So far there has been but little attack made upon British bleached cotton goods, the proportion of which is 80 per cent. in favour of our country; but German importers, of whom there are an ever-increasing number in Salvador, are now seeking to increase the supply of these goods from the Fatherland. The United States, as yet, have done little in this direction. In yarns we seem steadily to be losing ground, mainly, as I understand, on account of our poor colouring. The people of these sunny lands insist upon the brightest of bright hues—the most vivid scarlet or vermilion for Turkey-red yarns; the deepest of blues; the prettiest of greens. The British products are lacking in these, so much so that many of the Turkey-reds spun in Scotland are sent to Germany to be dyed before they are exported to these countries as "British" yarns. Our next great competitor in regard to textiles is France.
British trade has been no more fortunate in regard to its machinery, hardware, or iron and steel trade connections with Salvador, and here it is the United States that is met with as a powerful and resourceful rival at all times. The great combine which was formed in the United States in 1909 to supply the wants of Latin-America with all iron and steel productions, has met with an immense success, so much so that even its organizers have expressed astonishment. The geographical advantages possessed are not the only ones. The United States Steel Produce Export Company is enabled to handle orders more promptly and much more cheaply than any European factory could do, but with these commanding points in its favour the Company is not satisfied. It has organized a system of canvassing either directly by personal application or by mail, which is both timely and effective. Immediately it is known, or even suspected, that any new railway or other construction is about to be entered upon, the Company despatches an agent to see the promoters, or, in the absence of this, forwards by mail a complete library of handbooks, cost estimates, attractive illustrations, drawings and code-lists, even prepaying a cable message when business is likely to result. The terms offered are often such as no European could or would tender, and, even if it were a question of direct competition, the Steel Company would probably win-out; but the prices which it quotes and the conditions which it imposes are of so tempting a nature that they stand alone.
It is to be remembered that practically the whole of the transportation arrangements in Central America, Salvador excepted, are in the hands of Americans, whose carefully arranged Pan-American Railway System is now fast approaching practical realization. When completed, it will be possible to journey from New York to Panama without change of car, and what this means for quick and cheap freights can be realized. In all probability there will be severe shipping competition to meet with, however, more especially on the part of the Tehuantepec Railroad, which is already carrying an enormous traffic, and is regarded with envious eyes by the Panama Railroad Company. With the exception of the Tehuantepec route and the Salvador Railway, the Americans now control the transportation arrangements of Central America, being thus enabled to regulate the freight charges upon all merchandise entering these countries. Already several cases of unfair discrimination have been recorded, such, for instance, as charging a British commercial traveller in Costa Rica a sum of $75 (£15) for the conveyance of his samples between the Port of Limón and the capital of San José, while an American drummer was actually granted a rebate of 50 per cent. off the ordinary rates, his expenses amounting to little more than $20 (£4) all told. In both cases the weight of the samples was the same.
CHAPTER XI
British trade declines—Suggested remedy—Distributing centres—Trading companies and branches—Unattractive cheap goods—Former hold upon Salvadorean markets—Comparative statistics between Great Britain, Germany, and the United States—Woollen and cotton goods—Absence of British bottoms from Salvadorean ports—Markets open to British manufacturers—Agricultural implements.
While everyone who has studied the question of British trade abroad is practically agreed that it is at present suffering from more than the average number of disadvantages, few have any real remedy to suggest that might possibly put a different face upon matters. One idea which has been suggested to me, however, is worthy of careful attention. This is to establish throughout the Central and South American States a number of retail British houses which shall act as agents and distributing centres for our home-made goods. I acknowledge that the notion is not a new one, since the enterprising Germans, who are, as I have shown, our keenest competitors in this part of the world, have long conducted such retail establishments, and have found them most beneficial in the extension of their business with the Latin-American countries. To open up new branches without the aid of some such method, it may be said at once, is almost, if not wholly, impossible. I admit that there are difficulties which will have to be encountered, as there are in all enterprises of this nature; but that these are not insuperable the Germans have themselves very clearly demonstrated.
In the first place, the establishment of these retail establishments, if undertaken at all, would have to be upon a large and a very comprehensive scale. For this reason it is possible that few British manufacturers would have the pluck to enter upon the project. The result of such timidity is that, in the minor branches of trade in the Latin-American Republics, the volume of which is continually increasing in importance side by side with the increase in the demand for the small luxuries and the conveniences of life, the representation of British manufactures is becoming an insignificant factor.
The remedy—or at least a partial one—for this, as already indicated, lies in the formation of large trading companies, which would combine a retail and wholesale business in all branches of imported goods, with the purchase of local produce for export. Apart from the advantages which such a company would enjoy, due to the magnitude of its operations over ordinary importers, its retail department would afford a practical means of advertising and placing upon sale all kinds of novelties, which naturally would serve to continually widen the scope of its operations. It would likewise be in a position, better than that of any private firm, to receive goods for sale upon commission; and by exporting produce it would be able to effect considerable economies in its remittances (especially in such countries as Salvador and Guatemala, where the exchange is often altering), while at the same time it could afford to pay better prices than its competitors. The question is already really answered by the success of the co-operative stores established in England, and it is upon some such basis as this that the scheme for the Latin-American Republics is laid. It must be remembered that in all of these countries the difference between the wholesale and the retail prices is enormous, and that the dealers' profits are exceedingly high. It is an idea which Mr. Lionel Carden, who is, perhaps, one of our greatest Pro-Consuls, and particularly gifted with common sense, has frequently urged in his reports to the Home Government, and perhaps for this very reason it has never been adopted. It is one which I cordially commend to the careful consideration of my readers.