As orders began to come in and were ready for exportation Germany suddenly realized that she was confronted with a problem which she had not seriously considered before—that of a national merchant marine. Without ships this vast business, now practically acquired, was at the mercy of the foreigner who had vessels in which to convey it to the markets across the seas. With the exorbitant freight rates which were beginning to be charged, as cargoes multiplied and ships became scarce, it became obvious that all this newly secured trade would be seriously jeopardized, if not completely lost, unless the entire situation was under the absolute control of the Government and in the hands of the German people. Accordingly the State took up the question, and to make a long story short, the result was the development of the enormous German merchant marine,—perhaps the most complete and perfect in the world—with subsidies from the national treasury, which enabled ship owners to quote a freight rate per ton so low, that it was cheaper to ship German made goods from Hamburg to Valparaiso, than from Hamburg to many of the interior cities of the Fatherland for home consumption. This last stroke of generalship in this business campaign for commercial supremacy gave Germany the greatest impetus toward reaching the goal upon which her eyes were fixed, and as a result her export trade as well as her import trade, increased by leaps and bounds, making her the envy of all Europe, a condition which in the opinion of many people undoubtedly had much to do with precipitating the European War.
This briefly is the story of how Germany secured control of not only Latin American trade, but much of the over seas business of the world. In the republics to the south of us the national effect of this commercial invasion is very noticeable. Natives were invited to visit and get acquainted with Germans in Germany, and when they accepted were the recipients of such courteous treatment and became so thoroughly impressed with the perfection of the German nation in every field of enterprise, that they returned enthusiasts on the subject. One of the results of this is seen to-day in the armies of Colombia, Mexico, Chile, Argentine, Venezuela and some of the Central American countries. They have all been instructed by German officers, imported for the special purpose and kindly loaned by the German military authorities—a fact worthy of serious thought when we think that some day Germany may turn covetous eyes upon some parts of Latin America. To see some of these troops march past with their peculiar knapsack, their goose-step and the pickelhaub helmet, makes one feel that one is in Germany for the time being, anyway. Throughout the length and breadth of Central and South America are to be found German delicatessen shops and hotels; German stores and breweries; German banks and steamship lines; German salesmen and German schools, each one dependent on the Fatherland for supplies, and in turn playing an effective part and contributing a strenuous share toward forcing Germany to the front in every way.
In developing local markets their methods were equally unique and practical. I recall for instance the first brewery started in Venezuela. Venezuelans knew of beer in much the same way that we of the States know of mate, the herb used so extensively in the Argentine, Uruguay and Paraguay, for making a beverage—that is they had read about it and heard people refer to it, but few really knew what it looked like or how it tasted. All were naturally more or less suspicious of it. Nothing daunted the phlegmatic Teutons who had invested their money in the erection of the plant in pursuing their stolid, predetermined plan of introducing beer as a national beverage in lieu of the light clarets and other wines, formerly so much in use in these countries. A building on the most prominent corner of the city of Caracas was leased and in it chairs and tables were arranged as in German beer halls, while adjacent to the bar at which the beer was served direct from the barrel, was a lunch stand which provided excellent delicatessen food. When everything was ready, invitations were sent broadcast to the better class families to come and accept the hospitality of the brewing company without cost for the purpose of becoming better acquainted with the health and strength-giving properties of real German beer. Physicians were “sampled” in detail and told when to prescribe and what to expect from this wonderful beverage in certain diseases and especially during convalescence. Within a few months’ time the saloon became a rendezvous of the elite. Ultimately beer supplanted all other alcoholic drinks in this particular city. The same plan was carried out in other towns and I am certain that Latin America to-day can boast of more breweries, per capita, than Germany. Other local trade problems were attacked and solved in the same sensible, simple and practical manner, the result always being that German products grew in favor and in demand.
England, France and Italy of course developed their business in these lands along much the same lines, but none of these nations showed the deliberately planned aggressiveness and solidarity of purpose, or the determined unity of spirit that animated the German. England did more to establish her connections throughout Latin America along the path of extensive investments in national and local securities, the building of railroads, the dredging of harbors and erection of docks, while France, relying upon the admitted and acknowledged fact that all the civilized world looked to her for its fashions, styles, millinery, articles of clothing and dress, toilet goods, and luxuries, very naturally took advantage of existing conditions and used this as a foundation on which to erect her trade. Whatever commercial prestige either Spain or Portugal acquired in these countries was due almost entirely to the presence of thousands of citizens of these nations, who created a demand for articles of home production, and this is relatively small.
In this simple but thorough manner was the trail to business success in this field blazed. The experiences of our predecessors, and the lessons they learned should stand us in good stead in our efforts and help to direct our feet from all possible pitfalls. In fact we should, by following and improving on their attempts, if this be possible, acquire a commercial supremacy in this territory in less than half the time taken by the Europeans.
XXI
METHODS OF DOING BUSINESS
The question of what method to employ in developing a business in Latin America depends primarily upon your capital and the nature of your product. Obviously we manufacture numerous things that these countries cannot use. Many of our manufacturers seem to be totally unaware of the goods suitable for these markets or their peculiar requirements. I have met a man in Brazil selling, or rather trying to sell, snow plows. It is quite apparent that no amount of exploitation or argument could possibly produce results with such a commodity. With the exception of a few of the more southerly cities of South America, and some located in the highest mountains it would be useless to send a representative to these fields for the purpose of introducing a heating system, no matter what virtue it might have. I know of an American canoe manufacturing concern advertising its wares in a portion of the Argentine which is absolutely dry and without navigable water, as a result of which imported bull frogs die of old age without ever having a swim. It therefore behooves one to make a full and exhaustive investigation through all possible sources of information, and ascertain if one’s goods are really appropriate for these lands. Another point worthy of consideration is that wares especially adapted to the uses of some countries may be totally unfit for others. Accurate preliminary data of a reliable nature may generally be obtained by addressing the United States Consuls located at the various seaports of the Latin American countries. These gentlemen are especially equipped for obtaining all the information necessary, and are charged by the United States Government to supply complete details to inquirers.
A Comparison of Climates
This map shows South America with its cities and countries placed just as far to the north of the Equator as they naturally lie to the south of it, in order to enable comparison at a glance of the climatic relationship between the United States and the South American markets. The effect is the same as if the map of the Western Hemisphere were folded together at the Equator and the impression of the South American part transferred upon the map of North America. The longitudinal position of every part of South America is thus correct.
The map at first glance would lead one to say that Argentina has a range of climate equal to that from the City of Mexico to Hudson Bay, but the climate of South America can’t be judged that way. A cold ocean current along the West Coast and a warm one along the East Coast greatly modify it. The altitudes of parts of the continent within the tropical zone also temper the heat. The extreme north of Argentina is described as having the climate of Southern Florida. The mean annual temperature at the very southermost part of Argentina is said to be about that of Maine with a minimum hardly lower than the moderate one of Puget Sound and a maximum no higher than that of Nova Scotia. All Argentina is said not to have the extreme range of temperature found in the United States. Going to show how greatly ocean currents offset latitude, the islands of Great Britain are also drawn in on the map in their position relative to the Equator. London is farther north than the northermost spot in the United States exclusive of Alaska.
(Reprinted by permission of the editor of The Americas, published by the National City Bank of New York).
The wisest and best plan, once you are determined to enter these fields, is for one of the heads of the firm or one of the leading officers of the company to make a preliminary tour through the lands in question for the purpose of studying the situation and ascertaining the demands existing for similar lines. On such a trip prices should be carefully observed, strict attention paid to duties, freight and other incidental charges. It is by noting and studying these conditions that you will be able to meet and overcome competition. Special care should be exercised in giving the natives just what they want and not in trying to foist on them the thing you wish them to have, even should it be better, cheaper and more practicable. With this object in view, local dealers and merchants should be interviewed and care taken to ascertain every detail that might possibly have any bearing on your future marketing plans. Being thoroughly prepared in advance helps materially in smoothing the road to be travelled. Samples of competing lines with prices and minute data of all kinds should be sent to the home office for reference purposes.