This is, in fact, the case; but as we shall note, it is possible to overdraw these attractions of the counting-house and the manufactory.
Latin America is a territory whose wealth and population are growing. There is an increasing class demanding the things of luxury and necessity which Europe and North America produce, and which Japan produces—for it will be unwise to leave these sharp-witted traders of Asia out of our survey. The Latin American peoples are plastic and emotional, imitative, pleasure-loving, fond of personal adornment. They are emerging from the poverty and austerity of the influence of the Colonial period. Some of them are very wealthy. Their women must be clad in expensive finery; their homes must be furnished with showy furniture; upon their tables must lie the delicacies that other nations enjoy.
So far they have not learned to exercise the ingenuity latent within them to make these things—although here is a factor we shall shortly consider—for themselves, and, in consequence, a stream of articles,—textiles, machinery, clothing, prepared foodstuffs, jewellery, furniture and all else—takes its way from foreign ports towards their shores.
It is part of our task here to consider what are the conditions of successful trading in these growing communities, but before doing so it will be well to sound a note of caution as to over-exaggerated expectations of trade and profits in Latin America.
In the first place an unlimited market for exported articles of luxury and need argues a considerable class of persons capable of absorbing such.
Compared with other communities, the purchasing class of Latin America cannot be regarded as very extensive. We have here a score of States or Republics whose total population perhaps approximates eighty million souls, all but a small proportion of whom, probably less than ten per cent., are folk of the poorest class, without purchasing power for more than the barest necessities or simplest articles of everyday life—articles which they themselves can produce—the great bulk of them illiterate Indians or Mestizos. Until the standard of life of these people be raised very considerably—and there is little evidence of this uplifting so far—they cannot develop either the power or the inclination to spend. Their masters—like masters all the world over—pay them the lowest possible wage, blind to the economic fact that this parsimony rebounds upon themselves, stinting production, output, consumption and demand.
Thus it is that the purchasing power of the Latin American population is a limited one, and markets and warehouses may readily be over-stocked, stuffed—as has happened on various occasions—with goods which cannot be sold, or must be sold at a loss.
Especially is this the case with articles of textile manufacture, bales of cloth, dress fabrics and so forth, when all the large emporiums and shops have had their shelves loaded and could digest no more. All the merchants of Spanish American capitals and large towns have experienced this, and although the cessation of imports during the war emptied the shelves and disorganized their markets, it cannot be long, given the keen desire to forward goods from abroad, when the same plethora will recur.
There is a further condition to consider, of still greater economic importance.
The tendency of nations in the future is bound to become more and more self-supplying in the manufacture or production of articles of everyday consumption. The spread of knowledge, the need for local employment, the high cost of production and—a very important matter—the high cost of carriage or transport, which latter, in fact, is becoming prohibitive in some cases, are all factors making towards the principle of self-supply.