XXVIII
RECIPROCITY
Foreign trade to be permanent should be established on a reciprocal basis. To expect to ship a nation your raw or manufactured materials, receiving only in exchange therefor a monetary consideration, is neither equitable, sensible nor practical. It is decidedly lacking in business judgment and reflects on the sincerity of the country endeavoring to do its trade along such lines.
Perhaps the chief reason that European Powers have obtained such a foothold in foreign markets is due to the fact that they take in exchange much of the crude exports of these lands and convert them into finished factory products. This from an economic standpoint is as it should be. It gives employment to the citizens of the importing nations, develops and maintains their merchant marine, necessitates less material movements in the medium of exchange in payment for goods on the part of those concerned in the transaction and more firmly entrenches each in the other’s business and friendly relations.
The various countries comprising Latin America are in no sense manufacturing ones. They possess few if any factories or plants and these are usually devoted to the perfection of some local necessity, such as wines, cigarettes, cigars, soap, sugar, and other articles for personal use or consumption. They are however the largest producers of raw materials the world knows. Due to our shortsightedness as a nation, we have allowed the European merchant and manufacturer to take these products from Nature’s laboratory, elaborate the finished article therefrom and during each stage of its perfection, from its origin to its completion, we have paid a profit, not to one, but to several enterprising foreigners.
The Latin Americans—in fact no nation—will buy from us for sheer love or their high regard for us as a people, or even from dire necessity for that matter. Most of these countries achieved their independence from Spain because they refused to be further exploited by the mother country. It behooves us as modern and liberal minded, wide-awake business men, to develop our trade in these territories so that our exports to each country will be paid for by the things which we import from it. This is not a difficult problem to solve, especially as at the present time our imports from them exceed the value of our exports to them by approximately $100,000,000 yearly. This sum should represent the amount of trade expansion with the United States these countries will be in a position to stand on a reciprocal basis.
Another feature in this connection which has developed since the beginning of the present war is the monetary situation in Latin America. These countries as the world knows were borrowing nations, and practically dependent upon Europe for all of their financing. To-day Europe cannot aid them in this respect and they have turned toward us for assistance, thereby placing us in a much more advantageous position than we formerly occupied with relation to developing our trade along reciprocal lines, for a lending nation can always dictate to the borrowing one.
Following the stringency in the European money markets and their inability to lend further financial aid to Latin American enterprises, there has been a decided slump in property values of all kinds, thereby giving the American investor desirous of entering these fields an excellent opportunity to acquire controlling interests at the minimum expense in undertakings which will ultimately rehabilitate themselves as money making propositions. These conditions should not be lost sight of during the readjustment of values in this part of the world.
To be more specific, perhaps 80 per cent. of the world’s supply of bismuth comes from Peru. This metal is largely used in the arts and medicine. An Italian company owns practically all the mines. Germans and English buy the ore and ship it to their respective clients in Europe. On its arrival it is sold to smelters which produce the metal therefrom. Manufacturing chemists purchase this and convert it into the bismuth subnitrate used so extensively by the physician of to-day. This product is imported by the American drug broker who sells it to the jobber, whose traveller in turn disposes of it to the wholesale chemist through whom it reaches the local druggist and finally the consumer. It is safe to say that fully 30 per cent. of the prescriptions written by the doctor and compounded by the apothecary call for this drug. If the metal is to be used in the arts it goes through as many hands before reaching the ultimate user. It is not difficult therefore to see that from the mine to the consumer there are six or seven profits made, several of which might be eliminated, thereby reducing the cost of the article, provided the ore was brought direct to this country and the reduction made here. Furthermore instead of going around the Horn to Europe, the freight through the Panama Canal to an American port would be much less, consequently effecting a great initial saving. Why does not some manufacturing chemical house take advantage of this opportunity?
This same condition of affairs is true of cinconah, from which quinine is made, iodine, opium, belladona, menthol, castor oil, licorice, linseed and many other extensively used and well known drugs. What a chance exists in this field alone to establish a reciprocal trade, and at the same time to reduce the high cost of these medicines!
Last year Bolivia sent to Germany and England 50,000 tons of tin. We bought back 30,000 tons of this tin from the wide-awake Teuton and Anglo-Saxon merchants, or expressed in figures we contributed more than $16,000,000 to the bank accounts of these gentlemen. We are the largest users of tin in the world and Bolivia is the second largest tin producing country, with thousands of acres of unexploited tin fields yet to be developed. It is about two-thirds as far again from Bolivia to Europe as it is to the United States. With proper shipping facilities and the use of the Canal or by going to California, the saving in freight alone should be sufficient to interest some progressive concern in the handling of this article direct.