Foreign Office in 1905 Mr. Hervey, the English Consul, stated that as far as actual volume of business was concerned, as shown in the imports and exports, there appeared to have been a distinct improvement in the general trade of the country compared with immediately preceding years. The imports were the largest for the past seven years. The revenue of the country showed a great improvement all around, being, in fact, nearly double that of 1903, the most important increases being shown in import and export duties, the former benefiting by the 50 per cent. of their total payable in gold, and the latter by the tax of $1 gold per quintal which has been collected throughout the year.
The outlook for the future was, the report said, more favorable than it had been for many years. The completion of the Guatemala Northern Railway would shorten the distance from Europe and the United States and promote trade. Already German and British steamers were calling at Puerto Barrios in addition to those of the United Fruit Company. The greater steadiness of exchange and the fall in the gold premium were further factors of importance in restoring confidence. With continued peace, and with it the prospect of increased labor facilities, so that the agricultural and mineral wealth to be won from the soil may attain to its fullest development, brighter days were dawning for Guatemala.
Articles Brought from Other Countries.
A general statement regarding the articles which Guatemala buys abroad and which therefore are of interest to exporters is as follows:
The principal imports consist of drygoods, almost exclusively cotton manufactures, brought from Great Britain, the United States, and Germany. In this branch British manufacture commands the market, the imports from the United States and Germany being relatively small. The more important articles are gray cloths; bleached shirtings, 7-8 and 9-8 prints; fancy cloths; gray, white, and blue drills; colored drills; handkerchiefs; gray and dyed yarns; Turkey red yarns; sewing cottons; trimmings; cotton blankets, etc. Of these goods about 75 per cent. are of British origin, 15 per cent. American, and 10 per cent. German. American manufacturers compete chiefly in drills, denims, blankets, prints, gray cloths, and bleached shirtings, while German goods imported consist chiefly of drills, prints, Turkey red yarns, blankets, and trimmings.
Woolen goods are not in very great demand; the principal lines are blankets, shawls, braids, hats, Berlin wool, and but few piece goods.
Hats are imported mostly from the United States, Germany, and only a few from the United Kingdom; shawls from Germany, principally; piece goods from Germany, France, and the United Kingdom.
Silks are not in demand, excepting floss silks imported from China, ribbons from Switzerland, France, and Germany. Regarding hardware generally, approximately 50 per cent. is imported from Germany, 30 per cent. from the United States, and 20 per cent. from the United Kingdom.
The principal imports from the United States consist of machetes, axes, and hoes, besides tools generally of the better classes, corn mills, plows, sewing machinery, outfits for building purposes, saws, barbed wire, files, screws, cutlery, ropes, brushes, enameled goods, paints, and varnishes and breadstuffs.
The imports from the United Kingdom are chiefly composed of galvanized-iron sheets, galvanized-iron goods, coffee machinery, copper sheets, tin goods, machetes, hoes, sickles, picks, pickaxes, saltpeter, pans (used on sugar plantations), iron sheets, saws, padlocks, cutlery, saddlery, bits, spurs, brass valves and cocks, pottery, cartridges, also preserves and biscuits.
From Germany are brought all kinds of cheap tools, machinery, sewing machines, cutlery, machetes, bar iron, enameled goods, pottery, locks, screws, nails, window glass, brushes, paper, matches, stearin and ceresin, part of these goods being also brought from Belgium and the Netherlands, while France ships tools for shoemakers' and saddlers' use.
The articles which Guatemala buys in exchange for her coffee, sugar, fruits, woods and other products in the customs classification are divided into three groups; that is, articles of prime necessity, articles of luxury or convenience, and articles for the industries.
The first and most important group includes cotton and woolen goods, wheat flour, rice, corn, potatoes, salt, wax and stearine candles, matches, soap, petroleum, glass and earthenware, and kitchen hardware.
The second group covers the finer grade of woolens, silks, mineral waters, liquors, preserves in cans, manufactured tobacco, glassware, porcelain, toys, musical instruments, perfumery, etc.
The third group consists of coal, woodworking machinery, cured hides, raw cotton, sacks, lubricating oils, farm implements and a variety of machinery.
Class of Imports from the United States.
The shipments with which up to this time the United States has been most successful in furnishing Guatemala can be understood from a summary of the articles sent out under a consular invoice from various ports. The exportations from the port of New Orleans during a recent year were as follows:
From the port of Mobile shipments were as follows:
| Wheat flour | $10,196 |
| Cotton goods | 9,916 |
| Canned meats | 2,108 |
| Cornmeal | 1,316 |
| Hardware | 804 |
| Alimentary conserves | 777 |
| Butter | 676 |
| Beer in bottles | 572 |
| Petroleum | 523 |
| Vegetables | 507 |
| Coal | 420 |
| Hay | 405 |
| Dried fish | 376 |
| Footwear | 362 |
| Stearine candles | 317 |
| Matches | 300 |
| Condensed milk | 238 |
| Soap | 228 |
| Lard | 206 |
| Fruit preserves | 204 |
| Cheese | 173 |
| Rice | 168 |
| Miscellaneous food products | 1,700 |
The exports from New York, which average about $75,000 per month, are composed chiefly of the following articles:
From the port of San Francisco the annual shipments amount to approximately $1,000,000. The principal articles are flour, wheat, hops, corn, barley, oats, cotton, furniture, machinery, beers, wines, and whiskies. The articles imported at San Francisco are chiefly coffee, sugar, cacao, rubber, hides and lumber.
How the Commerce is Divided.
While the United States has a fair share of the trade the proportion is not as large as it might be if systematic efforts were made. In the last year for which statistics are available the foreign commerce of Guatemala amounted to $12,593,000, of which $5,041,000 was imports and $7,552,000 exports. Germany, which takes the bulk of the coffee crop, is the largest consumer. In the year quoted it took 53.79% of the total exportations from Guatemala North America (chiefly United States) 25.86%. England, 15.37%, and France 2.4%.
The exportation of the various countries to Guatemala in percentage terms was as follows: United States 36.59%; England, 22.62%; Germany, 19.97%; France, 9.21%; South America, 2.82%; Central America, 1.83%; Mexico, 1.69%; Spain, 1.54%; Italy, 1.32%; Belgium and Holland, 1.27%; other countries, 1.14%.
In detail the value of the goods imported by Guatemala in the given year was: from Germany, $1,019,000; United States, $1,442,000; England, $1,038,000; France, $175,000; Belgium, $114,000. No other country except the above exported to Guatemala goods exceeding $100,000 in value. Of the exports from Guatemala, chiefly coffee, as previously stated, Germany took $3,508,000; the United States $2,292,000; England, $1,282,000.
President Estrada Cabrera in his annual message commented on the balance of trade in favor of Guatemala and expressed himself very hopefully concerning the measures of internal development which could be carried on while the conditions of foreign commerce were so satisfactory.
Since a portion of the revenue of Guatemala is raised from the export tax on coffee it is possible to maintain a very moderate schedule of import duties and this is done. The average duty on the group of articles described under the heading of prime necessity is 23.67% ad valorem. On the second group 30.84% and on the third group 7.60%. The duties are equitably distributed so as to bear lightly on everything that enters into the industrial upbuilding of the country. Moreover, special concessions are sometimes made on material for railway and other enterprises which enter into the national development.
The general rules regarding the application of the tariff are very clear. They are formulated with a view to saving annoyance to shippers and are specific enough to avoid uncertainty. Import duties are not high. The list of articles which it is prohibited to import is a short one.
The charges for invoices on shipments to Guatemala are as follows:
| Ship's manifest | $10.00. | |
| Validating invoices of from | $1 to $100 | 7.00. |
| " " " | 100 " 500 | 10.00. |
| " " " | 501 " 1000 | 14.00. |
| " " " | 1001 " 3000 | 16.00. |
| " " " | 3001 " 6000 | 20.00. |
For each additional $1000 the Consuls will collect $2.
The government officials of Guatemala and the merchants gave hearty support to the project of an exposition ship or floating exposition which was undertaken on the Pacific coast in order to display American products and manufactures and at the same time familiarize American firms with the products of other countries.
Exchange and Banks.
In the conduct of its foreign commerce reasonably long credits are required by the merchants of Guatemala, but always under fixed conditions. When the coffee crop is shipped bills on Europe and on New York can always be procured at reasonable exchange and the obligations be met in this manner. Since the balance of trade is in favor of Guatemala there is always the certainty of funds for exchange.
Under President Estrada Cabrera's administration the banks of the country are subject to a regulation somewhat similar to the national banks of the United States. Various decrees have been issued governing the emission of banknotes. The latest decree institutes a special bank examination project and requires all the financial institutions to give an account of their condition and operations to this Department.
The following statistics as to the leading banks of Guatemala have been compiled from recent reports:
Guatemalan Bank (Banco de Guatemala).
| Capital subscribed and totally paid | $2,500,000 00 |
| Reserve fund | 655,000 00 |
| Contingent fund | 292,208 67 |
| Fund available for dividends | 200,000 00 |
| Manager: Carlos Gallusser. | |
Occidental Bank (Banco de Occidente).
| Capital authorized | $2,000,000 00 |
| Capital paid | 1,650,000 00 |
| Reserve fund | 1,200,000 00 |
| Contingent fund | 1,200,000 00 |
| Manager: Rufino Ibarguen. | |
International Bank (Banco Internacional).
| Capital subscribed and totally paid | $2,000,000 00 |
| Reserve fund | 1,507,000 00 |
| Contingent fund | 281,918 76 |
| Manager: Carlos B. Pullin. | |
Columbian Bank (Banco Colombiano).
| Capital paid | $1,776,000 00 |
| Reserve fund | 797,747 94 |
| Sinking fund | 454,189 84 |
| Fund available for dividends | 69,227 74 |
| Manager: F. L. de Villa. | |
American Bank (Banco Americano).
| Capital authorized | $1,200,000 00 |
| Manager: A. Beckford. | |
Agricultural Mortgage Bank (Banco Agricola-Hipotecario).
| Capital authorized | $12,000,000 00 |
| Manager: A. Prentice. | |
All these are banks of emission and discount with headquarters in Guatemala City and with branches in the other principal cities of the departments. They also to some degree supply the place of mercantile agencies and report financial standing of individuals, firms and companies upon solicitation.
It is known to be the great ambition of President Estrada Cabrera to place the finances of Guatemala on a solid basis during his present term. The rate of exchange under the stability now afforded and the improved industrial and commercial conditions has been steadily falling.
A final word concerning the opportunities for American enterprise is convincing when it comes from official sources. In one of his reports Consul General Winslow said:
"During the past few months the exporters of the United States have been doing some effective work in this Republic. There have been several commercial travelers here studying the conditions and taking sample orders. Many others have been asking for information from this Consulate-General, which has been able to give valuable information. If this field is properly worked and sufficiently long credit is given, practically nothing but American goods need be found in the markets of Guatemala, for they are generally conceded to be the best. This market is worth cultivating, for the next few years will see great development here. Everything points that way, and the natural resources are great. The opening up of the new railroad to the Atlantic coast at Puerto Barrios will do wonders for the country. More attention is being paid to the packing of goods shipped to this country. It is an important matter and cannot have too much attention on the part of exporters. Packages should be very firmly nailed and bound by band iron, so they would be difficult to open, as there is much complaint about goods being stolen from boxes in transit. I have had several compliments of late from the custom officers for the way shipments of American goods have come packed. It will pay exporters to pack well everything they ship. Dollars spent in this line will bring hundreds in profits. This is especially true for Central American ports."
Supplementary to the above was a report from Vice-Consul General Owen in which these observations were made:
"The following drygoods of American manufacture are becoming quite popular here: Brown cotton, all grades; cotton duck, Lindale, up to 6 ounces; light domestics; long cloth; gingham; cotton drill, checks and stripes (cheviot); blue and brown cotton drill; fancy calicoes and lawns; cotton ware, all colors. The piece of 24 yards is the most popular, although cotton cheviots, gingham, etc., come put up in larger pieces. Dress patterns in lawn and calico are frequently imported.
"It must be borne in mind that the importers of this Republic are for the greater part Germans, and their interest and inclination lead them to trade with the fatherland. England also is preferred over the United States, possibly because Guatemala merchants can more easily identify themselves in England and get better credits. American goods therefore are imported only when their quality places them so far ahead of the European article that the merchant is almost compelled to have them in stock. The American manufacturers should become better acquainted with this trade, ascertain who are worthy of credit, and extend it. The long voyage and delay en route compel the importer to ask long credits. It is sometimes two or three months after shipments destined for this city leave the manufacturer before they can be displayed in the store of the importer. The custom duty on about all cotton goods is collected on gross weight of the package. Great care should be taken with invoices for custom-house purposes; the goods must be described in exact phraseology of Guatemala custom tariff."