The British interest in these loans is largely dominant, but important sums of French money have also been invested. Brazil’s direct debt to France includes £10,400,000 for three loans with which the Bahia, Goyaz, and Corumbá railways were constructed; there are also state debts, that of the State of Pará being held by Meyer Frères of Paris, while the Société Marseillaise holds the bonds of the big Amazonas debt. Part of São Paulo’s debt is owed to the Société Générale, and the State of Espirito Santo owes nearly two million pounds to the Banque Française et Italienne, as well as large sums about which a dispute rages, advanced by the French Hypothecary Bank established at the port of Victoria.
There is a good deal of French money sunk in the Madeira-Mamoré railway, one of the Farquhar undertakings which cost the equivalent of more than six million pounds sterling, fifteen hundred livres, is said to need much reconstruction already (opened to traffic in 1912), and does no more than pay its way. French bondholders also hold part of Minas Geraes debt, and of that of Rio de Janeiro. French engineers, operating with French money, built several of the existing railways, notably the Auxiliaire de Chemins de Fer au Brésil with 1,400 miles of track; it was a French firm, the Compagnie Française de Rio Grande do Sul, formed in Paris in 1906, which put one hundred and fifty million francs into the port works of that southerly city, opened to shipping in November, 1916. French companies also began the port works of Pernambuco, checked by money paralysis after 1914, and constructed the new harbour facilities of Bahia.
When the much-discussed “Missão Baudin” came to Brazil in 1915, it was with the object of investigating the condition of the properties in which French money was concerned, and the chief member of the party was also credited with an effort to induce the Brazilian Government to guarantee the rather clouded State obligations to French bondholders.
German investment in Brazil is, as regards money, not of great importance; it is largely confined to the loans made by the Dresdner Bank, and to capital expenditures in the southern states, including the construction there of a couple of small railways. There has, however, been great investment of blood and energy, there are many strong German commercial houses and retail stores in all districts, and to Germany was due the first granting of long and easy credit facilities to Brazil. Germans have been largely interested in the coffee and rubber businesses. The Brasilianische Bank für Deutschland operates with a capital of fifteen million marks, and the Banco Alemão Transatlantico is another strong German financial house.
This summing up of European investment in Brazil, incomplete as it is, serves to demonstrate the extent to which Brazil has been opened up by Europeans. The European has asked for Brazilian raw products, brought ships to carry them, built ports for the ships to lie in and railroads to freight the products to the ports; has sold manufactured goods and lent Brazil the money with which to pay for them, and established banks for financial operations connected with the business created. Millions of hardy and industrious people have gone to live in Brazil and to bring the land into cultivation, to educate their children as Brazilians and help in the mental progress of the country.
When, therefore, some of the less thoughtful journals of the United States turned their eyes towards South America at the outbreak of the European War and protested loudly that this country was not getting her “share” of commerce, it was rather as if the cuckoo complained that she was not getting her share of the robin’s nest. To accuse Europe of monopolizing Brazilian trade is like accusing water of monopolizing the river. Brazil, in fact, like the whole of the Americas, had no trade until Europe created it by calls for natural products, supply of transportation means, and loans of money for development work.
Today the situation is changed. It was inevitably changing as North America herself became during the last fifty years herself a caller for raw products, and began to take great quantities of Brazilian coffee and rubber, drugs and hides. Her sales to Brazil, despite the drawback of the shipping triangle, have been increasing for some time along certain highly specialized lines, but sales and purchases are not sufficient to create a permanent link between countries, especially when conducted through the medium of a third person as freighter and banker. The European War brought about as no other awakening process perhaps could have done, a realization of the new duty of the United States to South America: it is part of her inheritance from Europe. It is the work that lies to her hand: if she will do it, there is no one better fitted at the present time; if she will not she loses an extraordinary chance for both service—and profit.
She must not think only of buying and selling, and when she is occupied with this trading she must remember that to her as to South America, sales of North American goods are less important than purchases of South American raw materials. It would not matter very much to the United States if she did not sell anything to Brazil: the probability is that more money has been spent on making sales, so far, than the profits amount to. What does matter is that North American manufacturers should continue to be supplied in vast and increasing quantities with South American hides for the use of leather manufactories; with ivory nuts for the button industry; with the coffee that cannot be grown in northern climes; with rubber and fibres and tannin materials; and with the minerals that exist in the sands and rocks of South America in unexampled variety and which can be there produced at half the cost that North America is forced to pay for labour.
Apart from trading there is a great need for more investment in Brazil, for more opening of great spaces, planting of fields, lumbering, road-building, mining, cattle-raising. There is space for twenty million people in the cool temperate zones alone, excluding tropical areas. Is the United States ready to take up the task which Brazil cannot perform alone, however seriously she attacks her problems? Is she prepared to devote to this work blood, brains and money?
Entry of North American interests into Brazil has been steadily increasing for the last ten years, and was hastened after the outbreak of the European War; there has been noticeable since then much more energy on the part of individuals and small firms. Before 1914 the bulk of United States work done in Brazil was part of the international campaign of such big firms as Standard Oil or the Singer Sewing Machine Company. Oil has its rivals in other companies, also with depots on the coast, but the Singer machine has almost a South American monopoly; locomotives, cars, elevators, most of the typewriters, electrical equipment, and quantities of agricultural machinery, are sold by American houses with branches in Brazil. Agricultural, printing and shoe machinery of United States origin also seems to make good sales.