Industrial and commercial South America

by Annie S. Peck

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.