by turning capital into channels where it would be permanently worth less for all useful purpose. The planter saw his estate impaired by the vicissitudes incidental to the rebellion. He felt that he must obtain more capital to preserve that which he had. He felt that the interest would be enormous, but that it was the only plank on which he could hope to float through his troubles. So he supplied this capital with his credit and made it in part a fixed benefit in the way of machinery or permanent improvements. The planter, it is true, has so far failed in his calculations, and he may lose the title to his estate, but part, at least, of this borrowed capital remains upon the estate, a permanent and valuable agency for increasing the productions of the estate and augmenting the industrial wealth of the country. Inasmuch as the confidence of credit is dependent on production and production dependent on capital, labor, and land, it is proper that I should refer to the well-marked character of these three elements in Cuba. The land is of wonderful richness, and all the elements of nature combine to make it productive; but there is not enough Cuban capital to keep the industries in successful operation, and labor is on the downward grade. If all foreign capital were withdrawn and foreign credit suspended, many cases of insolvency would be declared, and more or less stagnation of trade and industry would unquestionably follow. Several million dollars of American capital are invested in the industries in and about Cienfuegos, and probably as much more could be used to advantage, if it could be obtained on reasonable terms. This is shown by the fact that only about one-fourth of the estates within the jurisdiction possess modern machinery, although such machinery pays a very heavy percentage on its cost value by increasing the quality and quantity of the sugar. The estates of the jurisdiction may stand in greater need just now of capital than of labor; but the labor question is the great problem for the future. Labor is now passing from slavery to freedom, and the future results of the change are wrapped in fear and doubt. We cannot with full safety estimate the future of the negro population here by the commendable bearing of the negro population of our Southern States under the licenses of freedom. There, they ceased to cultivate the land at the command of the landlord, only to cultivate it at the command of their own necessities. Here, The nutritious fruits and herbs which grow in abundance with little or no cultivation, the fishes of the surrounding sea and inland streams, the warm climate and ample shelter of the bark and leaf of the palm tree, all combine to relieve them from such necessities. There, too, the freedmen were constrained by their very humanity to be worthy citizens of the Republic, when the novelty of the change had passed, and they realized themselves clothed with legal and political equality, their children being educated, and the pathways to honorable distinction opened before them, their own manhood recognized, and their occupation respected. They were constrained to place confidence in the future, and to be animated to industry and laudable ambition. Here, such bids fair not to be the case. Freedom to the Cuban negro, while a step in the right direction, will hold out no such incentive to personal worth and patriotism. The freedman will remain an insignificant factor in the political world; motives to subserve the public good and the good of his progeny will not be inspired by the situation; and without such motives and without the necessity of gaining his livelihood by labor he will be apt to become a very unreliable and indif ferent tiller of the soil; for opprobrious work in a burning sun is not the free choice of a black skin any more than of a white one. not so. In this connection it may not be amiss to invite attention to the fact that the population of Cuba for many years has, in the main, been decreasing. Twenty-five years ago it was put at 1,500,000; last year it was put at 1,344,469. During this period the losses the population has sustained from causes of an extra and unusual character have not been materially greater than the gains from causes of a similar character; besides, the African slave trade has added to the population, and pecuniary reward has carefully bred and raised negro slaves. If, then, with these advantages, Cuba has failed to propagate and retain her population, it may be reasonably apprehended that, unless some radical remedy be provided, her population will rapidly fall off in the near future, when her negro population will be free to emigrate to other countries. These observations do not appear to me to be beyond the limit of your inquiry, for, a loss of production, caused either by inefficiency of laborers or the loss of population, must necessarily occasion a loss of credit. WM. P. PIERCE, UNITED STATES CONSULATE, Cienfuegos, August 10, 1883. Consul. PORTO RICO. REPORT BY CONSUL CONROY, OF SAN JUAN. 1. Credit stimulates trade in countries where the rate of interest is high. 2. In this island people are not averse to contracting debts. 3. The only law regarding credit is that of refraction accounts for sugar plantations. 4. At least 75 per cent. of the business in this province is on credit. 5. It is difficult to precise the percentage of losses, but with the imperfect laws of the country it may be estimated at least 5 per cent. 6. As a general rule, tradesmen do not extend credit to mechanics; it would be a sure loss here. 7. Cash buyers always purchase at least 5 per cent. cheaper than credit. 8. Interest is seldom collected. 9. Mostly with agriculturists. 10. All the produce of the island, viz, sugar, molasses, rum, coffee, tobacco, and cattle, is sold for cash. 11. Credit on mortgages is prevalent mostly amongst real-estate owners. 12. There are no obstacles placed on parties bankrupt, provided they have behaved honestly. 13. Failures are not frequent. 14. To a limited extent. 15. Small fortunes are readily made and kept; but, as a general rule, there is a change in fortunes of families every ten years, the fortunes in most instances being squandered away by those who do not work and earn them. 16. The effects of credit are detrimental, particularly amongst the agriculturists, since the laws for the enforcement of collections are most deficient. I have the honor to acknowledge receipt of circular, dated Washington, May 15, 1883, having reference to representations by the Board of Trade of Scranton, Pa., as to the value, to the financial and industrial interests of the United States of America, of reports on the systems of credit which prevail abroad. In accordance with your request, I beg to transcribe, in order, and respond to the interrogatories appended. 1. Does credit stimulate trade? I think it would be next to impossible to carry on business in this colony without credit. 2. Are people averse to contracting debts? As a general rule, I should say not. 3. Are there any sumptuary laws or regulations concerning credits! There are no sumptuary laws or regulations concerning credits. It is the custom here with all importers to sell at four months, less 2 per cent. for cash, and with second-hand dealers, to supply planters and shopkeepers on the principle of account-current, to be closed yearly at end of crops. 4. To what extent does credit prevail in proportion to the volume of business? The proportion of credit to the volume of business may be placed at 75 per cent. By far the greater part of the supplies from France are on the credit system. 5. To what extent do losses incidental to business prevail? According to information received from the vice-president of the chamber of commerce, the losses incidental to business amount to 10 or 15 per cent. 6. Do tradesmen extend credit to mechanics and laborers readily? Mechanics may be divided into two classes, proprietors of real estate and those who possess none. Laborers are entirely irresponsible. To the former, therefore, credit is extended with discrimination; to the latter, never. 7. What advantages have cash buyers? Cash buyers from importers, who sell at four months, would have the advantage of 2 per cent. discount; those whose accounts would run for the year by purchasing for cash would have the benefit of about 10 per cent. discount. 8. Is interest demanded on time accounts? Interest is not demanded on time accounts. 9. With what classes are the evils of credit most conspicuous? Amongst the planters. 10. What kind of produce or manufactured articles command cash returns? All the produce of the colony, consisting of sugar, molasses, rum, coffee, cocoa, and annatto, are sold for cash on delivery. 11. Are credits of record (mortgages, judgments, &c.) prevalent; and, if so, among what classes? The greater part of the plantations are mortgaged to the Crédit Foncier on a term of thirty years at 10 per cent. on the money loaned. The interest being paid punctually and promptly yearly, at the expiration of the thirty years the original loan is considered as liquidated, the mortgage extinguished, and the Crédit Foncier bound to give the borrower a clean title. If, however, during the period of thirty years, any yearly payment is not effected, the Crédit Foncier may sell the property for the satisfaction of its claim. If the amount of sale is superior to the claim, the balance is paid over to the mortgager. If, on the contrary, the amount of the sale is inferior to the claim, the local government must supply the deficiency; that is, the government assumes yearly the responsibility of 250,000 francs to cover the possible loss of the Crédit Foncier. The bank also advances money on the crops, and has a right prior to that of the Crédit Foncier. 12. When a person in business has once failed, or has been discredited, can he resume, and what are the obstacles to such resumption? A person having failed may resume business, and be thus licensed, on condition of giving clear proof of having settled integrally with all his creditors. A receipt in full of all demands, given by the creditors, is not always and by itself sufficient to prove such liquidation. 13. Is bankruptcy frequent? Bankruptcy is not frequent. 14. To what extent do relief acts in bankruptcy prevail? There is no relief whatever. 15. Are fortunes readily made and lost? Fortunes here are slowly amassed by continuous and energetic toil, and the absence of all new and riskful enterprises secures the possessors of wealth against frequent or important loss. 16. What are the general effects of credit? The general effects of credit are disadvantageous and unfavorable, as it keeps the price of daily commodities to a very high figure, and procures failure for many who are tempted to magnify its advantages. The credit system, however, is rendered necessary in this colony by the following fact: As soon as a planter or merchant has amassed a fortune, he removes to France to enjoy it, leaving the successor to his business without money, and under the obligation to pursue it on the credit system. This fact appears to me sufficient to account for the scarcity of specie in circulation, and for the perpetuation of the disadvantages of credit. UNITED STATES CONSULATE, CHARLES BARTLETT. Consul. Guadeloupe, July 28, 1883. HAYTI. REPORT BY CONSUL GOUTIER, OF CAPE HAYTIEN. 1. Does credit stimulate trade? 2. Are people averse to contracting debts? 3. Are there any sumptuary laws or regulations concerning credits! Credit is the sine qua non to the existence of trade. It not only stim ulates trade, but without it the majority of our merchants and retailers would be obliged to discontinue business. In fact, the system of credit is so deeply rooted in this community that merchants sell to retailers principally on credit, and these in turn sell to most of their customers on similar terms, and this credit system is restricted by neither law nor regulations. It may be safely said that 75 per cent. of the total amount of merchandise disposed of is done on credit, and this large personal account, seldom, if ever, balanced by cash, remains on the debit side of the ledger, like a standing army, misleading the uninitiated to believe the business is flourishing, while the merchant knows that 25 per cent. of that large outstanding will never be collected. 4. To what extent does credit prevail in proportion to the volume of business? Seeing the abuse of this credit system merchants have endeavored to restrict it, but without success. They must, in the first place, greatly reduce their importations, then establish retail shops, because they cannot sell by wholesale for cash. 5. To what extent do losses incidental to business prevail? When the merchant buys produce to remit to his American or European creditor he must pay cash, and in many instances he is obliged to advance money to insure the delivery of the produce. Drafts are sometimes sold on one or two months' credit, but interest is added. 6. Do tradesmen extend credit to mechanics and laborers readily? Tradesmen extend credit to mechanics and laborers when these are known to be honest, and will wait until the end of the week for payment. 7. What advantage have cash buyers? Persons buying for cash can obtain a discount of from 5 to 10 per cent. As all customs are paid cash, sometimes the importers need money, and to obtain it will sell certain current articles at cost price. 8. Is interest demanded on time accounts? No interest is demanded on time accounts. 9. With what classes are the evils of credit most conspicuous? Merchants and retailers are the principal sufferers by the credit system, but more especially the merchants. 10. What kind of produce or manufactured articles command cash returns? All the staple commodities command cash returns. 11. Are credits of record (mortgages, judgments, &c.) prevalent; and, if so, among what classes? Mortgage on property is very seldom given as security for merchandise received. 12. When a person in business has once failed or has been discredited, can he resume, and what are the obstacles to such resumption? The laws concerning failure in business are based upon the French code. When a merchant fails his case goes before the commercial court. |