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Of the total imports the United States supplies $99,814,538, or a little over one-fifth, while of the total exports they receive $207,384,623, or nearly one-third, leaving a balance against them of $107,570,065.

The financial part of all this business, he informs us, is carried on through Europe. European vessels carry the goods, Europe receives the commissions and freights, and sells most of the goods consumed in South America, while the United States is the largest purchaser. This condition of the trade, he says, is due to five facts, and when I name them you will agree with me that the time has now come when they should cease to exist.

First. We have no banks in South America; Europe has them every. where.

Second. We run few steamships to South America; Europe runs them to all her ports.

Third. We have no United States stores in South America; Europe has her stores in all parts of that continent.

Fourth. We sell for cash; Europe gives credit.

Fifth. Europe makes goods and packs them to suit the South American trade; we do not.

You thus see what an inviting field is here presented for aggressive effort by the United States to secure her share of the trade of our southern neighbors. Such a burning question has it become that the National Association of Manufacturers recently sent a commission of representative manufacturers to South America to study the conditions of trade in that country and to find out the requirements of their mar. kets. I am advised by one of the commission that they were received everywhere with the most cordial hospitality and their mission was everywhere regarded with the most intense interest, and that the con. sideration of questions bearing upon the trade relations between those countries and the United States received a powerful stimulus. Their people did not conceal their intense desire for trade and friendship with the United States if the conditions made it possible. Mr. Theodore C. Search, president of the National Association of Manufacturers and a member of the commission to which I have referred, in an article in the North American Review for December gives a clear exposition of the conditions of trade with the southern Republics and its distribution among the commercial nations and points out the means by which the share of the United States in that trade can be increased. He represents that the total trade of South America with Europe and North America in 1894 was about $700,000,000. Using the figures compiled by the Treasury Department and published in the Monthly Summary for April, 1896, he shows the foreign trade of the countries of South America with Europe and North America was in 1896 as follows:

Trade of the principal nations with South America, 1894.

[Imports from and exports to South American countries.]

Countries.

Imports.

Exports.

Total.

Brazil
Argentina..
Chile.
Venezuela
Colombia.
Uruguay
Peru
Guianas
Ecuador.
Other South American countries.

$157, 979, 961
123, 956, 158
58, 900, 700
19, 258, 609
14, 600, 982
12,721, 118
20, 335, 197
10,927, 855
5, 739, 729

5,769, 151
430, 199, 460

$96, 591, 768
57, 067, 950
23, 438, 948
10, 771, 920
14, 665, 159
15, 071, 901
5, 611, 094
10, 650, 528
2, 906, 708
2,978, 626

$254, 571, 729
181, 024, 108

82, 339, 648 30, 040, 529 29, 266, 141 27,793, 019 25, 946, 291 21,578, 383 8, 646, 437 8, 747, 777

Total

239, 754, 602

669, 954, 062

The distribution of this trade among the countries which participate in it is another interesting exhibit made by Mr. Search in the article to which I have referred. The following table, which he compiled from the Treasury reports, also gives the imports from and exports to South America by each of the countries named:

Trade of the principal nations with South America, 1894.

(Imports from and exports to South America.]

Percentage.

Exports.

Total.

Countries.

Imports.

Imports. Exports. Total.

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$32, 644, 450 $132, 791, 557
97, 118, 639 180, 610, 703
1, 385, 688 10, 829, 964
6, 652, 277 45, 135, 912

54, 375 1, 243, 915
49, 909, 800 134, 849, 100
34,811, 308 118, 300, 518
9, 620, 471 15, 135, 060
1,776, 336 17, 548, 548
4, 200, 033 10, 166, 748

188, 940 1,077, 360 1, 392, 285 2, 264, 677 239, 754, 602 669, 954, 062

19. 80
19. 46
1. 26
3. 65
1.37

20
. 20

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Total

430, 199, 460

Here is revealed a trade condition of the greatest significance to the American people. The United States is the largest buyer of South American products, taking about one-fourth of the entire export, while Great Britain, Germany, and France each export more than the United States to that continent. Great Britain sells to South America $3 worth of goods for every dollar's worth we sell her.

When we consider how intense is the desire of the people of the United States for a more extended trade with our South American neighbors, and that our feeling is so cordially reciprocated by them, it must be that some hindrances hitherto regarded as insuperable have prevented the more rapid extension of our commerce in that quarter. It is true that with the meager facilities we have enjoyed, our trade with South America has increased. In forty years it has grown from $30,170,160 to $145,170,224—nearly fivefold increase. This is a greater ratio of increase than the total foreign trade of the United States can show for the same period. But with a mechanism of exchange at all commensurate with the rank of our country and our capacity for production for the use of others, and the needs of our South American neighbors in lines whose production they have not yet achieved, our ratio of trade growth would have been much greater.

The lines on which our progress in developing southern trade in the near future will be most distinctly marked are pointed out by Mr. Search, and I again avail myself of his figures, so carefully compiled, to show the gleam of hope that lights our way to increased commerce when our enterprise has developed adequate agencies to carry it on. The following tabulated statement shows the kinds of manufactures most available for our southern trade, and in the export of which our greatest success will be achieved in the future, and presents a comparison between the United States and Great Britain in the relative extent to which the competing nations command the markets of South America. The table gives one more turn to the screw of our humiliation, but is interesting and instructive, and the torture may awaken us to a livelier sense of what our own interests and our dignity and character require of us.

Statement of exports of the manufactures named from United States and Great Britain to

South America for the year 1895.

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A comparison of our lack with the great abundance of facilities enjoyed by European countries for the South American trade brings into view as a conspicuous agency in European commerce suitable and convenient means of exchange. Every leading European nation has established banks in the South American countries to facilitate exchanges. I saw it stated recently that France is about establishing a bank in Brazil with a capital of $2,000,000 for the purpose of opening more direct financial relations with that country. French traders are not satisfied with existing facilities which compel them to operate through English banks.

ENGLISH AND GERMAN BANKS IN SOUTH AMERICA.

United States Consul Johnstone, at Pernambuco, Brazil, said recently that English and German banking houses were scattered throughout the entire eastern and western coasts of South America. These banks, while doing a general exchange business, are established especially for the benefit of the trade of their own countries. It is said that there are sixty incorporated banks in London with a capital of $294,000,000 exclusively devoted to international banking.

In the report of the commission, to which I have already so frequently referred, it is said, speaking of Argentina:

Four-fifths of the present banks of Argentina are branches of foreign banking houses, all of which are European. The United States is the only country attempting to do business without a banking representative, and it is the opinion of those well informed on the subject that any large increase in our business with Argentina will necessitate the establishment of direct banking connections. Minister Buchanan, after a careful investigation of the conditions, says: “This city (Buenos Ayres) offers a splendid field for American banking capital, and I am satisfied that an American bank, conducted as our banks are, would command great favor here, and find many advantages and facilities extended to it. I am equally certain that it would be the means of extending and enlarging our commerce with this country."

I do not doubt that trade might be increased between our own and the countries south of us by improved facilities for transportation and by catering to the tastes of the people and adapting our goods to their markets, but over and above all possible gain from these sources there is a large benefit to be derived from a coincident extension of the means of exchange. The mechanism of exchange is only second in importance to that of transportation. Improvements on both lines might well progress concurrently,

INTERNATIONAL MECHANISM OF EXCHANGE NEEDED.

It is not easy to see how the currents of trade that have been flowing so long across the Atlantic from Central and South America can be changed and made to flow north and south without the aid of an international mechanism of exchange which will afford facilities at least equal to those existing between this continent and Europe,

The indirect exchange, which has been our chief recourse in the past, entails great loss upon the United States and affords ample gains to European bankers, which American bankers ought to enjoy. This is obvious enough to all who understand the course of our foreign trade. Our imports from the south of us greatly exceed our exports, creating a balance against us on our trade ledger, while Great Britain exports to those countries largely in excess of her imports from them, leaving a balance against the latter countries. We pay our balance to South America indirectly with the British goods shipped to her in excess of what Great Britain imports from her. In other words, there is a tri. angular trade between the United States, Great Britain, and South America. British ships sail with goods from British ports to South America, thence to the United States with sugar, coffee, teas, and spices, and finally return to Great Britain with American cotton and food products. Not only do British interests enjoy the benefits of this trade, but British ships pocket the freights and British banks the commissions on the exchange required in the financial settlements.

To see how British bauks secure these advantages, we have only to look into the mode of conducting our commercial intercourse with our southern neighbors. Let me give you an illustration of financing for a shipment of goods from Argentina.

IMPORTING FROM ARGENTINA.

Take, for instance, a purchase of wool, which we will say costs in Argentina £1,000, or about $5,000. An importer here when he orders the wool from a merchant there (Argentina) furnishes a letter of credit of a London banker, which is taken out for his account in favor of the shipper. The shipper draws under this letter of credit at whatever usance is named, usually in South America at ninety days' sight, accompanying his draft with shipping documents, which are to be given up to the drawee in London on his acceptance. Duplicate documents are forwarded to the correspondent of the London banker in New York, so that the goods may be taken charge of on arrival of the ship here. The drafts on London are accepted at say ninety days' sight and charged to the American importer in that way. Upon arrival of the goods here the importer applies to the banker's agent or representative, and if the importer is of good standing he usually receives the documents in exchange for an engagement to hold the goods (with liberty to sell) or the proceeds in trust for the bankers until the acceptance in London is covered.

In this way an importer from South America would receive his goods about the time the shipper's drafts would reach London, and he would thus have about ninety days credit, say sufficient time to sell the goods, and out of the proceeds to protect the drafts drawn. To cover thé London banker he would, of course, buy a draft on London at whatever the rate on London would happen to be.

A settlement in a case like the foregoing could not be effected advantageously by direct exchange with Argentina under existing conditions, and such exchange with any South American country is scarcely known. I am advised by a New York house, which has been doing business with South America for twenty-seven years, that nearly all their transactions were carried on through credits on London. The reason is obvious. No matter how good my customer is in South America it is not possible to negotiate a draft on him at any reasonable rate of exchange. Our people have no means of ascertaining his standing and credit, and hence a draft on him must go a begging in the United States.

It is easily seen that American bankers, excepting the few houses doing an exchange business, have no agency to speak of in these transactions and enjoy none of the benefits of them excepting so far as they may be the agents of British bankers and operating in their interests.

Now, gentlemen, can you conceive of a situation more humiliating than this to a patriotic American? Seventy millions of the most enter. prising people on earth, the greatest republic on which the sun shines, the richest nation in material resources and productive capacity obliged to obtain a letter of credit from a European bank before it can buy a bill of goods from a neighboring country on our own continent; compelled to conduct a rivalry in international commerce with European nations for South American trade with the fiscal agencies employed in effecting exchange practically in the hands of our most formidable competitor.

AMERICAN GOODS IN BRITISH BOTTOMS. Not only that, but for the carriage of our goods, our mails, and our. selves to South America we are dependent upon steamers built and owned in England and operated under British management. Every American cheek should tingle with shame at the thought of the recourse to which a commission of manufacturers from the United States was subjected this year. C. D. Mitchell, of Chattanooga, Tenn., one of the vice-presidents at large of the National Association of Manufacturers, expressed the situation in this indignant phrase. He said:

It was a national disgrace when sending a business commission to Argentina and Brazil this year to acquaint us with trade prospects that they were compelled to cross the Atlantic twice each way in foreign-owned and foreign-made steamers. In a three months' absence they only had twenty-five days to “spy out the land," whereas could they have gone direct they would have had sixty days in which to do their allotted work. Thus the disgrace is overshadowed by the injury and loss.

This must indeed be galling to those of our citizens who are so sensitive to foreign influences as to stoutly protest against the use by the United States of what they call the British system of financiering. I am sure they at least will unite with me in this effort to emancipate ourselves from this abject bondage to British credit and will rejoice with me to see this country rise redeemed and regenerated by the achievement of financial independence.

DIRECT EXCHANGE DESIRED.

Direct exchange between the countries concerned was the consummation which the delegates from all the countries represented in the International American Conference hoped to achieve. A discussion of which precedes the other in the order of development, commerce or banking, is of too academic a character to be useful. It is entirely obvious that where commerce between two or more countries has arrived at a given state of development under inferior facilities for exchange that an additional impetus to trade will come from an extension of the means of settling accounts. This is attested by all observation and experience. The greater the facilities for direct clearance on account of goods exported against goods imported the greater will be the volume of commodities exchanged.

When we consider that the countries south of us are not manufacturing countries, but produce largely raw material which it would be materially advantageous to exchange for our manufactured goods, the

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