Part 10

The following table shows the imports and exports of the chief of the remaining islands:

_Islands_ _Imports_ _Exports_ St. Kitts and Nevis $1,250,000 $ 950,000 Antigua 830,000 850,000 Dominica 720,000 735,000 Montserrat 150,000 180,000 Granada 1,350,000 1,800,000 St Lucia 1,500,000 550,000 St. Vincent 600,000 550,000

All of these islands have a preferential duty treaty with Canada and Great Britain, despite which our own sales with them in 1913 were about $2,000,000.

Sugar and rum are their chief products. Dominica and Montserrat export limes, lime juice and citrate of lime. Granada and St. Lucia export cocoa, and St. Vincent’s chief product is arrow-root. Last year St. Lucia supplied 135,000 tons of coal to vessels, most of which came from the United States.

The Bahama group, of which Nassau with 13,000 population is the capital, exported last year goods valued at $1,300,000, of which amount $850,000 was in sponges and $350,000 in sisal, the United States taking $620,000 worth. The imports in the same period were $2,000,000, of which we supplied $1,400,000.

Bermuda, 20 miles square with 3,000 inhabitants, depends for its existence upon the tourists who visit it and what we purchase from and ship to its shores. Its chief exports are Easter lilies, potatoes and early vegetables, 4,000 out of 12,000 acres being under cultivation, yielding the islands $500,000 yearly. Of its $2,775,000 imports this country supplied $1,600,000, England $750,000 and Canada $350,000.

None of these islands is self-sustaining. They need the necessities of life; flour, foodstuffs, hams, meats, vegetables, butter, lard, candles, oil, shoes, cotton, textiles, drugs, soaps, toilet articles, glassware, machinery and corrugated iron.

The Quebec Steamship Company and the Royal Mail Steamship Company, sailing from New York, stop at the leading cities of the larger islands, an inter-island steamship service being provided for. The Lamport and Holt line touches both at Trinidad and Barbados on their northward trip and the United Fruit Company boats stop at Jamaica. The Hamburg-American Line ships call at many of these islands.

XX FOREIGN TRADE WITH LATIN AMERICA AND HOW IT DEVELOPED

No military campaign was ever planned with such exactness of detail and precision as that which characterized the preliminary movements of the exporting nations of Europe to acquire control of Latin American markets. When the Franco-Prussian war was over and the Powers of the Old World had settled down to a development of their resources, it soon became apparent that foreign fields must be sought in which to dispose of the excess products of their industry. With that object in view governments, trade associations, manufacturers, shippers, exporters, civic and social societies, colleges, merchants, and individuals united in one harmonious movement to accomplish this purpose. While each nation followed more or less the same general plan, still Germany attacked the problem with the thoroughness so typical of its people that its course in this direction may be taken as an example of what should be done in similar contingencies, and it may be well worth mentioning in detail.

To impress the Latin American people that their trade was courted by the nation as well as the individual producer, government commissions were dispatched from Europe to each of these countries, when possible in a war vessel of the nation sending them. With much pomp and great ceremony visits were exchanged between the members of this body and the authorities ashore and every effort made to develop a national feeling of regard between both parties, very much the same as we did when Commodore Perry opened up Japan to the world. Much time was spent in each country and nothing was overlooked that might be of any aid to accomplish the object in view.

Following these emissaries from the European Power came officials of trade bodies and business organizations, college professors and writers, each one studying the situation from his particular point of view and noting the things most required and the methods under which business was conducted. One of the subjects given the most complete and far reaching attention was the question of banking relations and how to best develop this important field, for it was early seen that this would form the most essential link in the perfected chain of business success. In the meantime the home government had caused to be printed throughout its territory, full and specific facts regarding the countries, the nature of their soils, everything obtainable about the flora and fauna, their mountains and minerals, the various waterways, climatic conditions and what crops could be grown with profit, with complete data concerning business opportunities. Commercial schools were opened wherein the student was taught Spanish and Portuguese, and perfectly drilled in Latin American business methods and etiquette. Realizing that much of their future success in these lands would be dependent upon having colonies throughout them, every effort was made to encourage emigration, the official authorities knowing full well that affection for the Fatherland and a belief in the superiority of its products, would materially help in the dissemination of its goods and keep up a demand for home made articles, until they had through their own merit obtained a foothold among the natives. As a direct result of this plan of colonization, fully one-fourth of the population of Chile are either German or of German descent, and the southern section of this country reminds one more of a portion of Germany in its type of building, the characteristics of the inhabitants, their dress, the nature of their business and their modes of living than of a Latin nation. The same is also true in the southern part of Brazil, where the Germans have many colonies, each provided with public schools in which natives are really taught German before acquiring their mother tongue.

The real ambassador of commerce—the traveling man—courteous, polite, affable, familiar with trade customs, national mannerisms, and speaking both Spanish and Portuguese perfectly was on the scene early, paying particular attention to the demands of the merchant. If a certain style of cloth was too wide, the obliging German made it of the dimensions required. If the color was too subdued for the aboriginal customer of the native merchant, the pattern and pigment were changed to suit the buyer. If plows were required with one handle instead of two, so that the farmer could have the other free for manipulating his cigarette, his wish was cheerfully complied with. The idea that filled the mind of the salesmen from Europe was to give the customer just what he wanted, and this rule was never deviated from. No attempt was made to force the storekeeper to adopt the customs of Europe in anything, but stress was laid on the fact that their only object was to oblige in every way the buyer, and cater to his demands. The suggestion from the storekeeper that he got six months’ time from England’s manufacturers, on this line of goods, was combated with the unanswerable argument that the seller would be pleased to bill the order at eight months if desired.

Samples of native-made articles that sold well were also purchased by the wide-awake representatives and sent home with full and complete data as to price, cost of manufacture, quantities consumed, and any other useful hint that practical observation might suggest, so that those in Germany might have an opportunity to experiment with a view to reducing the cost of the article and thereby obtain commercial control of this particular line. In a word, no stone was left unturned to accomplish the object always in view, namely—the complete capture of these markets.

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.

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.

It will soon be apparent, assuming that the official or representative who has gone over the field finds it pregnant with possibilities, that your business in Latin America may be conducted upon one of the following lines:

First. The opening of your own branch house for each country, or for a group of countries.

Second. Establishing an exclusive agency for each country with a resident merchant therein.

Third. Selling through your own representative directly and conducting your own shipping and banking.

Fourth. Marketing your article through some American export commission house.

Fifth. Exploiting your goods through your own representative and turning the account over to a local or native commission house or merchant for forwarding the goods and collecting for the same.

Sixth. Uniting with several manufacturers in allied lines and sending one salesman to represent you, on a co-operative plan.

Which of these particular forms of introduction is best adapted to your special line is a matter for you alone to determine.

Assuming that your capital and commodity warrants you in establishing a branch house in each individual country or in a group of countries, which is by far the best plan of conducting your business, the question of prime importance is that you should be located in or near the leading seaport in order that you may be close to shipping as well as to be able to superintend personally the discharge of goods and their clearance through the slow moving native custom houses. Great care should be taken to be on the leading line of railway, or near as many different lines as possible in order to facilitate the forwarding of goods to their destination and to the interior. These are vital factors and should be carefully weighed in determining your location. If your business is one requiring the carrying of a large and varied stock, it will be rather difficult to get proper warehousing accommodations especially in the metropolis or port and it may be necessary to erect your own building for this purpose.

The adoption of this system of introducing a line of goods requires careful planning and too much stress cannot be laid upon the selection of a tactful and experienced manager for your venture. Banking arrangements must be made. Municipal and state taxes must be provided for and the thousand and one details attended to that are unknown and unheard of in this country, each one of which requires patience and tact in solving and means the expenditure of money and the apparent wasting of much time. In other words the initial expense involved is far greater than a similar undertaking would be in the United States or Europe and only a business yielding large profits can be expected to withstand the immense financial drains to be incurred. While the salaries of the native office help will be comparatively smaller than the prices paid in the United States, still there will be noted an increased cost in maintaining a travelling force as well as the necessary American employes of the staff. Transportation charges are high and the cost of a salesman on the road in any of these lands means fully double the expenses of a similar man in this country. Travel facilities are poor, distances between markets long and much time must be consumed in each city visited, especially in the preliminary trips, all of which increases the cost of the traveller, and for the first few years makes him a rather expensive luxury. This must be submitted to with patience for upon his efforts depends your success. It therefore follows that the business to be done must be a large one to afford such preliminary charges and its future outlook must be of the brightest character. That such agencies can be maintained at a profit however is proved by the fact that all the large houses of Europe prefer doing business along this line, and within comparatively recent years this is the method being employed by the big American houses and corporations venturing into these territories. The Standard Oil Company, the Vacuum Oil Company, The Singer Sewing Machine Company, The National Cash Register Company and many of the larger mercantile houses and manufacturing concerns maintain their own branch offices in the principal cities of the Latin American countries and are entirely satisfied with the results.

The establishment of your own agency in a country indicates to the public your intention to become a portion of the native business community and gives you a solid standing with the trade besides bringing you in closer and more intimate touch with the consumer. It has many other advantageous features which must be apparent.