An important factor in the trade relations existing between Great Britain and the Republic of Salvador is found in the Salvador Chamber of Commerce in London (Incorporated), which was established upon the initiative of Mr. Mark J. Kelly, F.R.G.S., in February, 1903, and duly incorporated under licence of the Board of Trade. It will be remembered that the President of the Salvadorean Chamber of Commerce in San Salvador, as well as being its Founder, is Señor Don Miguel Dueñas, Sub-Secretary of State for Agriculture. The first President of the Chamber was Mr. C. S. S. Guthrie, of 9, Idol Lane, London, E.C., with Mr. C. Rozenraad, President of the Federation of Foreign Chambers of Commerce in the United Kingdom, as Vice-President. The objects of the Association are to promote the trade, agriculture and industry of Salvador with the British Empire; to keep members informed and acquainted with all matters in connection with the trade of Salvador; and to promote study upon all questions relating to the various international Conventions which concern the trade between Salvador and Great Britain, as well as to act as commercial arbitrators at the request of interested parties, and exclusively in commercial disputes, where the interests of Salvador trade are at stake. The Chamber numbers some forty members, composed of merchants of London and other parts of the United Kingdom doing business with Salvador. Upon his resignation of the chairmanship of the Salvador Railway, Mr. Guthrie also resigned from the Chamber of Commerce, and, at the urgent request of the Council of the Chamber, Mr. Kelly, who with characteristic modesty had refrained from allowing himself to be elected as the first President, accepted the post (which is a purely honorary one), and is now the President of the Chamber.
CHAPTER XIII
Systems of business—Long credits—British and United States methods versus German—Making "good" stock losses—Question of exchange—Effect upon business—Drafts and speculators—Customary terms of payment—Central American banks as agents—Prominent Salvadorean Banks—The Press of the Republic—Prominent newspapers—Some of their contributors—Central American Press Conference.
The general idea prevails among both British and North American manufacturers, who have had little personal experience of the Latin-Americans, that extreme difficulties must inevitably be connected with all—or, at least, with most—transactions conducted in these countries, as far as payment for goods is concerned. I can but observe that the Latin-Americans as a race, if not more honest than Europeans or North Americans, are by no means any less so; and probably, if sufficiently reliable information were obtainable, it would be found that these former are, as a whole, quite as ready and able to meet their foreign obligations as any class of traders in either hemisphere.
As I have, however, pointed out in another chapter of this volume, it would be extremely unwise upon the part of any firm in Great Britain or in the United States to attempt to conduct their transactions by correspondence; an Agent is indispensable if difficulties in transportation and delivery through the Customs, as well as the collection of the account when due, are to be avoided.
In most of the Central American ports and cities, especially (in Salvador) at La Libertad, La Unión, El Triunfo, and Acajutla, the services of such Agents are obtainable. Moreover, some of the banks undertake to look after the interests of their correspondents who are recommended to them, and who are prepared to pay a fair price for the services rendered.
The usual method of conducting transactions of this kind is to draw upon the purchaser of goods for the amount of the invoice, and to negotiate the draft through some local bank, which will in the majority of cases collect the amount, provided the shipping documents be delivered in good order and are found to be free from consular or Customs-house objections. The banks, naturally, take no responsibility in the matter; and in any case the shipper should know something reliable about the firm and their financial status before entrusting them with the goods. Another mode is for the purchaser of the goods to arrange with his own bankers to open a credit with the shipping firm to be operated upon, against delivery of the documents to the bank indicated, or in such other form as may be agreed upon; while a third expedient—an unusual one, however, and not to be recommended—is to make a remittance to the buyer beforehand, either by means of a bank draft or cable transfer. The safest method to adopt is to draw bills on the importing firm at a usance,[4] agreed upon at the time that the order is taken, generally from 90 to 120 days' sight, and to pass the bill and documents through the bank for collection or sale. The draft is usually made payable in return remittance at 90 days' sight on London, Hamburg, or New York, but this is quite a matter of mutual arrangement between buyer and seller.