CHAPTER XV

TRADE AND FINANCE

There is a certain element of interest, apart from money-making, attaching to commerce with that wide and varied group of peoples which come under the distinctive nomenclature of the Latin American Republics, and this is perhaps a fortunate circumstance. There is, as already remarked, an element of adventure about trade operations therewith which may be said to stimulate and assist enterprise--the enterprise of buying and selling in those remote and still half-developed communities.

Your merchant packs and dispatches his wares, marking his packages with names and destinations whose lettering and pronunciation, though they may cost him an effort to write or speak correctly, have in them something redolent of the blue seas and skies of the Tropics, upon whose shores they will presently be landed, to be handed over--the attentions of cigarette-smoking and gold-laced Customs officers satisfied amid much Castilian _chárla_--to the mercies in many cases of rude but patient muleteers, when, bound on the backs of mules they will be borne over mountain paths and through tangled jungles to many a distant interior village of the Pampas or the Cordillera.

And those returning goods which lie upon our quays, fresh from the hold of the steamer which brought them hither, have their own origin stamped upon them, and often betray by their aroma their special nature. Who has not walked upon the docks and remarked with interest the bales of coffee, the piles of hides, the sacks of ore, the packages of raw cocoa and other raw material sent hither, the product of industrious natives of the picturesque _hacienda_ and the mine?

Your commercial traveller, too, if he be a man of parts--and such he must be to treat successfully in these communities--smells the battle from afar, and, setting forth again, girds himself thereto, prepared to exercise that needful show of courtesy which even commercial dealings require in those lands where Spanish and Portuguese is the medium of barter or sale, and schools his tongue to speak in their softer accents.

The trade of Latin America is now a much coveted field. The English merchant, who long held this field, has now to contend with the keen competition of others. There was, before the war, the German, who by ability and craft had firmly and remuneratively established himself therein, and who now seeks to build up the trade edifice which the punishment of his criminal war has caused to fall. There is the American, as keen as any, studying by what means he may overcome the disadvantages which worked against his more successful exploitation of the Latin American sphere in the past, and thinking, perhaps, to predominate over his rivals. There are the French, the Italian, the Spaniard and others, all demanding their share; and coming forward now is the Japanese, acclaiming his right to whatever he may wrest, either from the sphere of his competitors or in the finding of fresh pastures.

From whence is this keen desire to profit by the trade of the Central and South American States? Despite its attendant risks, of distance, of long credits, of "slow payers" and repudiated debts, it must be profitable. There must be a demand for goods, a wide and sufficient market and a margin of considerable balance over costs and expenses.

This is, in fact, the case; but as we shall note, it is possible to overdraw these attractions of the counting-house and the manufactory.

Latin America is a territory whose wealth and population are growing. There is an increasing class demanding the things of luxury and necessity which Europe and North America produce, and which Japan produces--for it will be unwise to leave these sharp-witted traders of Asia out of our survey. The Latin American peoples are plastic and emotional, imitative, pleasure-loving, fond of personal adornment. They are emerging from the poverty and austerity of the influence of the Colonial period. Some of them are very wealthy. Their women must be clad in expensive finery; their homes must be furnished with showy furniture; upon their tables must lie the delicacies that other nations enjoy.

So far they have not learned to exercise the ingenuity latent within them to make these things--although here is a factor we shall shortly consider--for themselves, and, in consequence, a stream of articles,--textiles, machinery, clothing, prepared foodstuffs, jewellery, furniture and all else--takes its way from foreign ports towards their shores.

It is part of our task here to consider what are the conditions of successful trading in these growing communities, but before doing so it will be well to sound a note of caution as to over-exaggerated expectations of trade and profits in Latin America.

In the first place an unlimited market for exported articles of luxury and need argues a considerable class of persons capable of absorbing such.

Compared with other communities, the purchasing class of Latin America cannot be regarded as very extensive. We have here a score of States or Republics whose total population perhaps approximates eighty million souls, all but a small proportion of whom, probably less than ten per cent., are folk of the poorest class, without purchasing power for more than the barest necessities or simplest articles of everyday life--articles which they themselves can produce--the great bulk of them illiterate Indians or Mestizos. Until the standard of life of these people be raised very considerably--and there is little evidence of this uplifting so far--they cannot develop either the power or the inclination to spend. Their masters--like masters all the world over--pay them the lowest possible wage, blind to the economic fact that this parsimony rebounds upon themselves, stinting production, output, consumption and demand.

Thus it is that the purchasing power of the Latin American population is a limited one, and markets and warehouses may readily be over-stocked, stuffed--as has happened on various occasions--with goods which cannot be sold, or must be sold at a loss.

Especially is this the case with articles of textile manufacture, bales of cloth, dress fabrics and so forth, when all the large emporiums and shops have had their shelves loaded and could digest no more. All the merchants of Spanish American capitals and large towns have experienced this, and although the cessation of imports during the war emptied the shelves and disorganized their markets, it cannot be long, given the keen desire to forward goods from abroad, when the same plethora will recur.

There is a further condition to consider, of still greater economic importance.

The tendency of nations in the future is bound to become more and more self-supplying in the manufacture or production of articles of everyday consumption. The spread of knowledge, the need for local employment, the high cost of production and--a very important matter--the high cost of carriage or transport, which latter, in fact, is becoming prohibitive in some cases, are all factors making towards the principle of self-supply.

As an economic principle, this of self-supply is altogether sound, and its extension to the utmost is advisable and beneficial. It will help to eliminate waste; it will perhaps work against over-production and over-competition, both wasteful forces; it will tend to conserve the native resources of the globe, especially in fuel and raw material, which, during the "factory age," have been severely drawn upon and in many instances ruthlessly wasted. To produce a thing where it is to be consumed, we may repeat, rather than carrying it over seas and continents from distant producer to consumer, is a sound economic and sociological principle, so far little recognised.

The growth of such conditions, however, is not likely to be of benefit to trade in general. One of the first branches of manufacture to be affected thereby is the textile industry of Britain and other lands as regards the export trade. It has been shown in these pages that the Latin American countries, in some instances, have now set up their own mills and are manufacturing their own textiles. This is specially true of such countries as Brazil, Mexico, Argentina and others, where the production of "piece goods" and other textiles and articles of clothing is being extensively carried out with marked success, and with a corresponding limitation of import. These mills are often worked by water-power, and so are free from the difficult and expensive element of fuel. Labour, moreover, is much cheaper, even if less efficient, than abroad.

The same condition is growing as regards other manufactured articles, and there is no physical reason why the whole of the Latin American States should not manufacture many articles for their own requirements which at present they import. They possess within their own shores all the necessary raw material, except in some few instances.

But do they possess the skill to make these articles? There is little doubt that the Latin American folk, the artisan, the mechanic, the craftsman, are learning the methods of manufacture in many fields. They may not be an inventive folk, but they are an imitative folk, and possessed withal of great patience and painstaking ingenuity.

These last-named qualities are revealed in their ancient native industries. Any one who takes the trouble to examine the examples of these old crafts will often be struck by their beauty and ingenuity. In textile work they excelled. The old tapestries of the Inca and the fabrics of the Aztec, and of the Queches of Guatemala, of the Mayas, and, in brief, all others of the cultured or semi-cultured early folk of Spanish America reveal this, and examples are to be seen in the museums. The Indians of the Andes to-day make their own "tweeds" of sheep or llama wool; also their own felt hats. They weave ponchos of Alpaca wool that are waterproof, so closely are they hand-woven. They dyed these things in beautiful native patterns (often of much archæological interest) with native dyes which in some cases were superior to the imported synthetic dyes of Europe. As a matter of fact, it is unfortunate from a true economic and artistic point of view that these native industries should be displaced by outside products.

Again, such articles as the Panama hat of Ecuador and Colombia show of what the Indian is capable; as did the beautiful jewellery, in precious metals and stones, of the ancient culture-area of Central America, or the exquisite vessels and objects of adornment of the Incas, some of which still exist. The powers in stone-working are seen by the remarkable structures scattered over the whole Spanish American world, revealing the use of the chisel.

There is, however, no need here to labour this argument, but it is more than possible that a marked growth of Latin American craftsmanship will come to being again, under the stimulus of modern needs.

On the other hand, it is not to be supposed that the foreign manufacturer is likely immediately to find the ground cut away from under his feet. There are numerous articles of commerce which the Latin American folk do not, and possibly cannot, make for themselves, or not yet.

Among these matters is the important one of machinery. So far, throughout the length and breadth of the Latin American States, not a single locomotive has ever had its birth, and that in a land where the locomotive is so essential a factor. Nor is bar iron or steel rail rolled anywhere here (except possibly a little experimental work in Mexico and elsewhere). In fact, the manipulation of iron and steel has not yet come to being.

When we take note of the mines to be worked, the cotton, sugar and other mills and factories to be equipped, the railways to be built and maintained, the demand for motor-cars, the call for agricultural machinery, the use of household utensils of iron and steel, the wire fencing and a host of articles, it is evident that the field of trade here will not yet be cut off.

In the superior textile again, skill has not yet reached a capacity to supply all wants. The growing requirements of people to be clothed by the best class of goods will doubtless long keep up the imports of such, unless governments institute absolutely prohibitive tariffs--a matter upon which it is impossible to speculate.

It would be out of our province here to deal in detail with the various articles of trade in the Latin American field. There are recent sources of such information which fill all requirements.[41]

There is an important condition in connection with the conduct of business in Spanish America. This is, in the more leisurely and courteous bearing observed in such transactions, and the commercial traveller or his chief is well advised to study it.

The merchant or business man here will not be hustled or too brutally--in a commercial sense--approached. A friendly chat, inquiries as to matters of mutual interest, or upon current events, or regarding the members of each other's family, or other subjects general or politely personal, paves the way to the more concrete business of the occasion.

"Personality" counts for much in Spanish American relations, not only in society but in business. The Spanish-speaking people have a word for which in English we have no exact equivalent; that is the word, or adjective, _simpatico_ (or the feminine form _simpatica_). It does not necessarily mean exactly "sympathetic" or "personal magnetism"--to use the latter rather stupid English term. It means intuitive, comprehensive. A person who is _simpatico_ may command much greater attention than one who is not.

It is to be recollected that the Latin American man of any position is, or aims at being, a _caballero_, a gentleman, and it is to be remarked that this is a pleasing and valuable ideal, which might well be more closely cultivated amid the often boorish methods of Anglo-Saxondom.

Thus your commercial traveller should accept the proffered cigar or cigarette--there is generally such an offer--of his desired client, or offer one himself, and not attempt to come immediately to the point or instantly thrust his wares beneath the nose of the person upon whom he calls, hoping to make an immediate sale and rush out to perform the same operation on perhaps a rival dealer next door.

That "Time is money" has also its rendering in Spanish: _Tiempo es oro_, and it does not follow that business will be delayed by diplomatic methods. Yet this habit of courtesy should not merely be acquired as a trick. Business is sometimes carried through in a quicker way than in Europe or the United States, and the term the "land of _mañana_" has often been over-applied, at least as regards business transactions.

Again, it must be recollected that the Ibero-American--with a touch perhaps of Orientalism--does not always like to give a direct "yes" or "no." In the latter case, perhaps, he does not wish to hurt his visitor's feelings, and may leave him to infer a negative from the general conversation. This should be understood, and a direct reply not sought.

On the other hand, this method of courtesy does not necessarily apply to all operations of dealing. The rudeness of the shop-hand in Latin American towns is a matter of note often; his brusqueness and incivility. It is possible that this may arise in part from the custom of haggle; that is, of not having fixed prices for articles sold, and the customer, especially women, enter and argue to a wearisome length often, in obtaining a reduction, or finger the goods to such an extent as to exasperate the whole race of counter attendants. Be it as it may, courtesy by the shopkeeper is not a marked condition here. There are, of course, exceptions.

We shall also remark a further condition. The Latin American is generally more urbane in his conduct than the Spaniard. The pure Iberian is often a very direct fellow, blunt of speech and behaviour. Often his speech, when excited, is interlarded with the most tremendous oaths.

These matters of deportment are not necessarily intricate, and they should not be overdone. Frankness and sincerity always appeal. The Spanish American wishes to appear to be direct. He will tell you he is so. _Yo soy franco, señor_--"I am frank," he will frequently exclaim in the course of any argumentative conversation, or, _Vamos á ser practicos_--"let us be practical." It does not, of course, follow that he is always either frank or practical. Often, however, he is.

The Englishman generally finds that prejudice is in his favour in these circles. The _Ingles_ has a name for fair and straightforward dealing (which Heaven grant always is and always may be deserved!). Here we have the well-known and oft-quoted aphorism of the _Palabra de Ingles_; that is, the "word of an Englishman," which is reputedly held to be as good as his bond. He is supposed to carry out, without chicanery or mental reservation, what he has undertaken to do. His goods will be up to the sample; his fulfilment as his promise. He will often find this national trait appraised here, and often with disparagement of the methods of the traders of other nationalities, and this not merely as a form of subtle flattery.

Whether this high standard is always now kept, under the pressure of increasing competition, it may be left to others to determine.

Again, the excellence of British manufacture is generally looked upon as a foregone conclusion.

Cheap goods, such as textiles, however, in the face of this competition, wherever they come from, are probably often very free from reproach, and an enormous quantity of cheap rubbish must find its way on to the backs of the poorer wearers in these lands, of British and other manufacture.

Against the British manufacturer there is always the old outstanding accusation that he does not sufficiently regard the tastes or needs of his clients overseas, but adopts a "take-it-or-leave-it attitude," and this is a point writers on the subject generally bring forward. Doubtless it has been somewhat exaggerated.

Again, another theme is that of disregard of the important matters of packing, both as to external appearances of boxes and packages which are to be exposed for sale and the packing for means of transport such as the exigencies of the road call for here.

Many writers on British trade take it upon themselves to disparage their own methods and institutions, but this has been overdone. If there are defects in British methods, they occur equally in those of the traders of other nations. However, self-disparagement is a British characteristic in many things, and may readily be discounted.

The subject of finance, credits and so forth are matters which always come up for discussion here. Long credits are often necessary, especially in the case of the smaller merchants or dealers of Latin America, and in the smaller towns, where these have not capital for quick payments and the goods have to be sold before a return is reaped. There may be bad debts often, or dishonest customers, but as a rule the purchasing store-keeper is often kept in the path of rectitude by the knowledge that dishonesty will result in cutting off his supplies sooner or later, with consequent ruination.

To return to business. It is an error to suppose that the Latin American is lacking in enterprise, for the reverse is generally the case.

Again, the folk of these lands we are here treading are exceedingly assimilative of new ideas and novelties. They like to be thought "up-to-date." New appliances and luxuries catch their fancy. Motor-cars, gramophones, cinematographs and so forth are eagerly purchased. Were the roads better, bicycles would have had an enormous vogue, and may yet have. Aeroplanes are likely to be very prominent things in the future. Anything new, fashionable or pleasurable is regarded with favour, from notepaper to flying machines.

It is, however, noteworthy that the deeper refinements of life are less considered. Thus the Latin American folk are not great readers of books or purchasers of pictures. Nor have they a great love for antiques. It is true that books published in Spanish (or Portuguese) are generally limited in range and miserably printed and bound, and it is probable that a foreign publisher who should undertake to cater to a growing literary appetite here would find in it a remunerative business. Something, of course, has been done in this way, especially in Argentina, where imports of books from Britain have increased rapidly.

As to pictures, gaudy oleographs and calendars often do duty for these. But the love of pictures for themselves seems to have diminished at the present time among all peoples, even in Anglo-Saxondom: perhaps it has fled before more material delights; perhaps it may return.

The British Governmental attitude towards trade abroad--and Latin America naturally takes an important place--somewhat halts between two opinions, as concerns official representation. Shall British representatives be mainly diplomatic, ambassadorial, or shall they also descend to that less distinguished field of commerce? Shall the atmosphere of the Minister Plenipotentiary or that of the more commercialized Consul be paramount?

England--Britain--is constantly upbraided by traders and trade-writers on account of her alleged supineness with regard to foreign trade. We are accused of not doing enough, of not having sufficiently active representatives abroad, of not attending to the wants of foreign purchasers, of not knowing their languages, of not sufficiently pressing our wares upon them, and so forth.

But when all is said that can be said upon this subject, it must be recollected that Britain has had a very prosperous day as the workshop of the world, and has greatly enriched herself in foreign markets. There seems little doubt that she is disposed to rest somewhat on her laurels now. Apart from this, there are physical causes why it is difficult for Britain to pretend to hold predominance here, as well as sociological reasons. A steady export trade should be aimed at, not a feverish attempt at perpetual predominance.

We turn now to the important matters of foreign investment and finance in these widely diversified lands of Latin America.

The statistics of finance inform us that, among the oversea enterprises of the British capitalist, more than a thousand million pounds sterling are invested in stocks, bonds and shares in undertakings in the Republics of Latin America; securities quoted upon the London Stock Exchange. There are further enterprises not so quoted. From this considerable sum a steady stream of dividends flows to Great Britain, amounting to over eighty million pounds per annum.

In these statistics we have an indication of the great activity that has taken place in the past by the British individual, or joint-stock company in this field, from Mexico to Peru or Chile, from Venezuela and Colombia to Brazil or the River Plate.

Wherever we journey in Spanish America, we shall find our countrymen engaged in some important enterprise or industry. If we ascend to the high plateau of Mexico it will be upon an English owned and operated railway, from the coast of Vera Cruz, which we have reached upon an English steamer. If we enter the rich mines here we shall see English capital extracting gold and silver, which flows to London, and other minerals too. If we survey Mexico City, we shall see that it and its lake-basin is drained by a wonderful canal and tunnel, a work which the Aztecs and the early Spaniards tried to perform but failed in, and do we cross from sea to sea over the Tehuantepec Isthmus it will be upon a railway rebuilt, with fine harbours at each approach--a competitor, in some respects, with the Panama Canal--by English engineers and money, whilst the electric lights and trams of the capital are nourished from the same source. (The tramway system, indeed, from the _centavos_ of the travelling Mexican poor, pay or did pay the working costs before nine o'clock in the morning, leaving the rest of the day for the dividends.)

In South America we can scarcely take train in any of the numerous Republics without travelling over rails laid down by the genius of Albion, or without helping, in the purchase of our ticket, to contribute towards the exchequer of the British company which built or controls it. When we rise from the Spanish Main to the mountains of Venezuela or Colombia, it is upon lines made by British brains and purses; or when we go up from sea-level to the dizzy heights of the Andes of Peru or Chile, it is behind the iron horse whose trajectory or working has been rendered possible by Britain. The wonderful network of rails that traverse Brazil and Argentina, and bring forth to the seaboard the product of corn, cattle, coffee and all else, were built with gold from Lombard Street, as were the docks and harbours whence they discharge their wealth of products from the hinterland. Again, if we penetrate the dark reaches of the Amazon, England is giving gas light, electric light, water supply, dock service and much else there; and we shall have ascended that mighty stream on an English steamer. Nay, some of the rubber of these forests is extracted by the power of British gold. Banks are largely British.

England, in brief, has performed an enormous service in the New World with her money. The United States built itself up on British capital, so that every Republic in America has had cause for gratitude for the use of English gold. England is not a gold-producing country, but nevertheless a stream of gold has proceeded from her shores to nourish the most distant lands.[42]

FOOTNOTES:

[41] Such, for example, as _South America as an Industrial Field_ Koebel, in the South American Series.

[42] Excellent work as regards British trade and general relations was done by the British Diplomatic and Commercial Mission to South America in 1918, under Sir Maurice de Bunsen and Mr. Follett Holt; a Report of which was issued: and some return missions have been sent to England.