Furthermore, it is necessary for American manufacturers to study the people and the market, more than has been done in the past. The Brazilians are particular what they buy, and want the best. They are not satisfied with just anything, as some seem to believe. Sometimes a change in established models might be profitable—at least it would be wise to print labels and directions in Portuguese for the convenience of the people, as well as to please them by such a compliment. Travelling representatives should be sent who not only speak the language, but understand a little bit of the Latin nature, and their methods of doing business. It is not possible to transact business in the same way that it is done at home, for there are bound to be more delays. The European salesmen understand that and cater to it. If the business is worth cultivating at all it is worth working in the proper way to accomplish results. I also believe in the establishment of American houses for the sale of American goods. At present the greater part of the American goods shipped there are sold through foreign representatives, who also handle competing goods of other countries for similar purposes. This, added to their natural preference, often leads to a secondary consideration being given to the goods of Uncle Sam. The packing system of American manufacturers has also come in for a great deal of criticism, because the goods are not packed securely. It would be an object lesson to these same manufacturers if they could see the care with which European manufacturers pack their goods. Everything is done up with the greatest care to prevent breakage and damage, while American manufacturers pack their goods in the same way that they would for a short shipment in the States; not taking into consideration the longer, harder and rougher handling to which they are likely to be subjected.
The volume of business in Brazil has reached large figures. The total imports for the year 1909, as reported by the Brazilian government, amounted to $177,731,232. This is an average importation of $10.00 for each man, woman and child in the republic. American manufacturers look with longing eyes toward China with her teeming millions. And yet the four hundred millions of Chinese used less than twice the value of imported goods as compared with the eighteen millions of Brazilians. The low wages, and consequently low purchasing power of the masses of Chinese, will, for many decades, prevent that country from becoming a great per capita importer. If the coffee situation improves there will be a wonderful increase in Brazilian imports, for many improvements are withheld in the coffee states at the present time on that account.
The exports for the same year were valued at $304,977,081. This leaves a trade balance in favour of Brazil of $127,245,849, which is a creditable showing. Some of the staple items of export are as follows: coffee, $167,375,850; rubber, $94,630,305; cacao, $9,000,000; tobacco, $9,696,685; hide, $9,097,705; maté (tea) $8,288,935; nuts, $1,121,278. The total receipts of the government for 1909 amounted to about $150,000,000, of which $93,297,952 was realized from import duties and a small balance was left in the treasury. The estimates for the present year are about $150,000,000. The total federal foreign debt is reported to be $369,087,633.38. This does not include a considerable amount of guaranteed and floating debt of the national government.
The system of raising revenue in Brazil is a perplexing and complex one as well. Some of the states have a very small land tax. It would be far better to increase this, and in that way force the breaking up of the immense estates to which some of the land is held. Instead of that, they resort to many petty little imposts to raise the necessary revenue. The principal one, of course, is an export duty on everything. Every one in the United States ought to take an interest in Brazil, for whoever drinks a cup of coffee or cocoa, eats the Brazil nuts, uses a bicycle, owns an automobile, wears rubber boots or mackintosh, has assisted in paying the running expenses of one state or another, as well as that of the national government. Therefore it is well to take an intelligent interest in what we aid in supporting.
The revenues of the national government are raised mostly by import duties. The most of these are levied by specific weight instead of ad valorem, so that sometimes articles which are heavy, but comparatively inexpensive, must pay a high duty. Then, in addition to regular duties, there are often special imposts levied for the construction of port works, or other public improvements. The states also have an export duty on everything sent out of the state, and sometimes even from one municipality to another. The farmer who hauls away a few bushels of beans or mandioca root must pay the export tax to the proper official, or stand a fine. All kinds of business are licensed. A merchant is sometimes obliged to pay a half dozen of these licenses, because of the different lines of goods carried. Each license permits the selling of certain specific goods. Then, in addition, there are stamp duties on all forms of commercial business, such as promissory notes, checks, drafts, receipts, etc. When you get a draft cashed a receipt is duly made out by the bank, a revenue stamp put on it and receipted by the recipient. Every article manufactured in the country bears a revenue stamp, except, as in the case with cotton goods, for instance, when so much a meter is paid to the government. Their idea is that in this way they must make up for the loss of import duties, by reason of goods being manufactured in the country. Another form of raising money is by giving out monopolies. In the city of São Paulo one man has the monopoly of the undertaking business. No one can get a burial permit until he has the consent of this man, which can only be obtained by paying him what his profit would probably be. This would depend on whether the funeral would be of the first, second or third class. The first-class funeral is very expensive, because it provides for a fine funeral car with four richly-caparisoned horses, two drivers and two footmen in elaborate livery, many carriages, and all other requirements after the same expensive fashion.
There are many lines of business that could be very profitably pursued, but it is necessary first to make a study of local conditions and requirements; and this can best be done by having a representative on the ground. The local political leaders should be consulted, so that satisfactory arrangements can be made in the way of franchise or concession for the conduct of business; and especially is this true if the business to be conducted is manufacturing. All these preliminaries should be attended to before the investment is made. These same conditions apply to many of the Latin countries, because so many of their laws are local. It is best to understand the local conditions thoroughly, and this can only be done by some one on the ground, and in touch with local conditions. After this is done the investment is safe, and in general these enterprises are encouraged in every way by the various state and municipal administrations.
Germany and England are engaged in a war for commercial supremacy in South America, and the competition is very keen. In a financial sense England practically owns Argentina, and has investments there of about $2,000,000,000. In Brazil she has perhaps $650,000,000 invested in bonds and business enterprises. It is all invested in things that have helped to develop the resources, and much of it under government guarantee. Germany has not more than half as much money invested, but her representatives have been making serious inroads on the commerce of Great Britain. At the wharves and in the warehouses the boxes and bales with German marks on them seem to predominate. In the stores German goods are driving out British manufacturers, and it is this aggressiveness that has developed the hatred of Germany one finds among Englishmen everywhere. The German caters to what he believes the Brazilian or the Argentinian wants. Some of the methods pursued by German houses, however, are reprehensible. If an American or English article proves popular it will not be long until there will be a German imitation on the market, similar in style and make, at a little cheaper price. It will probably bear an English name too, in order to carry the deception still further. Brazil is impartial in her purchases, and opens her hospitable doors to the commerce of the world. If there is any leaning or favouritism, it is, I believe, in favour of the United States. The goods sold by European merchants we can sell if the effort is made. Trade here, as in other parts of the world, is secured by the firm who can sell the best goods at the least price, in the long run, and the German will lose out in some lines, because their quality is cheap the same as their price.
The visit of Secretary Root and the battleship fleet did much to interest Brazilians in the United States; the former by the tact and the charm of his personality, the latter by the interest shown in South America. The people are still talking about both events. Money was spent lavishly. The state of São Paulo spent $250,000 on the occasion of the Root visit. Our diplomatic representatives have also been improved, and it would be difficult to find a better man for the place than our Ambassador to Brazil, Hon. Irving B. Dudley.
The Monroe Doctrine is hard for the South Americans to understand. They can not believe that it is an absolutely unselfish policy on the part of the United States, and it has undoubtedly been the cause of much political “jingoism” among their politicians. Every instance in which our State Department interferes, or takes a stand in Latin-American politics, is greedily seized upon by some element, and is frequently fostered by foreigners, who fear American influence and trade competition. The fact that it is not a clearly-defined or definitely promulgated statement leaves it open to unfair and unfavourable interpretation. Each person or country interprets it according to its own hopes or fears. The formidable strength of the United States and the recent policy of expansion has oftentimes caused the element of fear to predominate. In its best interpretation the Monroe Doctrine is rather like a big boy who makes himself a self-appointed guardian over the weaker one, which the latter does not want, and will not appreciate until he is in danger of a good whipping from a superior. It is better understood now than formerly, perhaps, but the atmosphere is still hazy when the Monroe Doctrine is mentioned. Two incidents happened while I was in South America which enabled me to observe the trend of newspaper criticism concerning this little-understood policy of the United States. It is a grave question whether it has not done more harm to possible American supremacy in South America than benefit.
“Order and Progress” is a good motto for any country. With order will come progress, and with progress order is more easily maintained. The future is painted in rosy colours by Brazilian writers and statesmen. All reasonable deductions point that way. Natural resources are there, and the greatest need is for people to develop them. It is not an El Dorado, for nothing can be accomplished without work, thought, and planning. The latent ambition of the people has been aroused, and they are looking forward into the future. The United States can take a much larger part in the development of the country than she has in the past. It is the hope of the writer that such will be the case. The American business man can do far worse than to make a little study of this resourceful republic. The people are awaiting the American merchant, manufacturer and banker; they are seeking the American scientist, educator and expert in all lines; and they will welcome the American traveller who is searching for a good opportunity of investment.