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EXPORTING TO 
LATIN AMERICA 



-EXPORtiNG TO 
LATIN AMERICA 

A HANDBOOK FOR 

MERCHANTS, MANUFACTURERS 

AND EXPORTERS 



BY 

ERNST B. FILSINGER 

CONSUL OF COSTA rIcA AND ECUADOR. 

FORMERLY PRESIDENT AND COMMISSIONER TO 

LATIN AMERICA OF THF LATIN AMERICAN 

FOREIGN TRADE ASSOCIATION. 



op^ 



WITH A FOREWORD BY 
DR. LEO S. ROWE 

PBOFES80B OP ECONOMICS, UNIVEB8ITT OF PENNBTLVAKIA 




D. APPLETON AND COMPANY 

NEW YORK LONDON 

1919 






Copyright, 1916, by 
D. APPLETON AND COMPANY 



Printed in the United States of Americft 



TO 

MY WIFB 

SABA TEASDALE FILSINGER 



469221 



FOREWORD 

It is a curious fact that American merchants and manu- 
facturers have been less eager than their European rivals to accept 
advice and suggestion with reference to the development of foreign 
trade; in fact, for many years such advice was resented as a re- 
flection on the native capacity of the American business man. It 
is only within recent years that we find developing a real and 
sincere desire to ascertain the business principles which will 
enable the American exporter to meet the competition of his 
European rival. 

The clear and systematic presentation of the conditions neces- 
sary to the development of foreign trade made by Mr. Filsinger 
means a real national service, a service which will be appreciated 
by our merchants and manufacturers. The author's conclusions 
are based on personal study and observation, and although he does 
not claim to say the last word on the subject, his advice and sug- 
gestions will be of great value. His presentation shows that suc- 
cessful competition for Latin American trade is not merely a ques- 
tion of prices but involves a great number of other considerations — 
questions of credit, adaptation to local taste, willingness to con- 
form to local commercial methods. With information concerning 
the requisites of Latin American trade thus made accessible in 
clear and compact form, American merchants and manufacturers 
can no longer complain if they fail because of ignorance of the 
conditions upon which the expansion of that trade depends. 

University of Pennsylvania, 
June 20, 1916. 

IL. S. RowB. 



PEEFACE 

For a long time the author has felt the need of a book which 
would deal adequately with the subject of exporting to Latin 
America and provide for the business man a complete and concise 
analysis of Latin American trade and a guide to the best means of 
obtaining it. 

The literature attempting to deal with this question has been 
of a haphazard character, full of generalities and lacking in the 
succinct treatment so necessary to a thorough understanding of 
Latin American trade problems. 

The contents of this book will be easily grasped, even by the 
hastiest reader, because of the titles to paragraphs based on the 
principle of the newspaper headline. 

This volume is written from the business man's standpoint and 
everything that smacked of the purely academic has been avoided, 
in order that the book may be thoroughly practical. It should 
prove of particular value to commercial travelers, students of ex- 
port problems, government officials, officers of export associations 
and many other groups interested in export trade besides mer- 
chants and manufacturers. 

In the Appendix are included lists of books useful in the study 
of Latin American trade from the general and technical stand- 
points. The lists of technical dictionaries, aids to correspondence, 
grammars, readers, etc., should be of interest to the student of 
Spanish and Portuguese. Statistics and other data have been 
presented in the most succinct and logical fashion to aid the busi- 
ness man in studying Latin American trade possibilities. 

The European War forced a complete readjustment of the 
commercial relations of the Latin American republics and as a 

U 



PKEFACE 

direct consequence vast opportunities were opened to American 
business men. The extent to which these are taken advantage of 
will determine the future of North American commerce with Latin 
America. That this volume will serve to further American inter- 
est in the southern trade fields is the hope of the author. 

The Author desires to express his thanks to many trade organ- 
izations, magazines, and individuals for the information furnished 
during the preparation of this volume. He is especially grateful 
to the staffs of the Pan-American Union and the Bureau of For- 
eign and Domestic Commerce for invaluable aid. Their publica- 
tions have been freely consulted and many of the books and pam- 
phlets listed in the Appendix have likewise been drawn upon for 
facts. The author regrets that because of the wide range of the 
book an individual acknowledgment in every case is impossible. 

Ernst B. Filsingee 
St. Louis, Missouki 



CONTENTS 



PAoa 



I. Analysis of Commerce with Latin America. Busi- 
ness Conditions and Trade Opportunities. Out- 
look FOR THE Future 1 

II. How TO Study the Latin American Trade 

Problem 14 

m. Methods of Building Business with Latin 

America. Cooperation by Merchants ... 33 
rV. European and American Methods Contrasted . 44 
V. Export Commission Houses and Export Agents. 

Their Functions 67 

VT. Traveling Salesmen. General and Local Agents 81, 
Vll. Planning a Sales Trip. Conditions of Travel in 

Latin America 114 

Vm. The Merchants of Latin America. Their Busi- 
ness Customs and Methods. The Stores and 
Shops 124 

IX. Correspondence with Latin American Merchants. 

" Records and Filing 137 

X. Handling of Orders. Packing and Marking. 

Marine Insurance 151 

XL Invoices, Consular Invoices, Shipping Documents, 
Freight Forwarding, Ocean Freight Rates, 
Marine Insurance, Banking Documents . . . 172 

XII. Credits in Latin America. Terms, Financing, Col- 
lecting Past Due Accounts 201 

Xni. Banking Situation. Financial Conditions in 

Latin America. Sterling and Dollar Exchange 213 

XTV. Tariffs, Custom House Regulations, and Taxes in 

Latin America 228 

zi 



CHAPTBB 

XV. 



XVI. 
XVII. 

xvrii. 

XIX. 

XX. 

XXI. 

XXII. 

XXIII. 

XXIV. 

XXV. 

XXVI. 

xxvri. 

XXVIII. 




CONTENTS 

PAOB 

Catalogs, Price Lists, Quotations, Discounts. 
Standards of Measure and Value .... 239 

Latin American Trade Lists and Directories . . 254 
Advertising in Latin American Newspapers and 
Magazines 260 

The Parcel Post and Mail Order Business with 
Latin America 277 

Trade-marks, Laws and Kegulations in Latin 
America 287 

Helpful Factors in the Development of Latin 
American Business 297 

The Pan-American Canal. Its Effect on Latin 
American Trade. The Pan-American Kailway 306 

Railroad and Steamship Facilities; The Effect of 

Steamship Bates on Latin American Commerce 310 

Governmental Assistance to American Exporters 314 

American Consuls. Their Service to Exporters 324 

Organized Efforts for Pan-American Commercial 
Relations. The Pan-American Bureau. Con- 
ferences, Conventions 334 

How Business Organizations May Aid Manufac- 
turers IN Latin American Trade Extension . . 347 

The Opportunities for Young Men in Latin 
America. Commercial Education for Foreign 
Trade 362 

Products and Manufactures Salable in Latin 

America 368 

Appendix 389 

Some Features of the Latin American Climates 389 

The Seasons in Latin America . . . . . 389 
A Detailed Description of the Latin American 

Republics from the Commercial Standpoint . 392 

Aids to Study of Export Problems .... 464 

Cable Codes 465 

Aids to Correspondence • . . . . 466 

Atlases and Gazetteers 472 

Books ajid Publications concerning Latin Amer- 
ica, Its Commerce and Opportunities . . . 473 
Typical Advertising Rates in Export Journals . 497 



CONTENTS xiii 

PAGE 

List of the Principal Directories of the Latin 

American Eepublics 498 

Banks, Banking Houses and Foreign Exchange 

Brokers in New York City 504 

Principal Banks of the Large Latin American 

Cities 506 

Latin American Monetary Units with Approxi- 
mate Values in United States Gold Dollar . 510 
Distances to Principal Latin American Cities in 

Nautical Miles 510 

Cable Kates to Latin America 510 

Embassies and Legations from the United States 

to the Latin American Eepublics .... 512 
Embassies and Legations from the Latin Ameri- 
can Eepublics to the United States . . . 513 
Presidents of the Latin American Eepublics and 

Terms of Office 614 

Foreign Freight Forwarders in New York . . 515 
Steamship Lines to Latin American Eepublics . 516 
Eequirements for Consular Documents Exacted 

by Latin American Eepublics 520 

List of American Consulates in Latin America . 522 

The Use of Eeply Coupons 524 

Money Order Fees for Latin America . . . 524 
Latin American Countries to which the Parcel 

Post Extends 525 

Table of Mail Time from New York to Latin 

American Cities 526 

Weights and Measures Used jin Latin America 527 
Distribution by Countries of Capital of Citizens 
of the United States Invested in Latin America 528 

Commerce with Latin America 529 

Comparative Table of South American Exports 529 ■ 
Clubs and Societies for Better Pan-American Ee- 

lations 531 

Typical Tours of Latin America 533 

Taxes Charged Commercial Travelers in Latin 

America 534 

Population of the Latin American Countries Ac- 
cording to Classes 540 

Pan-American Affairs in Colleges and Universi- 
ties « • * « 545 



xiv CONTENTS 



Branch Offices of the Bureau of Foreign and Do- 
mestic Commerce 547 

Cooperative District Offices 648 

Index . . . . . . .. . . .. .... 649 



EXPORTING TO 
LATIN AMERICA 



EXPORTING TO LATIN 
AMERICA 



CHAPTER I 

ANALYSIS OF COMMERCE WITH LATIN AMERICA. BUSINESS 
CONDITIONS AND TRADE OPPORTUNITIES. OUTLOOK FOR 
THE FUTURE 

Introduction. — Within the last decade there has developed an"^] 
extraordinary interest in Latin American trade. Until very 
recently the export business of the United States was subordinated 
to the domestic commerce incidental to the exploitation of the 
resources of this country, but a marked change has occurred. 
Students of American political economy have frequently pointed 
out the necessity of trade development with foreign countries so 
that there may be in existence, when needed, markets to absorb 
the surplus manufactures, in order to maintain a credit balance 
of trade for the welfare of the nation. However, the chief reason 
for the unusual interest in the Southern trade fields must be j 
sought elsewhere. 

The Agitation for Foreign Trade. — For years there has been con- 
stant agitation by newspapers, export journals, individuals, and 
organizations interested in fostering the growth of North Ameri- 
can commerce with Latin America primarily from the standpoint 
of gain, and they have cited the innumerable advantages that 
would redound to the benefit of the United States by controlling 
the vast commerce of the Latin American republics. The suc- 
cess achieved by a number of far-seeing American corporations 
and export houses, which have established a large business in Latin 
America because of their persistent, intelligent, individual efforts, 
was often referred to. The construction of the Panama Canal 

1 



2 ••]^xtd'E%'M'T6''tATlN AMEEICA 

also served to stimulate interest, but a climax was reached when 
the European War profoundly affected commercial conditions in 
the Latin American states. 

The Influence of the European War. — The business relations 
which had existed for a long period between the importers of 
the Latin American republics and their European connections 
were interrupted, and as far as Germany and certain portions 
of Belgium were concerned, ceased entirely. The markets for 
the products of Latin America in European countries were ad- 
versely affected; banking arrangements in many instances were 
rudely terminated, and for a considerable period chaos reigned, 
in the business world of Latin America. This condition of affairs 
served to focus the attention of the United States on the great 
possibilities of the Southern trade fields, and although economic 
conditions did not justify the expectation of immediate profits, 
the opportunities, when conditions should again become normal, 
were quickly foreseen. 

What Latin America Embraces. — ^^Latin America includes the 
twenty republics of Mexico, Cuba, Santo Domingo, Haiti, Guate- 
mala, Honduras, Salvador, Nicaragua, Costa Rica, Panama, 
Colombia, Ecuador, Peru, Bolivia, Chile, Argentina, Paraguay, 
Uruguay, Brazil and Venezuela. The term "Latin America" does 
not include Porto Rico, a territory of the United States, nor 
the Guianas (French, English and Dutch possessions), nor British 
Honduras. 

Area of Latin America. — The area of the countries which are 
included in Latin America is approximately 8,700,000 square 
miles. This is two and one-third times that of the United States, 
not including Alaska and the Insular possessions. The population, 
according to the latest reports, is 50,000,000. Of the twenty 
republics, one of them alone, Brazil, has an area of 3,500,000 
square miles, being equal to the area of the continental United 
States, excluding Alaska, with the area of twenty-five states the 
size of Delaware added to this. • 

Physical Characteristics. — If the student of Latin America will 
examine a geographical globe he will be struck by the fact that 
South America might with great propriety be called Southeast 
America. The easterly range of the Western Continent is so 
great that more than three-quarters of the western coast of South 



ANALYSIS OF COMMERCE WITH LATIN AMERICA 3 

America lies to the east of New York City. South America and 
Africa are in closer proximity than New Orleans and the northern 
coast of South America. These facts have an important bearing 
on commerce. A further index to trade possibilities of Latin 
American countries is found in their physical characteristics. 
From Mexico to Chile, the countries are traversed by mountain 
ranges. In South America these are the Andes, some of whose 
peaks reach an altitude of over 20,000 feet. There are great 
plateau regions lying at varying altitudes from 5,000 to 10,000 
feet. The great rivers, such as the Amazon, Orinoco, and Magda- 
lena, with their confluents, provide commercial highways from 
the ocean to important centers of trade inland, often inaccessible 
to railroads. There are numerous fertile valleys, arid deserts, 
low sandy coastal regions, and regions of eternal snow. On the 
western coast of South America the Antarctic current exerts an 
important influence on the climate, cooling the air within 100 
or 200 miles of the equator. In the chapter devoted to a considera- 
tion of the individual countries, the physical characteristics peculiar 
to each will be elaborated. 

Great Variety of Climate. — Within the vast Latin American ter- 
ritory there are climates far more varied than, yet not so variable 
as, in the United States. The various regions may be divided into 
four zones: (1) the tierras calientes or the hot lowlands; (2) 
the tiemsJUm^]ji^ or temperate regions of the plateaus and 
valleys of the uplands with almost continuous spring; (3) the 
tierras frias, or colder regions, such as the fertile plateau of 
Quito in Ecuador at an elevation of 9,300 feet; (4) the tierras 
nevadas or regions of perpetual snow. The climate, even in the 
countries immediately at the equator, in general is healthful, as 
the sea winds temper the heat. The rainfall varies greatly, but 
in the tropical lowland regions is very heavy. The southern 
portions of Argentina and Chile possess a climate which is identical 
with that of the northern latitudes of the United States, the most 
severe cold being felt during the months which constitute the 
North American summer. The effect of altitude on climate is of. 
extraordinary importance and must always be considered by the) 
student of Latin American trade opportunities. The failure to 
realize that many important cities of the Southern countries are 
located on plateau? or among mountain^ accounts for the noi4"» 



4 EXPORTING TO LATIN AMERICA 

success of many American firms in the Latin American trade 
fields. 

. Resources of Latin America. — Because of the physical configura- 
tion and the wide range of climates, the resources of. Latin 
America are phenomenal. The chief source of wealth is agri- 
culture and the products of the tropical, semitropical and tem- 

,' perate zones are all found in great abundance. Sugar, tobacco, 
coffee, cacao, rubber, fruits, fibers and medicinal plants are the 
principal tropical products. Of the products of the temperate 
regions, corn, cereals (mainly wheat), and all sorts of fruits and 
vegetables common to the same climate of the United States are 

[grown. The great expanses and grassy plains provide food for 
herds of live stock, with a consequent great wealth ^n hides, meat, 
bones, and other animal products. The forests of Latin America, 
in most places, are as undeveloped as at the time of the discovery 

jpf America. Their riches of rubber, dye woods, hardwoods aiid 
every variety of timber suitable for construction, will be an im- 
portant contribution to the wealth of Latin America in the years 

__to come. The mineral deposits are inconceivably great. Almost 
every kind of metal is mined, gold, silver and copper predominat- 
ing, although vast deposits of coal are being steadily uncovered; 
and their importance in the future development of industrial 
Latin America cannot be overestimated. The nitrates, alone, of 
"T^Thile form the chief basis of the wealth of that republic, -v^hile 
the diamond mines of Brazil and the emerald mines of Colombia 
may also be cited. Sources of enormous latent power that only 
need development are found in the great waterfalls and the 
rapidly fiowing rivers. The outlook for the future commercial 
j development seems boulidless. 

""^ Mines and Minerals. — One of the chief sources of Latin Amer- 
ican wealth is mining, this having been the first activity engaged in 
by the Spaniards who discovered South America. Since they 
began their workings, great quantities of metal have been taken 
from the mines of Peru, Bolivia, Chile, Colombia, Mexico, and other 
countries. Vast as was this output, the deposits have scarcely 
been touched, and untold millions still await modern methods 
and machinery. It requires but little imagination to realize what 
effect the development of this great industry will have on the 
imports of the United States, i The operations incidental to the 



Al^ALYSlS OF COMMERCE WITH LATIN AMERICA H 

development of the mines offer opportunities for the sale of 
American manufactures in the shape of machinery and tools, and, 
above all, for the employment of skilled and trained Americans. 
( Railroad and construction work in general also will necessitate 
the importation of American manufactures of all sorts. 

Importance of Agriculture. — The interest of the American man- 
ufacturer and exporter in the agriculture of Latin America is 
easily understood. In many agricultural districts the implements 
used are still of the most primitive character. With the increase 
of wealth and wider use of educational facilities will come an 
f increased demand for machinery, implements, and tools of evejjj 
sort suitable for the cultivation of agricultural products. It is 
almost impossible to appreciate the enormous wealth which will 
follow the use of modern intensive methods and highly specialized 
implements by the people of regions so favored by^ature. There 
are farming regions where the breaking of the ground with a 
plow is but rarely seen, and where the natives have been unable, 
because of their poverty, to take advantage of modern methods. 
. However, rapid progress, when one considers the conservative 
/ nature of the inhabitants, has been made during the last two 
J decades in introducing newer methods, tools, and implements. 
tThe only limit to the development of trade in this direction is the 
(individual effort of the American manufacturer to demonstrate 
(the utility and value of machinery and implements. 

Opportunities in Forestry. — Vast acres of land, suitable for agri- 
culture, still remain on which the clearing must be done. Until 
now this has been accomplished by old-fashioned methods of the 
most primitive sort. In the future this will be done by modern 

{methods, and in the meantime there is great need for machinery, 
tools and implements used in the timber and lumber business. _^ 
General Conditions in Latin America. — The Latin American 
republics offer many startling contrasts. The advances that have 
been made in all branches of endeavor have been notable, but it 
may be stated without exaggeration that they are insignificant 
in comparison to the development that will take place during 
the next fifty years. Although there are many great capitals 
with enormous wealth and a high degree of culture and civiliza- 
tion comparable to that of the best of Europe or America, there 
are, on the other hand, regions where conditions are still of the 



Ll 



6 EXPOHTIIS^G TO LATIN AMERICA 

most primitive. In considering the possibilities of United States 
trade expansion with Latin America, it is necessary to reckon 
with several factors. The most important are: increase of 
population, increase of wealth, and influence of capital invest- 
ment. The increase of wealth has been little short of marvelous. 
The increase of population, however, has not kept apace. The 
investment of foreign capital has unquestionably been followed 
by an enormous growth in the business of those nations that 
made these investments. (A discussion of these factors will follow 
later. Perhaps the most important item in considering the future 
of Latin America is the increase of wealth. The student will be 
struck by the very large percentage of the peasant or peon class. 
This portion of the population possesses an extremely limited 
purchasing power, because of its poverty. In the most advanced 
of the Latin American republics, educational facilities are being 
supplied at an extremely rapid rate, and it is easy to foresee that 
this policy will result in the establishment of new standards of 
living. As a direct result of education will come increased wages, 
followed by greater purchasing power. In this connection it is 
interesting to contrast a few examples. In Costa Rica the imports 
per capita in 1914 were $21.13. Costa Rica is one of the most 
advanced of the Central American countries, with a very high 
degree of development and percentage of literacy. On the other 
hand, the Republic of Guatemala with a population of 2,120,000, 
had a per capita trade of only $4.75. Although the population 
is much larger than that of Costa Rica, its peasant population 
with extremely limited buying power is so large that the business 
per capita is much reduced. 

Capital Investment Increases Business,. — In analyzing the busi- 
ness of the Latin American republics with foreign countries, one 
is quickly impressed with the fact that trade follows capital 
investment. The countries whose capitalists have made the heaviest 
investments in Latin America enjoy a trade in relative proportion 
to such investments. According to the most competent authorities 
a conservative estimate of the amount of capital of citizens of 
the United States invested in Latin America is in the neighborhood 
of $1,725,450,000. Of this great sum $750,000,000 is invested in 
Mexico, $150,000,000 in Brazil, $40,000,000 in Argentina, 
$35,000,000 in Peru, and $40,000,000 in Central America. The 



ANALYSIS OF COMMERCE WITH LATIN AMERICA 7 

rest is distributed in other republics in smaller amounts. If 
these figures are analyzed and contrasted with the investments of 
any foreign country — for instance. Great Britain — it will be seen 
that the countries in which Great Britain's investments pre- 
ponderate show larger importations from Great Britain. The 
private interests of Great Britain in Argentina represent 
$2,000,000,000, in Brazil $1,200,000,000, in Uruguay $250,- 
000,000, in Chile $320,000,000. These figures are significant inas- 
much as they demonstrate that with the growth of North American 
investments in the Latin American republics will come an increased 
demand for American manufactures, and the alert business man 
who prepares to take advantage of these opportunities will reap 
the benefit. 

Building for the Future. — The merchant or manufacturer who 
interests himself in Latin American trade does so because of 
possibilities for gain. He is not interested in an academic dis- 
cussion of economic laws. One of the fundamentals in considering 
such trade extensions is the possibilities of the Southern countries 
in the years to come. It requires but little imagination to realize 
that the vast resources of Latin America have scarcely been touched, 
and that there is practically no limit to the opportunities there. 
The development of the immense resources of Latin America will 
make that field a most promising market for the manufacturing 
nations of the world, particularly the United States. For an 
indefinite period the people of the southern republics will continue 
to import manufactured products as the countries are essentially 
agricultural and, with the exception of Argentina, Brazil and 
Chile, are nonindustrial. In the last three countries, where manu- 
facturing is already being done, it may eventually assume some 
importance because of deposits of iron ore, water power, and, in the 
case of Chile, coal. Meanwhile, these republics afford excellent 
fields for American enterprise. The wise business man who con- 
templates a Latin American business is he who builds for the 
future. He does not solely consider in his calculations the ques- 
tion of profit for one or two years, but has in mind the establish- 
ment of a business which shall maintain a healthy growth in 
proportion to the increasing buying power of Latin America. 

How to Realize the Possibilities. — Opportunities for trade exten- 
sion in Latin America have already been touched upon. The 



8 EXPOETING TO LATIN AMERICA 

possibility for realizing them depends solely on intelligent, per- 
sistent, individual effort. The great commerce of England, Ger- 
many, and France has not resulted from what the governments 
did, but is mainly the achievement of private enterprise. While 
many Latin American buyers are somewhat influenced by nation- 
ality, they are not, as a rule, affected by the origin of the product 
they import. They are swayed solely by the influences which 
determine successful merchandising in the United States. The 
necessities of the American manufacturers who wish to do business 

f with Latin America are : ( 1 ) An absolute understanding of the 
^iK requirements of the market it is proposed to enter. This is 

1 accomplished by analysis, self-education, study, and investigation; 

il (2) an intelligent, systematic, persistent effort to extend business 

#*■ with the importer, based on principles which will make for 

f permanent trade; (3) to observe the utmost accuracy, and devote 

the greatest possible attention to detail in every phase of trade 

^^j-elations. 

Much Criticism Unmerited. — In the discussion of trade oppor- 
tunities in Latin America, the custom of criticizing American flrms 
is very common, and while in the past there has been reason for 
certain criticism, the improvements have been continuous and 
marked. It is unfair to make a general condemnation of American 
export methods. Commercial practices of representative North 
Americans who deal with Latin America are in every way equal 
to those of their European competitors. Manufacturers who have 
earnestly sought to increase their trade with Latin America have 
been ready and anxious to conform to all requirements. There is 

^ -not the slightest doubt that Americans who determine to win 

Latin American trade can accomplish this as easily as have their 
European competitors or the pioneers of the United States who 
have been so successful in this field. 
^ Countries Grouped According to Business Methods. — It has been 
\ stated that analysis and investigation are indispensable to an under- 
standing of conditions that prevail in Latin America. For the 
convenience of business men, students, and those interested in the 
commerce of Latin America, a rough grouping of the countries 
may be helpful. This is an entirely arbitrary arrangement but 
will lend itself to an easier analysis of trade conditions, and will 
b§ found useful in considering the export problem. The countries 



ANALYSIS OF COMMERCE WITH LATIN AMERICA 9 

are placed in six groups/ based on general political conditions, 
organization of banking systems, and advancement along com- 
mercial lines in general. 

Group 1. Cuba, Mexico, Panama, Porto Rico. It is im- 
portant to note that Porto Rico is not a Latin American country, 
being a territory of the United States. However, the business 
conditions in Porto Rico are identical with those of Cuba and 
Mexico, and may therefore be properly considered in that con- 
nection. 

Group 2. Haiti and Santo Domingo. 

Group 3. Northern South America: Colombia, Venezuela 
and Ecuador. 

Group 4. Western South America : Chile, Peru and Bolivia. 

Group 5. Eastern South America: Argentine Republic, Bra- 
zil, Paraguay and Uruguay. 

Group 6. Central America: Costa Rica, Guatemala, Hon- 
duras, Nicaragua, Salvador. J^ 

Conditions in Group 1. — In Cuba and Panama there is, to all 
practical purposes, complete self-government and established po- 
litical order. This is also true of Mexico when the country is not 
disrupted by political strife. In these countries American cap- 
italists have made their greatest investments, including railways, 
mines, plantations, sugar mills, street railways, water power enter- 
prises, etc. The banking business is highly developed as many 
American banks have extremely close connections with the banks 
of these countries, and there are many banking institutions which 
were established by Americans, and naturally assist American 
enterprises. 

Business is done priactically as in the United States, upon open 
credit. The American manufacturer is accustomed to deal direct 
with the importer. Because of the fact that shipments are made 
on open account it not infrequently happens that many perfectly 
responsible concerns are somewhat tardy in meeting their obliga- 
tions. With them the factor of time is a very important considera- 
tion, as it is in many agricultural districts of the United States. 
Credit conditions in Cuba are on the whole very good, but, as 

* These groups are similar to those suggested by W. C. Downs in the 
Quarterly Journal of Economics. The Author has, however, made a slight 
rearrangement. 



10 EXPOETING TO LATIN AMERICA 

everywhere, all applicants for credit should be carefully investi- 
gated. In Mexico, because of the recent political disturbances, 
unusual care must be exercised. In Porto Rico there are many 
responsible firms, but because of the very rapid development of 
the business in that island, caution is advisable. In Panama 
i conditions are practically the same as in Porto Rico. 

__ Conditions in Group 2. — Within the past few years there has been 
I a notable change in the countries of Haiti and Santo Domingo. 
While these republics in the past have had very unstable political 
conditions, the establishment of what is in reality a protectorate 
of the United States over Santo Domingo has resulted in a con- 
siderable improvement. The custom of selling direct to the im- 
porters of these countries is rapidly growing, although business 
relations formerly were on basis of barter, or an exchange of 
products for the manufactures of the United States. In the 
past the importer and exporter have generally been the same 
person, but, latterly, specializing is leading to the establishment 
of a greater number of stores and shops devoted to specific lines 
of merchandise. The banking 'conditions are likewise improving, 
and the investment of American capital is proving beneficial to 
American trade. 

Conditions in Group 3. — Unlike Haiti and Santo Domingo, the 
republics of northern South America have not been so strongly 
under the American influence. The conditions in these republics, 
therefore, are somewhat dissimilar. The small number of banks 
in the republics is very noticeable and trading, therefore, takes 
the place of banking, particularly in the more remote places, where 
business is conducted on the basis of barter. In this field, the 
New York export houses play an important role, inasmuch as they 
accept the products of these countries and also extend credit when 
shipping merchandise. 

Political conditions, while improving, have not yet reached the 
high level of those which obtain in the countries represented by 
i^ Group 5. 

Conditions in Group 4. — The republics of Chile, Peru, and 
Bolivia in the western part of South America have made notice- 
able progress as a whole, and commercial conditions are greatly in 
advance of those in the countries just described. Especially is 
this true of the republic of Chile, which might properly be included 



ANALYSIS OF COMMERCE WITH LATIN AMERICA 11 

in the same category with the Argentine Republic and Brazil. 
These countries possess well organized banking systems which 
represent both foreign and local capital. All of these banks, no 
matter what nationality, French, German, or English, have 
correspondents in New York, through whom their business is 
transacted. The foreign banks have a particularly strong repre- 
sentation and the heavy investment of European capital has re- 
sulted in a preponderance of trade with European nations. Com^ 
mercial practices generally are far in advance of those in Groups! 
2 and 3. '^'^^^T^ 

Conditions in Gronp 5. — The countries making up this group, A ^ 
Argentine Republic, Brazil, Paraguay, and Uruguay, represent the 
very highest development of commercial enterprise. In these 
republics there is a very extensive international banking system 
which greatly influences business methods. Specializing is com- 
monly practiced, and the importer is very seldom an exporter. 
The merchants and manufacturers are in direct touch with the 
markets of the world, and by cable follow the fluctuations of 
commodity costs. It is in these republics that direct trade rela- 
tions, when properly managed, can be productive of greatest 
results. The political conditions in this group are about identical 
with those in Group 1. 

Conditions in Group 6. — In the republics of Central America 
business conditions are somewhat different from those in the coun- 
tries in Groups 1 and 2. In several of these republics, notably 
Costa Rica and Salvador, there is a highly developed banking 
system and excellent machinery for exchange. To a lesser degree 
is this true of Guatemala. In Nicaragua and Honduras the condi- 
tions are similar to those of Group 3. In Costa Rica business is 
carried on more as in Cuba or Mexico and specializing is highly 
developed. Its political stability is also permanent. The other 
republics which have been less stable from the political standpoint 
are not so highly developed, and business conditions are rather 
more backward. Particularly is this so on the eastern coast of 
Nicaragua and Honduras, where the importer carries on a trading 
business, buying the products of his clients in the interior, to whom 
he forwards shipments of merchandise. In the capitals of these 
republics trading is more highly specialized and business generally 
is done on open account although with the merchants 



12 EXPORTING TO LATIN AMERICA 

in some of the republics transactions are still made against ac- 
ceptances. In this field, on account of proximity, the business 
houses of New Orleans wield a greater influence than the New York 
export commercial firms. 

Another Economic Arrangement — Another outline for a division 
of South America (suggested by Wm. H. Lough) is the Amazon 
Basin comprising Northern Brazil, and the eastern part of Peru 
and Bolivia; the River Plata Basin including Southern Brazil 
and Argentine; the West Coast region beyond the Andes; and 
the North Coast comprising Colombia and Venezuela. Because 
of the peculiar characteristics of each of these trade fields, they 
should be separately considered. 

The Importance of Analysis. — In order to form an adequate idea 
of the possibilities of Latin American trade, it is indispensable to 
analyze the importations. Statistics, while generally looked upon 
as very dull and uninteresting, are in reality an important factor. 
They should be studied not only by those already engaged in the 
export business as a key to what is being done by competitors, 
but particularly by those who desire to obtain an idea of the possi- 
bilities of these countries for the sale of their products. The 
manufacturer seeking a Latin American market should not content 
himself merely with an examination of the imports of a given 
country from the United States, but should know what is being 
sold to that republic by competitive nations. He should likewise 
determine the exports per capita of a country in which he is 
interested. Not only should he analyze the statistics of his par- 
ticular manufactures but of business generally. Such an analysis 
will aid materially to obtain a better knowledge of the opportunities 
in a particular country. 

Details of the Commerce. — The details of the commerce between 
the United States and the Latin American republics will be found 
of great value in studying Latin American trade problems. Inter- 
esting tables are given on page 529 of the Appendix. 
^ The Percentage of Imports From United States. — The United 
States today supplies 38 per cent, of the imports of Latin America 
and takes ^9^ per cent, of the exports. To the remainder of 
the world the United States supplies about 14 per cent, of its 
imports and takes only 7 per cent, of the exports. The percentage 
of the growth of United States exports to Latin America was 



ANALYSIS OF COMMERCE WITH LATIN AMEEICA 13 

equaled by those of Great Britain, and the percentage of Ger- 
many's growth in that trade, until the outbreak of the European 
War, was also as great as that of the United States. 

The Relation of Proximity to Imports. — One of the striking facts 
that must be remembered in connection with the imports of Latin 
America is that the United States supplies from 30 per cent, to 
60 per cent, of the imports of the republics which are nearer to this 
country than to Europe, that is to say, Mexico, Central America, 
the West Indies and the northern countries of South America. 
Those countries which are as near to Europe as the United States 
namely, Brazil, Uruguay, Paraguay, Argentina and the West Coast, 
take from 10 per cent, to 20 per cent. 



CHAPTER II 
HOW TO STUDY THE LATIN AMERICAN TRADE PROBLEM 

Introduction. — Although an interest in the development of busi- 
ness with Latin America has been growing for some years, the 
European War stimulated manufacturers and merchants of the 
United States to extend their trade with Mexico, Central America, 
Cuba, Porto Eico, the West Indies, and South America. Interest 
in this trade is being manifested not only by houses that are for 
the first time taking up the matter of extending their activities 
to foreign fields in a systematic manner, but particularly by those 
firms who have already been actively engaged in exportiug. Of 
the latter class many houses realize that this branch of their 
business is still short of what it should be and feel that their 
present efforts are not meeting with the success that they deserve; 
but they are convinced that their sales, with proper effort, could 
be materially increased. 

Scientific Study Necessary. — The situation created by the 
European War brought business men to the realization that a suc- 
cessful export business is not to be created overnight and that in 
order to develop it, carefully evolved plans must be put into action. 
Such plans cannot be made without much serious study, not only 
of the conditions prevailing in Latin America, but of the merchant's 
own business in relation to them. If this plan had been adopted 
by merchants in the past, much of their prejudice against export 
trade could have been avoided. 

A Penurious Policy Shortsighted. — The attitude of many busi- 
ness men toward this question is difficult to understand. In- 
numerable instances may be cited of executives, otherwise broad- 
minded and liberal, who, in creating a domestic demand for their 
products, display great imagination but refuse to authorize ex- 
penditures for the investigation of the Latin American field. 
When a haphazard or slipshod attempt to do business there is 
made, the result is disastrous. 

14 



HOW TO STUDY THE TRADE PROBLEM Ifi 

Development of Domestic Business Expensive. — In order to 
develop a business in the home market, it is necessary to expend 
sums ranging from insignificant amounts to mkny thousands of, 
dollars before the business becomes profitable. On the other hand,]! 
heads of concerns, who would not have taken any decisive step^ 
involving great expense in this country without deliberate con-' 
sideration, are willing to send their representatives to the Latin 
American republics wholly unprepared and with no knowledge 
whatever of conditions. In the future the most successful houses 
will be those whose departments of Latin American trade investiga- 
tion are the best organized, and who, before any salesmen are sent, 
will thoroughly study the situation. 

Specific Information Indispensable. — The prime need of students 
of the Latin American trade field is specific facts. There is no 
other commercial topic about which there have been offered so 
many useless suggestions, glittering generalities, and valueless 
hints. 

A Knowledge of Latin America. — Naturally the first requisite to 
an understanding of the possibilities of Latin America is an 
acquaintance with the geographical conditions of the prospective 
field. No attempt to develop a trade with Latin America should 
be made without a thorough study of the physical conditions 
which prevail there, its people, trade, etc., and besides this a knowl- 
edge of the distances, the means of transportation, of the ports, the 
strategic business points, etc. These facts can easily be learned by 
a thorough study of the countries in which it is proposed to de- 
velop trade. 

Using the Encyclopedia and Gazetteer. — In every public library 
may be found the latest encyclopedias, gazetteers, etc. The pur- 
chase of a dependable atlas and the study of a good commercial 
geography may be strongly recommended in addition to reading 
books of travel; works relating to the individual countries will 
also be found very helpful. On pages 472-473 of the Appendix 
will be found lists of leading books of this character. 

The statistics and other information concerning the individual 
countries, as they are published yearly in the ^^Statesman's Year 
Book" will also prove valuable and make for the scientific efficiency 
so necessary to a thorough mastery of foreign trade problems. 
Other volumes which may be recommended are the "South Amer- 



16 EXPOETING TO LATIN AMEEICA 

ican Year Book/^ the "Argentine Year Book/^ the "Brazilian 
Year Book/' etc. The statistics are adequate and much additional 
information is available in these publications, which are usually 
found in public libraries. 

The Factor of Adaptability to Latin Americaii Demand. — In con- 
sidering the possibility of an export business and in order to 
determine what should be studied, the business man should put to 
himself the following questions: 

1. Which items among our products can be exported to Latin 
America ? 

2. Can they be marketed in all the Latin American countries or 
only in certain ones? 

3. Are they adapted to the needs and requirements of all sec- 
tions of a country, or only to a certain limited field therein? 

4. Can they be sold just as they are now made, or are certain 
changes necessary in shape, size and appearance? If changes are 
essential, can we make them? 

5. Are the labels, finish, color and other details the most 
appropriate for the market? 

6. To what classes of the population can they be sold? 

7. If no demand already exists, can one be created? In that, 
case what is the best method to pursue? 

8. Will our product compete successfully with foreign products 
of a similar character? 

9. How do the tariffs in the Latin American republics affect the 
sale of our product? Has the European manufacturer any ad- 
vantage in this respect? If so, how can it be overcome, and what 
means must be taken to meet any peculiar tariff restrictions? 

10. Does the matter of freight or transportation charges affect 
the possibilities of sales? 

11. Are there any local conditions which would make it im- 
possible to place our product in certain countries or districts? In 
that case, what are these? 

12. What is the most desirable field in which to make a 
start ? 

In considering the foregoing questions, the manufacturer will 
have a foundation on which to base his study of the export situa- 
tion, and of the adaptability of his goods to the foreign markets. 

Other Factors to be Considered. — The ability of a merchant to 



HOW TO STUDY THE TKADE PROBLEM It 

create an export business is dependent upon important factors other 
than a careful study of the problems suggested in the preceding 
paragraphs. These factors are of equal importance and should 
have careful thought. The earnest business man who believes 
himself in a position to export to Latin America must determine 
where to make a start. Latin America is such a vast field and the 
difficulties of properly effecting sales to all parts of it are so great 
that it is highly desirable, in making a beginning, to enter a 
field which offers the least amount of difficulty. How then can 
this be determined? Only careful study and a consideration of 
all details will enable the beginner with no expert knowledge to 
decide where his efforts will be productive of results in the shortest 
possible time. Certain conditions affect this just as they do domestic 
trade and may be outlined roughly as follows: 

1. Proximity of the territory. ^ 

2. Size of the field.^ 

3. Desirability of the trade. ^ 

4. Methods of doing business. ^ 

5. Terms to be extended. ^ 

6. Competition to be met.'^ 

7. Immediate prospects and future possibilities.^ 

8. Capital of the exporter.'' 

9. Organization. *" 

10. Sales methods.^ 

11. Attention to documents and details.^ 

The Advantage of Proximity. — The question of distance is 
always an important factor, for a country with which correspond- 
ence can be conducted with the minimum expenditure and time 
offers, naturally, certain advantages. Proximity, however, should 
not decide this question, for the reason that some of the most 
attractive trade fields are located at a distance. The beginner, 
however, would have certain advantages in making a start in the 
republics of Mexico or Cuba, provided that after investigation and 
study either of these fields seems to offer possibilities as attractive 
as those of Uruguay or Chile. 

The Size of the Field. — The geographical size of a country should 
not influence a prospective exporter as to its possibilities. Many 
products, because of their nature, would have a much larger sale 
in a smaller than a larger country. 



18 EXPORTING TO LATIIsr AMERICA 

Desirability in Relation to Cost — The desirability of a market 
is dependent upon two factors: (1) the largest possible volume of 
business at minimum expense; and (2) the rapidity with which 
the business may be secured. 

These can be determined only by a careful analysis of the 

general business being transacted, its relation to the population, 

the volume of exports of similar or the same articles, the general 

^ prosperity of the people — in fact, by the same rules as those 

/!. governing domestic trade. 

r Methods of Doing Business. — The business man must determine 
the most advantageous methods of making sales in Latin America. 
This naturally includes a consideration of direct sales or agency 
arrangements in relation to payments. Under certain conditions 
it may prove more desirable to deal with a general importer who 
undertakes distribution and is responsible to the manufacturer 

/ for all shipments, than to sell on credit to individual small buyers. 
Export commission houses where maximum sales and efficient 
representation can be assured may likewise prove the logical 
means for certain fields. Exportation direct to individual mer- 
chants may, in other countries, offer the greatest opportunities. 

Terms to be Extended. — An important factor in export business 
is the subject of terms. To the beginner it would be preferable 
to sell his merchandise direct to responsible merchants on terms 
averaging sixty days (which could be done in Cuba or Mexico), 
in preference to marketing them even through an agency in the 

I Republic of Colombia on terms of four to six months. In this case, 

^ again, proximity is an important factor, for on account of the 
shorter distance to Cuba and Mexico less tinie is expected by the 
dealer. Generally speaking, Latin American merchants desire time 
for making payments, and this is not due wholly to lack of capital, 
but because of the various methods of doing business. 

Character of Possible Competition. — The question of competi- 
tion, both American and foreign, is one that invariably presents 
itself to the thoughtful business man who wishes to extend his 
trade. It is only when he is acquainted with these conditions that 
he can properly prepare his samples, establish his prices, and 
definitely fix his terms. There are fields in Latin America in 
which the shipper of certain products would find competition less 
k^en than in others. In a country which is developing rapidly as 



HOW TO STUDY THE TRADE PROBLEM 19 

is Latin America a virgin territory may be the one to approach. 
On the other hand, it will be frequently found that because of the 
educational work that has been done in older fields by those who 
have already introduced certain articles, sales can be made much 
more easily. The fact, therefore, that merchants of his own 
country as well as representatives of European houses are in 
active competition, should not deter an American merchant from 
attempting to gain a foothold in a warmly contested field. 

Eventual Profits Outweig^h Immediate Success. — The farseeing 
business man, accustomed to look upon expenditures in the develop- 
ment of his business not as a dead expense but as an investment, 
will take into serious account not only the immediate prospects in 
a given territory, but more particularly its future possibilities. It 
is a recognized fact in foreign markets that much missionary 
introductory work must be done. As this is a condition faced 
daily in the domestic field it should not frighten the manufacturer 
who seeks foreign business. A country which apparently does 
not offer brilliant immediate prospects may, nevertheless, because 
of the character of the work to be done therein by competent 
representatives, afford the finest possibilities for the future. This 
serious question can most easily be determined by deciding what 
shall be the policy of the manufacturer in Latin American busi- 
ness. If a conscientious and earnest effort is made, and if it -is 
decided to establish a business on a firm foundation by intelligent 
work, then the prospects of large inmaediate sales may well 
be put aside in the knowledge that the future is full of 
promise. 

Capital of the Exporter. — The necessity for the outlay, by the 
importer, of large sums of money for duty, etc., makes the goods 
worth far more than the amount of the invoice. In certain coun- 
tries where parity of exchange has not been established by law, 
serious fluctuations occur in the value of the currency with 
possibilities of great loss. The careful Latin American buyer, 
knowing of this condition, endeavors to protect himself by every 
possible means. He desires, for the purpose of maintaining his 
credit standing, to have the matter of terms definitely agreed 
upon beforehand, that he may have a sufficient margin of time 
in which to take advantage of favorable fluctuations for payment. 
The manufacturer who is considering doing an export trade must 



20 EXPORTING TO LATIN AMERICA 

study his finances carefully to determine, that he is possessed of 
a sufficient capital properly to care for the the needs of his busi- 
ness. Many commercial houses who are accustomed to do a do- 
mestic business and seek trade abroad fail to remember that a 
larger capital is required for the export trade than for the home 
market. This is due to the following causes: 
iX(l) Outlay for development work or experimental campaigns*- 
^2) Time consumed in awaiting returns from shipments.— 
A (3) Special requirements necessitating additional expenditures 
for machinery, stock, material, etc. 

^4) Carrying on hand a stock of special styles for the Latin 
American trade. 

A house that is successful in building an export business and 
allows it to absorb too much of its capital may soon find itself 
overextended. This may happen more quickly than can be realized. 
The returns from shipments as a result of liberal credits will 
not be received quickly enough or as soon as expected. The result 
may be an impairment of credit. Houses which have sufficient 
capital for domestic business and may be succeeding very well 
need to consider carefully if it is possible to finance an extra volume 
of business. However, exporters who are able to discount their 
drafts can help themselves materially. This is considered in Chap- 
ter XIII. As a rule, an export business develops slowly and can 
generally be financed as it grows. 

The Importance of Efficient Organization. — This is a factor over- 
looked by many concerns seeking to extend their foreign business. 
■ By "organization'^ is meant the ability of the working force of 
the manufacturer properly to care for foreign trade. It also in- 
volves the question of appropriate machinery, tools, or instruments 
to fulfill export requirements. It likewise takes into account the- 
nonsuccess of many attempts at export business because of failure 
to delegate the matter to the exclusive attention of one person. 
Orders that have been the result of great effort have been handled 
I in the ordinary manner in which domestic business is attended to, 
Ijvith consequent disastrous results. A prime requisite of an export 
business is the appointment of one particular member of the 
organization to have full authority on matters pertaining thereto. 
In this way responsibility may be definitely fixed. Such an indi- 
vidual, usually known as the manager of the foreign department, 



HOW TO STUDY THE TRADE PROBLEM PA 

should be required to study the foreign trade situation and should 
be held accountable for all details. 

Organization of an Export Department. — The American houses_ 
which have been most successful in Latin America have found it 
necessary to place the direction of this branch of their business 
in the hands of one individual. As will be noted in later chapters, 
the development of Latin American business is usually a slow 
process and, as a rule, its care will not require the exclusive atten- 
tion of one person. If it can be arranged that an executive direct 
it, it will be desirable to do so. In any event there are so many 
details which require attention in connection , with foreign trade 
development that the greatest efficiency is assured only by definitely 
placing the responsibility. _ , 

Export Department Heads. — In many instances those who direct 
the export business for large companies have been developed within 
the organization. This is a matter which the individual manu- 
facturer must decide. Often an employee, who applies himself 
definitely to a study of Latin American trade problems, will prove 
far more efficient because of his knowledge of the business than 
one who is engaged because of his acquaintance with Latin 
American trade. On the other hand, the services of men experi- 
enced in Latin America, who have traveled there, or who have been 
in the employ of other exporting concerns, may enable the manu- 
facturer who had not previously studied .the situation to build 
up more quickly and economically a business in the new field. 
The usual methods of obtaining efficient employees may be recom- 
mended. Advertisements in New York dailies setting forth the 
requirements will usually bring many answers. The salaries of 
the managers of foreign departments naturally vary, but the far- 
sighted manufacturer will not expect much efficiency from a 
Spanish-speaking Latin American whose only recommendation is 
a slight knowledge of the foreign tongue. Because of the many 
pitfalls, the very highest type of employee should be called upon 
to develop export trade. Such a position calls for intelligence and 
imagination, and these as well as the other qualities merit recogni- 
tion in a material way. 

Cooperative Managers. — The possibility of several manufacturers 
agreeing to develop export business by prorating the expenses will 
be alluded to later. Such arrangements not only apply to the 



22 EXPOBTING TO Lx'^TIN AMEEICA 

employment of salesmen but likewise to the direction of the Latin 
/American business in general. A manufacturer may find it advan- 
tageous, because of the limited sale of his product, to place his 
business in the hands of a cooperative manager, and only individual 
conditions can determine whether this is the best policy. In 
any event, the manufacturer should satisfy himself, as in the case 
of export houses, local agents, and traveling salesmen, that his 
business is being properly cared for. Under no circumstances 
should the sole fact of inexpensiveness induce him to accept the 
services of an export manager. The same precautions may be 
urged in this matter as in the case of other foreign trade ar- 
rangements. 

Obtaining Maximum Efficiency.— The business man must assure 
himself that his cooperative manager, no matter whether his salary 
is $20. per month or $20. per day, is not burdened with too many 
representations; that he is able to give full attention to the up- 
building of his business in all territories; that the local agents 
or traveling men are properly directed, etc. There are many 
highly efficient export managers whose services may be obtained in 
the manner already indicated. Naturally a group of business men 
'in allied lines can more easily and inexpensively obtain the 
services of a highly efficient export manager by cooperation, than 
by individually engaging their own managers. 

Careful Superintendence Necessary. — In foreign trade, as in 
almost no other branch of commerce, it is essential to take nothing 
for granted. For that reason the executive of a business establish- 
ment should himself study Latin American trade problems in 
order that he may intelligently direct the work of either his 
individual manager or the cooperative manager. Every principle 
of efficiency makes this highly essential. 

System Indispensable. — No matter whether the organization of 
a foreign department calls for the services of an individual or 
of a cooperative manager, a definite system must be observed. The 
head of the foreign department must be kept fully advised of 
all developments and to him must be sent all letters, instructions, 
correspondence, etc. One of the frequent causes of non-success 
in the development of Latin American trade lies in the failure 
definitely to place responsibility, and in treating orders from other 
countries in the same manner as those from the United States. 



HOW TO STUDY THE TEADE PROBLEM 23 

The Importance of the Sales Force. — The ultimate success of any 
attempt in the Latin American field naturally depends upon this 
factor. Unless the merchant, after a consideration of all questions, 
can determine at the outset that a successful sales force can be 
recruited or a proper and efficient method of effecting sales can be 
found, failure is inevitable, and no attempt should be made at 
export business. Only losses result from haphazard effort in Latin 
American trade. 

Attention to Details Indispensable. — Unless all documents in 
connection with Latin American trade are carefully prepared and 
properly handled, heavy losses will be incurred. In Chapter XI 
the reasons for this are fully explained. A manufacturer who 
determines to solicit export business must not overlook this — one 
of the elementary facts making for success or failure in Latin 
American business. A willingness to take pains and make a proper 
effort to learn the requirements of foreign countries is necessary. 

Determining What Can be Exported. — This is a most important 
question which must be determined at the outset. The business 
man must ask himself these questions: If an effort is made, are 
there among our products any items which can be sold for export ? 
If we make an effort to sell them in Latin America, is there a 
reasonable hope for success? Are we definitely sure that there 
is a possibility of obtaining sufficient orders eventually to make 
the business profitable ? The reason for this is apparent. Articles, 
machines, etc., in daily or ordinary use in the United States, be- 
cause of varied conditions would find no sale in certain Latin 
American countries. 

Adaptability of Product. — It frequently happens that manufac- 
tures, which have a wide demand in certain of the Latin American 
countries, in others could not possibly find a market. Trade possi- 
bilities in Latin America must be analyzed in the same manner 
as in the United States. Such factors as altitude, latitude, effect 
of ocean currents, mountains, etc., should be carefully considered. 
Snow plows would be useless in Buenos Aires, the capital of the 
Argentine Republic, but they are absolutely necessary in the west- 
ern section of that country to clear the railway tracks of snow. 
Ice skates would find no market in Guayaquil, Ecuador, but in the 
extreme southern portion of Chile — at Punta Arenas, for instance 
^the winters are extremely severe, and consequently create a 



24 EXPOETING TO LATIN AMERICA 

demand for these. Men's high-cnt boots for use in mining camps 
can be sold in Peru, but would have no demand in the city of 
Montevideo, Uruguay. 

' Necessity for Considering Changes. — It is important to consider 
this question before attempting to export, as shape, size, or other 
details may make it impossible to do business. Unless changes 
which may be found necessary can be made, it would be best 

inot to attempt to enter the market. Frequently, the manufacturer, 
even if willing to adapt himself to the requirements, is unable to 
market his goods because of inability to readjust his process of 
manufacture, in which case it is likewise best to spend no money. 

_-- The Importance of Labels and Finish. — Where the shape of a 
package, its labels, the finish of an article, and its general appear- 
ance are deciding factors in entering a field, the manufacturer 
should seek to learn in advance how best to prepare his samples 
in order to reduce the cost of introductory work. These details in 
the sale of certain products are of even greater importance than 
is the case in the United States. 

The duestion of Class Demands. — In estimating the possibilities 
for the sale of an article it is not only essential to take into con- 
sideration the population of a country, but also the various classes 
of people from whom the demand will come, as an estimate based 
on population only may prove very misleading. This is because 
the percentage of peasant population in almost every country is 
extremely high, with sales of many articles restricted to the upper 



Creating a Demand When Nonexistent. — The fact that there 
has been no previous business in certain products in a country 
should not deter the merchant from seriously considering the sale 
of them. Many of the articles which today enjoy the largest - 
demand have been introduced only as the result of great effort and 
despite serious obstacles. As in the case of the domestic market, 
a demand for many manufactures may be created. The question 
of method should be given serious consideration, and experience 
in the domestic field should form the basis of a campaign in Latin 
America. The intelligent business man, after he has carefully 
studied the possibilities of the Latin American field, will be able 
to determine the best methods to follow. 

Considering Foreign Competition. — Before spending a great deal 



HOW TO STUDY THE TEADE PROBLEM 25 

of money in attempting the sale of a product in Latin America, the 
manufacturer should seriously consider whether its sale may be 
restricted by foreign competition. There are certain lines of 
manufactures on which the Europeans have been able to offer 
advantages in price, quality, or other features, and with which 
the American producers cannot compete. The wise manufacturer 
should investigate this before authorizing the expenditure of money 
which might be used to better purpose elsewhere. 

How Tariffs Affect Sales. — The effect of tariff is of extreme 
importance. The first step which the manufacturer should take 
in considering the possibilities of exporting his product is to 
ascertain exactly what duty will be charged and to determine 
whether this will make it possible to compete with local or foreign 
houses. In many instances American houses have sent salesmen 
at considerable expense on missionary trips to countries where, 
had they taken the trouble to inform themselves in advance, they 
would have found it was utterly useless to attempt business. 
The importance of the tariff and its effect upon the sale of a 
product cannot be overestimated. The business man should also 
undertake to ascertain whether his European competitor enjoys 
any advantages, and if so by what reason; whether because of 
packing in a special manner in order to obtain a more favorable 
custom classification, listing the goods in a particular way to meet 
peculiar requirements of customs officials, etc. 

The Most Desirable Territory. — It is only after a careful analysis 
of all the factors outlined in the preceding paragraphs that the" 
merchant is able to determine which field offers the best advan- 
tages. Where one country seems to hold forth great possibilities 
because of low tariff it may be adversely affected by peculiar local 
conditions or inaccessibility, and the reverse may be the case 
with a country which is closer to the place of production. The 
most minute study and analysis must determine the course which 
the manufacturer should pursue. Too much stress cannot be 
laid upon the advisability of such study. 

Means of Obtaining Information. — The manufacturer who de- 
sires to study the possibilities for the sale of his product in Latin 
America can obtain from many sources the necessary information 
on which to base a decision as to the best methods to pursue. 
Below are outlined some of the means of learning the facts; 



26 EXPOETING TO LATIN AMEEICA 

1. Branch Offices of the Department of Commerce. In the 
cities of New York, Chicago, Boston, New Orleans, San Francisco, 
Atlanta, St. Louis, Seattle, etc., are located branch offices of the 
Department of Commerce.^ In charge of these offices are repre- 
sentatives of the Department who, upon application, will give the 
information which may be on file regarding the sale of a particular 
product in each of the Latin American countries. The agents, 
upon application, will write to the office at Washington for such 
additional facts as may be desired and will cooperate in every 
possible way to obtain such data as may be needed. 

2. The Department of C ommerce^J^ljishingto^D: C. Mer- 
chants may communicate directly with the Bureau of Foreign and 
Domestic Commerce, Department of Commerce, Washington, 
which will gladly submit all data in its files and obtain for the 
applicant such information as it does not possess. It is preferable 
to communicate with the nearest branch office of. the department. 

3. Ajnerw€H^jC/msuls in Latin America. Letters may be ad- 
dressed to American Consuls in Latin America, but before doing 
so, the merchant should write the Department of Commerce at 
Washington, as the information sought is likely to be in the files of 
the Department and in that event considerable time may be saved. 

4. Businiess^Qr^nizations. Membership in certain commercial 
organizations entitles members to information relative to trade 
conditions in Latin America. Typical associations of this char- 
acter are the Philadelphia Commercial Musfeum, Philadelphia, Pa. ; 
the National Association of Manufacturers, New York; and the 
Merchant's Association of New York. Numerous commercial 
clubs and chambers of commerce in various cities are now cooperat- 
ing with their members in this direction. 

5. Pan-American Union, Washington, D. C. This is an inter- 
national organization and supplies information concerning trade 
opportunities and conditions in the American republics. The work 
of this organization is described in Chapter XXV. 

6. Export Trade Journals. As a feature of their service a 
number of the leading export journals and trade papers supply 
their advertisers with information desired relative to the possi- 
bilities of trade extension with Latin America. The list of export 
papers is given in the Appendix. 

*For complete list see p- 495. 



HOW TO STUDY THE TRADE PROBLEM 27 

7. Magazines and Newspapers. Certain magazines are now aid- 
ing their readers doing business with the Southern Republics by 
answering definite requests for information. A list of such pub- 
lications will be found in the Appendix. 

8. Banks and Financial Institutions, In order to stimulate 
interest in Latin American trade and more efficiently serve its 
clients the National City Bank of New York, which is establishing 
branches in the principal Latin American cities, will obtain from 
its branch offices information desired by American manufacturers 
relative to trade opportunities when not already on file. Many 
important and exhaustive reports concerning trade conditions in 
many lines are on file. A similar service is offered by other Amer- 
ican banks which are given the information by their own cor- 
respondents in Latin America. 

9. Export Commission Houses. When not prevented by exist- 
ing arrangements the New York Export Houses will consider 
trade arrangements for representing American manufacturers. If 
they are in a position to undertake an agency they will discuss 
trade conditions and possibilities. The method of approaching 
them is discussed in Chapter VI. 

10. Books, Publications, Reports. Much valuable information 
regarding trade opportunities in Latin America may be gleaned 
from the books and publications which deal with this subject in 
its numerous phases. A list of such publications which will be 
of great aid in the study of the export problem will be found on 
pages 

Use of Magazines for Study. — There are a number of news- 
papers, as well as magazines and technical journals, which feature 
articles relating to Latin American trade. The articles are usually 
written by recognized authorities and are important contributions 
to export literature. Among these publications are the following: 
The World's Work; Modern Methods; System; Printer's Ink; 
Business; Advertising and Selling; Frank Leslie's Magazine; 
Christian Science Monitor. An index to the articles can generally 
be obtained by addressing the publishers or by consulting "Poole's 
Index" in public libraries. 

Export Effort not Coordinated. — One of the most fruitful sources 
of information for students of the export problem are the journals 
devoted to export trade. Although the Bureau of Foreign and 



t^ EXPORTING TO LATIN AMERICA 

Domestic Commerce at Washington distributes annually many 
thousands of reports and publications regarding trade opportuni- 
ties, it takes no account of the valuable treatises on many phases 
of foreign trade problems which appear in journals devoted ex- 
clusively to the upbuilding of the export business of the United 
States. Unfortunately for the reader there is no adequate 
coordination of the excellent work being done by the various forces 
engaged in the upbuilding of American trade. These include: 
the United States Government through the Bureau of Foreign 
and Domestic Commerce, its Consuls and Commercial Attaches; 
the Export and Trade Journals; the work of individual manufac- 
turers; Chambers of Commerce and similar organizations such 
as the Pan-American Union, the Philadelphia Commercial 
Museum, the National Association of Manufacturers, etc. ; institu- 
tions of learning. Because of this lack of coordination, it is essen- 
tial that the student of export problems obtain from the various 
sources their best contributions to the general problem. 

Export Journals Useful.— The influence of export journals in the 

development of American business abroad has long been recognized. 
Generally speaking the journals are very creditable to American 
industry and well edited. The value of these journals to business 
men and to students of export questions is threefold: (1) a 
reading of the editorials makes for a broader outlook in export 
matters in general; (2) a number of the magazines publish an 
American supplement which contains valuable information. There 
are often included addresses, delivered by experienced exporters, on 
many specific problems relating to foreign trade. The informa- 
tion given by experts in these matters is often invaluable; (3) 
manufacturers who contemplate advertising campaigns can more 
intelligently plan their own copy by studying carefully the ad- 
vertisements of firms known to have been successful in Latin 
American countries, inasmuch as the advertisements of such firms 
are based on the practical experience of years, and are invariably 
planned with the Latin American viewpoint in mind; (4) the 
student of Latin American business who seeks to increase his 
knowledge of Spanish and commercial practice will find in the 
various export papers and journals a vast mine of information. 
A reading of the articles which are written by Latin Americans 
T/ill prove valuable practice while a study and analysis of the 



HOW TO STUDY THE TEADE PROBLEM 29 

advertisements from both the technical and the advertising view- 
points will prove far more valuable than much theoretical in- 
struction. 

Features of Export Journals. — In the export journals have 
appeared some of the most important contributions to the subject 
of foreign trade. As an instance may be cited Export American 
Industries, the official organ of the National Association of Manu- 
facturers. This journal has for several years published a supple- 
ment entitled How to Export, the editor of which is Hugh 
MclSTair Kahler, a recognized expert. R. G. Dun and Co. issue 
an International Edition of their Review, in which have been 
published many valuable articles relating to the trade conditions 
in the United States and Latin America and in other parts of 
the world. The American Exporter contains numerous editorials 
as well as important essays on the subject of export trade in gen- 
eral. In the department entitled "News of Export and Shipping 
Circles" are many instructive articles, while its domestic supple- 
ment (which is not included in the paper circulated abroad) also 
has much information of value. A publication of the Philadelphia 
Commercial Museum, Commercial America, will be found useful 
for like reasons. The monthly magazine. The Americas, circu- 
lated free of charge by the National City Bank of New York in 
connection with other foreign trade service, also contains many 
valuable and practical articles on export problems in general. 
The monthly journal. The South American, is a well edited and 
interesting paper which naturally concerns itself with South Amer- 
ican trade. Its lessons in Spanish are a valuable feature. The 
Cuba Review, a publication of the Munson Steamship Line, is 
devoted almost exclusively to the interests of Cuba, and readers 
will find that it contains a great deal of interest relating to that 
island. Another journal of importance is the A Nation's Business, 
published by the Chamber of Commerce of the United States in 
Washington. This contains numerous important articles relating 
to domestic and foreign business. Of the journals published in 
Spanish may be mentioned El Comercio, La Hacienda, El Ex- 
portador Americano, El Indicador Mercantil and El Mercurio. A 
reading of these publications will prove not alone of interest but 
0^ value to the student. The daily paper published in New York 
under the title Las Novedades has a considerable circulation in 



30 EXPOETING TO LATIIST AMERICA 

Latin America and as it is written by natives, the Spanish is such 
that the student will find it a valuable means of extending his 
vocabulary. (For a complete list see page 495.) 

How to Obtain Export Journals. — Because of the wide interest 
in export trade and their contributions to the literature of the 
subject, export journals should be on file in all public libraries; 
they should also be included in the libraries of Boards of Trade 
and commercial organizations. Subscriptions may be sent direct 
to the publishers whose names and subscription rates may be found 
on page 495. 

Latin America in the Magazines. — In addition to a study of the 
export journals and magazines may be suggested a systematic read- 
ing of numerous important articles regarding the Latin American 
republics and trade possibilities therein, which have appeared in 
the magazines. A valuable index to such articles and a resume 
of their contents may be found in the Bulletin of the Pan-American 
Union, Washington. The Bulletin may be obtained by writing 
to the Bureau at Washington or may be found in almost all public 
libraries. A further list of articles will be found under the 
various headings of "Poole's Index," which is in use in all public 
libraries. 

Handbooks Issued by the Government. — Still other sources of 
valuable information are the publications of the United States 
Government. The unlimited facilities at the command of the 
various departments have resulted in the preparation by experts of 
many books and reports that are valuable and useful. These 
works cover almost every field of human endeavor and include 
a particularly large number of pamphlets dealing with Latin 
America both from the geographical and the commercial standpoint. 
A list of the publications which are almost indispensable to students 
may be had by addressing the Superintendent of Documents, 
Government Printing Office, Washington, D. C. 

How Railways Cooperate. — Further assistance in studying the 
opportunities for trade expansion with Latin America may be 
obtained from various sources. Among these are the foreign freight 
agents of certain railway systems. An example of railway coopera- 
tion is that of the Southern Railway and Allied Lines, which on 
April 1st, 1915, established the office of South American Agent. 
The duty of this Agent is to assist merchants and manufacturers 



HOW TO STUDY THE TRADE PROBLEM 31 

to extend their trade to Central and South America and the West 
Indies. This assistance takes the form of information regarding 
the methods of packing and other requirements; the preparation 
of letters and circulars ; and specific information relative to market 
possibilities. Simultaneously a campaign is carried on in Latin 
American markets relative to the advantages of shipping products 
to the United States and efforts are made to arrange for the 
extension of the markets for such products. The railway also 
uses its influence to create interest in the study of Spanish and 
Portuguese, in commercial geography and in the formation of 
foreign or export departments of local Chambers of Commerce. 
Special attention is paid to the Latin American point of view 
and the work is largely of an educational character. A monthly 
bulletin containing items of interest and trade opportunities is 
furnished free of cost. 

Assistance of the National City Bank. — Still another means of 
studying the market possibilities of the Latin American countries 
is afforded by large financial institutions which are taking advan- 
tage of the Federal Reserve law to establish banks in various 
Latin American countries. Among the most prominent banks 
engaged in this work is the National City Bank of New York 
which cooperates with those interested in the development of export 
trade by investigating the market possibilities in particular lines 
of goods. Upon request to this institution, experts in the countries 
where the bank has established branches will be retained and 
reports will be prepared. The expense of obtaining such reports 
will be prorated among the applicants although the bank makes 
no charge for its service. Under this arrangement any number 
of individual manufacturers of a particular line of goods can 
obtain information regarding the possibility for marketing their 
products. The expense, if borne by one manufacturer, would be 
very heavy^ but if prorated among several is comparatively 
inexpensive. The development of this department of the Bank's 
work is in accordance with its policy to assist in every possible 
way to extend American trade. 

Cooperative Effort in Study. — Notwithstanding the fact that 
much knowledge may be gleaned from the sources outlined, manu- 
facturers frequently desire to obtain information at first hand 
by sending a representative capable of ascertaining the facts ani 



32 EXPORTING TO LATIN AMERICA 

making a definite report as to the sales possibilities of a particular 
product. Occasionally the prospective sales of a manufacturer in 
a given territory would not justify the expense of a sole representa- 
tive, in which event cooperative effort on the part of several 
manufacturers may result in obtaining the necessary information 
at a much lower cost. If a representative is desired for this pur- 
pose, the division of the expenses among the manufacturers inter- 
ested may be arranged in the manner indicated in Chapter III. 

Cooperation Among Individual Manufacturers. — There are many 
instances of successful cooperative effort in the study of market pos- 
sibilities. One of these is that of the New England Manufacturing 
Jewelers and Silversmiths Associations which cooperated with 
the Foreign Trade department of the National City Bank in 
Buenos Aires. The bank arranged with a reliable Jeweler for the 
purchase of a representative collection of silverware, the expense 
thereof being prorated among individual members. In addition, 
information was obtained relative to the importations, the buying 
seasons, the packing, the methods of payment, etc. Members of 
other trades could easily cooperate through their national or local 
organizations in order to obtain the necessary data with which 
their members could proceed intelligently. 

Other Assist^ce. — The American Express also maintains a-^ 
department to assist business men to extend their .trade with Latin 
America. It publishes a bulletin, containing notices of trade 
opportunities, etc., circulated free. Its service may be had for 
the asking. 

Valuable Aids to an Export Department. — The export manager 
should use certain books which will be found valuable in soliciting 
Latin American business, and in the preparation and shipping 
of orders from the Southern Republics. Lists of such books are- 
found in the Appendix on pages 464-495, 



CHAPTER III 

METHODS OF BUILDING BUSINESS WITH LATIN AMERICA. 
COOPERATION BY MERCHANTS 

Introduction.— Thire are various means of doing business with _ 
the merchants of Latin America and their desirability is dependent 
upon many factors. The different methods should be carefully 
studied but when a policy has been decided upon it should be 
strictly adhered to and the manufacturer should not allow him- 
self to be swayed from a course which careful analysis and study 
has shown to be the proper one to pursue. An indispensable ' 
factor is a sympathetic attitude toward Latin Americans, and an 
understanding of their customs, methods, etc. Without such an 
attitude coupled with intelligent systematic effort, success will bej 
difficult of attainment. 

Expert Advice Desirable. — While it is not essential that the 
manufacturer possess a personal experience in the countries with 
which it is planned to do business, it is highly desirable that any 
efforts made shall be intelligently directed. To learn what may 
be the best sales methods to pursue, expert advice should be 
solicited from those who have had experience in Latin American 
fields and from every other available source. 

The Various Sales Methods . — The different methods of selling 
merchandise to Latin America are as follows : 

1. Tra veling Sa lesman: These are sent direct from the fac- 
tories to the particular country or countries in which it is desired 
to do business. 

2. Grnij/p Rp prpjip.ntaf.inn. By this is meant the sending by a 
number of manufacturers of one agent to cover a particular 
territory. 

3. General Agents. These are appointed either by the personal 
representative of the manufacturer or by correspondence, and 
represent him in a country or a certain prescribed district or 
territory. 

33 



U EXPORTING TO LATIN AMERICA 

4. Local Agents. These are appointed either by the general 
agents of the manufacturer or by a traveling representative, or 
are employed by correspondence to cover a definite territory, usu- 
ally of limited extent. 

5. Export Commission HoiLses. These are generally located in 
New York City, but a number are found in San Francisco, New 
Orleans, Boston, Philadelphia, and Mobile. 

6. Direct Correspondence. This affords means of doing busi- 
ness of some extent with the importers, wholesalers, and retail 
merchants and individuals or corporations in the Latin American 
republics. In such relations, the business is transacted by 
correspondence. 

7. Advertisements in Export Journals. This affords another 
means of developing business in Latin America by creating pros- 
pects with whom correspondence is then undertaken. Business is 
often the result. 

8. European Commission Houses. Another means of doing busi- 
ness with the Latin American countries is through the European 
commission houses of Hamburg, London, Paris, and elsewhere, 
whose organizations frequently equal, if not excel, those of Amer- 
ican export houses. 

Methods of European Houses. — These companies have agencies 
in the principal cities of Latin America, and do not confine their 
efforts to European products. Not infrequently they accept out- 
right representations of American manufacturers, and in other 
instances their agents obtain orders for American products which 
are paid for by the European office or its branch in New York 
City. In such instances the shipments are made direct from the 
factory via New York, and the invoices are paid by the European 
^^office. A list of European commission houses will be found in- 
the "World's Trade Directory," Kelley's "Directory of the World" 
(see page 503, Appendix), and in local directories of Berlin, Ham- 
burg, etc. These directories may be bought as indicated in Chap- 
ter XVI, or may be consulted in the reference rooms of the 
principal libraries in the United States. Many American manu- 
facturers who have efficient agents in New York City obtain a 
considerable volume of trade through the agencies of the European 
export commission houses. 
^Considering Best Methods. — Every business man who contem- 



METHODS OF BUILDING BUSINESS 35 

plates the development of export business must determine at the 
outset, by careful study, the best methods of developing trade and 
the class of buyers he desires to interest. Practically the entire 
success of his efforts is based upon a decision of these questions, 
and it influences the character of his literature and expenditures. 
The advantages and drawbacks of these methods are carefully 
outlined in the various chapters in which these topics are dis- 
cussed. The necessity for such a careful study of methods is 
readily apparent when the vast difference in the organization of 
large corporations and small manufacturers is considered. The 
great mercantile or manufacturing institutions supplied with 
an abundance of capital, highly developed and specialized organiza- 
tions, are not confronted with the difficulties which beset the 
small dealer who lacks many of these advantages. It is quite 
generally conceded that the greatest volume of business in the 
future will be done by the smaller houses, and it is they who 
must make the most careful study before attempting an export 
business in order that all possibility of errors may be avoided. 
Every effort should be diverted so to organize sales plans that 
advantage may be taken of all mediums — export houses, local 
agents, large importers, general agents, etc. 

Conditions in Foreign Countries. — Commercial conditions in 
Latin America are somewhat dissimilar to those in the United 
States, yet the underlying principles of business there are abso- 
lutely identical with those here. A fact of great importance that 
must be remembered in studying the question is the possible 
conflict of relations between the importer, the wholesaler or Jobber, 
and the retailer. While trade in the larger cities is highly spe- 
cialized, such is not the case in the smaller communities, and the 
manufacturer who is thinking of exporting his products must re- 
member that not infrequently the purchaser of his article will be 
a manufacturer's representative, also an importing wholesaler or 
jobber, as well as a retailer. This makes it extremely important 
to determine beforehand how these conditions are to be dealt with 
in establishing a sales policy and in fixing prices, discounts, and 
terms. It is for this reason also that the manufacturer must be 
extremely careful in the distribution of his literature. 

Why the Different Classes Should be Studied. — The exporter 
must BQt be sistoDiished at thi§ variation, as orders may be re- 



36 EXPOETING TO LATIN" AMERICA 

ceived from the satne town from wholesale importers who wish to 
distribute only to the retailer, and from large retail establishments 
which will be interested in buying only for their own account. 

^ Importance of Prices and duotations. — Business in Latin Amer- 
ica is greatly aided by the establishment of a definite system of 
prices and discounts. These should be changed as rarely as possible, 
and only after the most serious consideration should they be altered 
when once quotations have been made. The Latin American 
importer or dealer who has based his own calculations on quota- 
tions made to him will find it extremely embarrassing to receive 
a notice of change of price, inasmuch as he does business in re- 
mote places, very difficult of access, which can be reached only 
with considerable delay and loss of time. Quotations, whenever 
possible, should be made c.i.f., which means, charges, insurance, 
freight (not duty) included. Especially is this of great importance 
where the item of freight is a determining factor in obtaining 
business. Every effort should be made by the manufacturer to 
study this seriously, in order to avoid being underbid by foreign 
competitors. The freight rate from the seacoast to interior towns 
should especially be ascertained, for the good will and interest 
shown by the exporter in so doing will be greatly appreciated and 
reciprocated. The importance of quoting at least to Latin Ameri- 

,_can ports cannot be too strongly emphasized. 

Various Grades Demanded. — One of the advantages of the Latin 
>American trade field is the demand for many different kinds of 
merchandise. In innumerable lines the sale is not confined to one 
grade, but has the very widest variation. This is especially true 
when one considers the Latin American field as a whole and the 
trade possibilities of the twenty individual republics. It is even 
more marked if consideration is given solely to the possibilities .of 
one city, such as Buenos Aires, for example. In such cities there 
are stores which sell only the most expensive wares, just as there 
are in New York, and there are other houses that cater only to 
the cheaper trade. It is solely a question of the representative's 
making a proper study and approaching the firm that can use his 
grade of merchandise. 

— ... Other Opportunities in Latin America. — Sales in Latin America 
can be made not only to the importers and business houses, but 
there are also other opportunities for business. Briefly, they are 



METHODS OP BUILDING BUSINESS 37 

as follows: the governments themselves; the railroad and steam- 
ship companies; construction companies engaged in the building 
of railroads, water and power plants, etc. ; mining companies ; sugar 
mills; individuals or corporations engaged in commercial enter- 
prises. 

Business with the Govemments. — Among the large purchasers of 
materials and supplies for national institutions, the army and navy, 
hospitals, etc., are the Governments themselves. In certain re- 
publics some of the railroads are owned and operated by the Gov- 
ernment and the purchases are made through the department 
authorized by law for that purpose ;\ frequently it is the Depart- 
ment of Fomento, which corresponds in a general way to our own 
Department of the Interior. The methods of doing business with 
Governments are similar to those used in selling to the American 
Government. While advertisements for the requirements of the 
several departments are usually published in the official govern- 
ment organ, the Daily Official Gazette, a local representative must 
be employed if contracts are desired. The latter must have close 
personal relations with government officials, and a thorough under- 
standing of the requirements for and means of obtaining a hear- 
ing. A competent representative may be secured in the manner 
indicated in Chapter VI. 

Railroads and Steamship Companies. — The railroads and steam- 
ship companies are among the largest buyers of American manu- 
factures and their purchases are constantly increasing in volume. 
They are usually as well organized as similar corporations in the 
United States, and the methods of doing business with them are 
practically identical. 

Construction Companies. — Among the large buyers of supplies 
of all sorts, especially for construction work, are these corpora- 
tions, many being under the direction of Americans, who naturally 
favor American implements and materials. These, during the 
coming years, offer vast opportunities. A list of such companies 
may be obtained without difficulty. (See Chapter XVI.) 

Mining Companies. — With the development of the great mining 
districts in South America, Central America, and Mexico, will 
come opportunities for increasing sales of mining machinery, sup- 
plies, etc. These institutions, particularly when directed by 
Americans, will favor American manufacturers. Their names are 



58 EXPORTING TO LATIN AMERICA 

to be found in directories, and a large business can be done with 
them by mail, but the representatives on the ground will naturally 
be given the preference. 

Sugar Mills. — One of 1 he greatest industries of the tropics is that 

of raising sugar, and its conversion into various products. Great 

opportunity is thereby alforded for the sale of sugar machinery 

; and kindred supplies, and an increasing volume of this business 

\will undoubtedly be done. 

Individuals and Corporations. — Many of the most important 
enterprises in Latin America are being developed by individuals 
or corporations whose purchases are so large that they are made 
direct of the manufacturer. This number will become increasingly 
important, and its wants should be carefully studied by the manu- 
facturer who wishes to develop an export trade. Not infrequently 
the purchases of such an individual will far exceed in value the 
combined imports of merchants or other importers in a given 
district. 

Cooperative Effort. — The difficulties of the small manufacturer 
in export business have frequently been alluded to and, unfor- 
tunately, have often been exaggerated. Many small manufacturers 
have used all the means outlined in the early paragraphs of this 
chapter to establish themselves, and in some instances have found 
that cooperation with other exporters was the most effective means 
of winning Latin American business. 

The Principle of Cooperation. — The discussion of many export 
trade policies is too academic to be understood by the novice in 
foreign trade.. This is particularly true of plans suggested for 
the' combinations of manufacturers to secure Latin American busi- 
ness. In no instance may success be expected unless the methods 
used are thoroughly practical. Even cooperation, while possessed 
of excellent features, may prove a failure unless the planning is 
done intelligently. The theory underlying cooperative methods 
""in" export trade is an excellent one, being based on the difficulty 
of obtaining proper representatives and on the great expense which 
must be incurred by the individual manufacturer in attempting 
to win foreign trade by direct efforts. 
^-^ales Organizations Already Exist. — The results which are 
sought by groups of manufacturers who combine for foreign sales 
efforts may often be achieved by organizations which already exist. 



METHODS OF BUILDING BUSINESS 39 

These are the local or general agencies which caQ be found in 
almost all Latin American countries, not alone in the larger 
cities but in the less important commercial centers. Such agents 
accept the representation of several manufacturers. The work 
of these agencies is practically duplicated when groups of manu- 
facturers cooperate, and it would often prove more advantageous 
for individual manufacturers to take advantage of this selling 
machinery than to cooperate with other manufacturers. Only in- 
dividual circumstances or conditions can determine the best policy. 

How Business Men May Cooperate. — It has been well established 
that for certain handlers of allied lines, cooperative effort is the 
most effective means for obtaining a foothold in Latin American 
trade. When a group of such merchants can be brought together 
on a thoroughly sound business basis, their combined efforts often 
prove successful. _. 

How Groups May be Formed. — Manufacturers who believe their 
products can find a demand in Latin America may invite other 
firms of like opinion to cooperate. In arranging such groups ex- 
treme care must be taken not alone in the selection of the lines 
but also in the arrangement of the expense. It would be unwise 
for manufacturers of hardware, millinery, leather, paints, and hats 
to combine. On the other hand, cooperation of concerns, all of 
whose products were sold by hardware stores, would prove logical. 
Such manufacturers might produce screws, small machinery, tools, 
and similar articles. Another group might be formed by the 
producers of ladies' apparel, underwear, hosiery, trimmings, mil- 
linery, et cetera. A third group might include the manufacturers 
of leather, dressings, findings, and other articles used by shoe- 
makers. Unless the grouping were carefully done, the efforts of 
the representative would be dissipated, inasmuch as too much 
time would be lost to interest the principal importers of these 
various products. On the other hand, when the attention -of the 
buyer had been obtained by the representative of a group of kin- 
dred manufacturers, the possibilities of sales would be much 
greater. 

The Working Details of Group Arrangements. — The representa- 
tive of a group of manufacturers may be chosen in any of the 
ways indicated in Chapter VI. When the representative has beeiH 
determined upon, the manufacturers should select from their num- ' 



40 EXPOETING TO LATIN AMERICA 

ber the one most familiar with conditions in Latin America; to 
direct the movements of the representative. The latter requires 
the same cooperation, direction, and guidance that is extended to 
the manufacturers' domestic salesmen. The attitude of a joint 
representative and the service rendered by him should be identical 
with those of the salesman in the domestic field. The fact that a 
number of manufacturers have combined will make it possible to 
engage a man of greater ability than would be possible in the case 
of the individual manufacturer and he can thus be paid an ade- 
quate salary. Only the most efficient and capable representatives 
should be sent. 

_ ITiiderstanding Regarding^ Expenses. — There should be a very 
/distinct understanding, in advance, of the proportion of expense 
' to each manufacturer, and a definite arrangement for payments. 
This should apply not only to the remuneration of the salesman 
and to his traveling expenses, but likewise to any other expenses 
incidental to the operation of the group. When manufacturers 
agree to pool interests in combinations of this character, there 
is a likelihood of dissatisfaction if the sales of one or more are 
less than those of the others, and this difficulty is usually antici- 
pated by an agreement to prorate all expenses in proportion to 
the sales for the individual manufacturers. Even when such 
experiments prove a failure, the losses to group members are 
usually very much smaller than would be the case were the ex- 
periment made by an individual manufacturer. 

How Local Business Organizations May Assist. — Business organ- 
izations should seek to lend the most practical aid in Latin Ameri- 
can trade extension. An example of such aid is the following: 

1. Coordinating groups of manufacturers. 

2. Assisting in obtaining representatives for such groups. 

3. Obtaining data relative to trade conditions in Latin America, 
on which to base the movements of the representative. 

The rooms of the business organizations may be used for the 
purpose of coordinating groups, and other valuable service may 
be rendered by an intelligent secretary. This may include the 
obtaining and careful investigation of applicants for positions as 
traveling representatives. 

The Formation of an Export Company. — Another means of estab- 
lishing a business by cooperative effort is the organization of a 



i; 



METHODS OF BITILDIIs^G BUSINESS 41 

stock company by a group of manufacturers who wish to extend 
their foreign trade. The capital of such a stock company may 
vary in proportion to the requirements of the market, the ex- 
pense incident to the establishment of the business, and the num- 
ber of salesmen employed. For such a company a manager or 
director is engaged on the best possible terms; a salary with com- 
mission based on net profits is preferable. When this form of 
organization is undertaken, the details of the management are usu- 
ally left to the director, who must be highly experienced, and 
who confers, as necessity requires, with the members. The num- 
ber of manufacturers who enter such combinations should be re- 
stricted for the reasons that have already been alluded to, viz., 
multiplicity of lines or the failure to sell kindred products may 
prove disastrous. Such a stock company permits the payment 
of a large salary to a competent manager and the employment of 
thoroughly reliable and experienced salesmen. As time is usually 
required for the successful establishment of a foreign trade, the 
wise merchant will not expect immediate profits. In the case 
of a combination of manufacturers the losses during the first two 
or three years will be smaller than if individual efforts were 
made, and at the same time the foundation for a permanent busi- 
ness is being laid. It may even prove profitable, when such com- 
binations are formed, to devote to preliminary investigation a part 
of the money subscribed. Transactions with Latin American mer- 
chants may be financed by such an organization, the combined 
credit of the firms who thus cooperate being used? for the benefit 
of all and the amount of actual cash required being thus 
minimized. 

Expenses of a Cooperative Organization. — The conditions which 
determine the expense of any cooperative organization vary greatly 
and depend entirely upon circumstances. If the plans include the 
employment of a capable manager or director, a salary of at 
least five or six thousand dollars per year may be required. If 
representatives are sent to establish offices in the principal Latin 
American capitals, similar salaries should be paid. It is of the 
greatest importance that the representative be of a high type in 
order that results may be in proportion; competency should not 
be sacrified to economy. The expenses of such a representative 
would naturally be larger than in the United States because of the 



42 EXPOETING TO LATIIST AMERICA 

importance of social life. For traveling agents or assistants, a 
salary and commission, naturally based on sales, may be calcu- 
lated at from one hundred twenty-five to one hundred seventy-five 
dollars monthly for each man. The daily expense, as indicated in 
Chapter VI, would average from ten to fifteen dollars, except in 
the case of local agents who cover a territory adjacent to a capital 
and whose expenses would naturally be materially lower. The cost 
of maintaining an office in a foreign capital, including the rent, 
stenographer, and incidental expenses, would vary in relation to 
the character of the location, et cetera, but would be in the neigh- 
borhood of thirty-five hundred to forty-five hundred dollars per 
year. These expenses prorated among a group of merchants would 
be very much less for the individual than would be the case were 
they incurred by one exporter. In the latter event the sales might 
be larger but the risk would be proportionately greater. 

The Advantages of a Lawful Price Agreement. — One of the ques- 

; tions which is being vigorously agitated is the combination of 
manufacturers for the purpose of fixing prices for export. The 
success achieved by Europeans, particularly German exporters, is 
often cited by American manufacturers who are at a disadvantage 
in this regard. Were it possible for competing dealers in certain 
lines to agree upon prices at which their output could be sold in 
foreign countries at lower prices than those charged in the United 
States, they would frequently be able to outbid European com- 
petitors. The investigations of the Federal Trade Commission 
may result in such authority being granted. Agreements in ref- 
erence to prices, percentage of output, lower freight rates, et cetera, 
would naturally come under the jurisdiction of the Commission, 

^_ which would thus safeguard such practices. 

The Importance of Specialties. — The factor of price in the sale 

Coi certain articles to Latin America is almost negligible, inasmuch 
as these are specialties, the markets for which have been created 
by advertising and by the intensive work of the manufacturers. 
An analysis of the exports of the United States and a study of 
advertisements in export trade and technical journals reveal the 
fact that a large percentage of the American export trade in manu- 
factured products is due to the sale of specialties. Because of this 
fact manufacturers of such articles would have little interest in 
coinbinjilioiiR wliich seek to reduce prices, although, on the other 



METHODS OF BUILDING BUSINESS 43 

hand, the same producers might find it advantageous to market 
their product in certain countries or districts through joint / 
representatives. 

Cooperation an Essential. — No matter what may be the attitude 
of the individual business man towards combinations, he will be 
directly interested in all cooperative efforts to further the business 
interests of the United States in Latin America. Cooperation has 
been found so valuable in every field of activity that no plan, par- 
ticularly for the development of export trade, should be rejected 
without thorough investigation. By maintaining an open mind 
and weighing the advantages and disadvantages of the various 
means of doing business, the alert manufacturer will often dis- 
cover that in certain countries or under certain conditions plans 
suggested may be adaptable to his own product. 



CHAPTEK IV 

EUROPEAN AND AMERICAN METHODS CONTRASTED 

ETTROPEAN METHODS IN LATIN AMERICA 

Introduction. — In the discussion of Latin American trade and its 
possibilities for the American merchant, the methods of Euro- 
pean firms are referred to with great frequency. It has often been 
stated that American business men find difficulty in meeting Euro- 
pean competition, and that the great preponderance of manu- 
factured articles imported into Latin America must always come 
from Europe. In this respect, the European War worked a 
considerable change, and it is recognized that the opportunities for 
the sale of American products are greater than ever before. Much, 
however, can be learned from European methods, and many Ameri- 
can houses have already adopted the means which have made 
European export houses such an important factor in the Latin 
American field. 

^ Jluropean Aid to Merchants. — Until very recently, American 
export trade received almost no support from the United States 
Government. In striking contrast should be mentioned the great 
advantages which the European manufacturers have enjoyed for 
many years in the aid of their national governments. Exporting 
having become a serious economic necessity, it became advisable 
for the governments to aid merchants in every possible way to 
increase their exports. This accounts for the paternalistic policy 
which has found various forms of expression. Among these may 
be cited the following: subsidies to steamship lines; granting 
lower railroad rates within the country itself to give an advan- 
tage to the exporter; the recognition of trusts or syndicates; 
the intimate cooperation with boards of trade and organizations 
of manufacturers; the establishment of Chambers of Commerce in 
the Latin American republics; the appointment of highly trained 
commercial attaches; and the dissemination of all useful informa- 
tion of a commercial nature to interested firms. 

44 



EUROPEAN AND AMERICAN METHODS 45 

Aid of Europeaji Associations Unlike American. — The most 
notable feature of European trade has been the remarkably rapid 
development of German oversea commerce in comparatively few 
years. A striking difference between the German and American 
export situation is the lack of cooperative effort between the nu- 
merous German organizations which exist for the purpose of 
promoting export trade to foreign countries. An explanation may 
be found in the fact that commercial conditions in Germany are 
very dissimilar to those in the United States, and the govern- 
mental aid, in this as in other activities, has been paternalistic 
and individual to a high degree. This has found expression in 
the numerous Kartels or syndicates (in some of which the Gov- 
ernment is directly interested) through which prices are fixed 
and output is controlled. In the matter of foreign trade, special 
concessions have been granted in railroad and steamship rates. 
The interests of the different commercial organizations frequently 
conflict, hence the founding of associations for the development 
of export trade in specific manufactures or in certain industrial 
districts. 

Some Important German Export Associations. — There are export 
and commercial associations in practically every important manu- 
facturing community. These organizations are semiofficial in 
character, many being subsidized by the state or provincial gov- 
ernments. Among the more important organizations of this char- 
acter have been the following: the Association for Commercial 
Geography and the Promotion of German Interests in Foreign 
Countries ( Central verein fuer Handelsgeographie und Foerderung 
Deutscher Interessen im Auslande), of Berlin. This organiza- 
tion was founded in 1878 and has grown in importance until now 
it has numbered over five thousand members. Another very im- 
portant association of Berlin has been the Exporters' League 
(Vereinigung der Export Firmen von Berlin), which is widely 
recognized as an authority on export matters. Other associations 
whose object is the furtherance of export trade are found in 
Bremen, Frankfort, Elberfeld, Niirnberg, Leipzig, Mannheim, and 
other centers of trade. 

Services of European Associations. — There have also been asso- 
ciations of the manufacturers of Saxony, of Bavaria, of Wiirttem- 
burg, etc.; whose eSorts to develop an export trade were productive 



46 EXPORTING TO LATIN" AMERICA 

i of much business. Such organizations maintain offices, and, while 

i the services rendered to members naturally vary, they are, in the 
main, the following: translations; reports on trade conditions and 
opportunities in foreign countries; trade lists; credit information; 
practical advice for the solution of difficult export problems; aid 
in the appointment of representatives; assistance in the distribu- 
tion of catalogs, price lists and advertising matter; exhibition 
of samples; the distribution of publications devoted to the gen- 
eral topic of export. In no other country have the interests of the 
business men and the Government been as efficiently coordinated 
as in the German Empire. The work of numerous trade organi- 
zations throughout the United States is now similar to that of 
German export associations, and the aid extended American manu- 
facturers by the Government is fast becoming as efficient and use- 

, ful as that of the German foreign trade service. 
XI Germany's Trade Scientifically Developed. — In the creation of 
German foreign commerce, nothing has been left to chance. Every 
detail has been scientifically worked out. At the expense of do- 
mestic traffic, Germany has granted lower rates on particular ex- 
ports in order to assist its industries to meet foreign competition. 
Protective tariffs have been, in effect, against the producers of 
raw materials which compete with German industry. There has 
been a marvelous coordination of transportation lines to favor the 
development of export trade and to insure the saving of every pos- 
sible cost. There has also been a discrimination in favor of every 
industry, and the merchant marine, the German seaports, and 

^■eommerce in general. 
r' Stii^, the Keynote of Success. — Notwithstanding the assistance 
fufmsKed by the Governments, the keynote of European success in 
the Latin American field, especially that of the Germans, has been 
study and analysis of export conditions, by individual manufac- 
turers. Someone has stated that the Germans have a genius for 
export trade ; as genius is said to be an infinite capacity for taking 
pains, it is probably true, Germany's success in every field of en- 
deavor has been due to painstaking effort in study, investigation 
and planning. The German long since learned the importance of 
thoroughly qualifying himself to supply the product required, 
even under adverse conditions. The American merchant will like- 
wise find his results in direct relation to the effort made^ 



EUEOPEAN AND AMEEICAN* METHODS 4^ 

European Export Methods in Latin America. — In the preceding 
chapter reference has been made to the work of the German manu- 
facturers in the creation of trade with Latin America. Many of 
these manufacturing establishments have been in existence for long 
periods and their growth has been a gradual but steady one. It 
is the custom of these concerns to take into their employ ambiv 
tious bright young men. The latter have had a thorough training 
in the public and C9mmercial schools, where they are taught the 
usual branches necessary in business, but likewise are given special 
instructions in commerce and a thorough training in the geog- 
raphy of foreign countries,^ the people, their languages, history, 
and customs. After their entry into these houses they are 
equipped with a knowledge of the business and particularly with 
full information regarding the country to which they are eventu- 
ally to be sent when they have become sufficiently competent. 
There they are placed in the branch office of the company, or, in 
the case of smaller concerns, they become its travelers. They 
may hold these positions for years, and, from time to time, are 
sent to new fields, that their efficiency may be increased. In 
many instances they finally return to their native countries to 
assume important executive positions with their firms, or estab- 
lish themselves on their own account. 

European Commission Houses. — A considerable volume of all 
European business is transacted through the commission houses. 
These, to a very considerable extent, are constituted as are the 
American export concerns, but are unlike them in some respects. 
Numerous German manufacturers, especially the smaller ones, are 
accustomed to place the sale of their manufactures abroad with 
one individual exporter. It is he who equips his salesmen, selects 
and arranges samples, and upon whom the manufacturer depends 
for results. In such an arrangeinent the export house itself acts 
more in the nature of a jobber, placing its own prices on the mer-/ 
chandise, and taking its profits as it sees fit. 

European Method of Discounting. — European manufacturers oft- 
times do not attempt to deal direct with the Latin American im- 
porter. As in the United States, they make arrangements for the^ 
sale of their products through export firms whose relations to 
them are precisely like those existing between an export commis- 
sion house in the United States and similar American manufac- 



48 EXPORTING TO LATIN AMERICA 

turers, a large volume of the German exports being handled through 
the Hamburg export houses. WTien an European manufacturer 
/"Or exporter who ships on open account makes a shipment, he 
attaches to the bill of lading covering it, a draft which may be 
drawn at any number of days sight, determined upon in advance. 
This is taken to a bank, discounted, and the proceeds placed to 
the manufacturer's credit. Naturally, in a transaction of this 
character the banker must have implicit confidence in the manu- 
facturer, inasmuch as his contingent liability remains the same. 
He must also have a thorough knowledge of the country in order 
that he may have no fear regarding the consignee. So highly 
developed, however, is this knowledge that manufacturers find no 
difficulty whatever in financing their shipments. This method 
enables them to do business abroad in a manner which would 
otherwise not be possible. 

How Europeans Finance Export Shipments. — One of the dis- 
advantages which has been urged against American firms in the 
past has been their inability to finance shipments with the same 
facility as that shown by European exporters. While a number 
of the most important American export houses have had banking 
arrangements which permitted them to discount their drafts on 
their correspondents in Latin America with New York or Euro- 
pean banks, the custom of financing shipments to Latin America 
by discounting drafts has not become general, particularly among 
the smaller manufacturers and those exporters who have made 
shipments on open accounts. An increasingly large number of 
shippers will undoubtedly avail themselves of the privileges of 
the new Federal Reserve Banking Law, although the latter still 
requires certain amendments if the fullest benefits are to be re- 
alized by the shippers. This subject is fully treated in Chapter 

..Development of Trade Experts.— A natural result of the develop- 
ment of the export business was the education of a large body of 
men highly trained in its requirements. These experts are asso- 
ciated with banks and financial institutions, with the result that 
the bankers themselves have as thorough a knowledge of condi- 
tions prevailing in each of the countries as the individual shipper. 
In its aid to the exporters the Government has always had in 
mindxthe interests of the smaller merchant, and by its system of 



EUROPEAN AND AMEEICAN METHODS 49 

financial help has made it possible for the less powerful manu- 
facturer to develop business which otherwise would have been 
impossible. 

The Question of Foreign Competition. — One of the questions that ' 
most frequently arises in considering trade extension to Latin 
America is the matter of foreign competition. There has long 
prevailed an idea that certain European countries, because of 
cheap labor, are enabled to undersell the Americans, and that 
the development of a market for similar products of the United 
States is therefore impossible. Investigation will prove that this 
conclusion, as a general fact, is fallacious. The Latin American 
merchant is one of the most efficient in the world and, because 
of the necessity for considering complex tariff schedules and fluc- 
tuations in currency, is accustomed to make very close calculations. 
He is an excellent judge of quality and thoroughly competent to" " 
appreciate the difference between low cost and quality and a higher 
cost with corresponding quality. The judgment of the ultimate 
consumer is another factor to reckon with and if the superiority 
or desirability of an article is demonstrated he is quick to realize 
that fact and willing to pay in accordance with that standard. As 
a specific instance may be cited the sale of a certain American 
machete which has become famous throughout Latin America. 
Its imitation has frequently been attempted by European cutleiy 
manufacturers but without success. The imitation has often been 
placed in stock by dealers who have sought to make a larger profit 
than was afforded by the American article, but they were com- 
pelled to abandon the sale when the natives returned the imita- 
tion with the complaint that it was far inferior to the one they 
had been accustomed to use. This is the supreme test in Latin 
America as in other markets, and the alert, efficient representative 
who knows his product thoroughly will have absolutely no difficulty 
in overcoming the prejudices of the average dealer in the matter J 
of price. 

European Commerce Benefited by Emigration. — European mer- 
chants have enjoyed certain advantages over their American com- 
petitors in the development of their commerce with Latin Amer- 
ica. These advantages have resulted from the emigration to the 
Latin American states of the natives of Germany, France, Eng- 
land, and, particularly, Spain and Italy. A logical result of this 



50 EXPORTING TO LATI]S^ AMERICA 

emigration has been a demand for the products and manufactures 
of their home countries, which they prefer to buy from their own 
exporters because of the familiarity with the language, customs, 
business conditions, etc. The Europeans have taken the fullest 
advantage of this condition and have sought in every possible 
way to strengthen their commercial ties with their countrymen in 
the Latin American republics. As an example of this policy may 
be cited the case of Italy. The Italian immigration into Argen- 
tina, Brazil, Chile, and Uruguay has been very large. Important 
colonies are found in many cities, with newspapers, clubs. Cham- 
bers of Commerce and banking institutions exclusively Italian. 
The Italian Government has vigorously ' aided the movement to 
increase the prestige and power of her citizens in the newer 
republics, and her manufacturers have achieved the most notable 
successes in these fields, which they have assiduously cultivated. 
Judged by American standards, the growth of Italian commerce 
with Latin America was not rapid, although a steady one. How- 
ever, the foundation was firmly laid and the methods used were 
as thorough and careful as those so characteristic of the Germans. 

American Emigration Desirable. — The success achieved by Euro- 
pean concerns as a direct result of emigration to Latin America 
may well be studied by the North Americans. The establishment of 
American business houses. Chambers of Commerce, banks, and 
agencies, should be aided by every possible means. The location of 
American citizens in the Latin American countries will auto- 
matically create a demand for the products and manufactures of 
the United States, which will result in an expansion of busi- 
ness. American manufacturers can well afford to study the de- 
velopment of European trade in Latin America as a means to 
a more rapid development of their trade with those countries^. 
Particularly should they remember the attitude of the Europeans 
toward foreign commerce — a regard for it as a permanent asset 
which must be carefully conserved in times of prosperity as well 
as in periods of dullness. 

The American Attitude Toward Export Trade. — The develop- 
ment of commerce between the United States and the Latin Ameri- 
can republics has been marked by innumerable failures of otherwise 
successful business houses to obtain a foothold in that field of 
vast possibilities. The chief causes of nonsuccess have been those 



EUEOPEAlSr AND AMERICAN METHODS 51 

which characterize the difference between European and American 
business methods in general. Owing to the rapid development of 
the resources of the United States, American merchants have not 
greatly concerned themselves with opportunities in foreign coun- 
tries. Until a comparatively recent date, scientific management 
or the application of scientific principles to commercial practices 
have had but slight recognition. Wasteful methods have been the 
rule in almost every field of manufacturing and business admin- 
istration. A lack of thoroughness, an indifference to detail, and 
a readiness to generalize have marked the industrial development of 
the United States. i- — -* 

Many American Efforts Misdirected. — As a natural result oflhis' 
attitude toward business in general, the same method marked 
the attempts to obtain trade in Latin America. Many American 
business men, suddenly impressed with the need of obtaining 
Latin American trade, have undertaken to do so in a manner 
which would seem both ridiculous and inexcusable to their Euro- 
pean competitors. By far the greater number of attempts have 
been made during periods of depression when it seemed desirable 
to obtain a volume of trade to replace lost sales in the domestic 
field. Not infrequently, where a fair measure of success followed 
even such puerile attempts, the field was abandoned as soon as 
dullness gave way to prosperity at home, and the ground that 
had been gained at great expense was again lost. 

Need for Experts Disregarded. — The necessity of a trained or 
expert adviser has likewise been frequently overlooked, and even 
more often the direction of the foreign business has been attempted 
with no previous experience to warrant it. A prejudice against 
the employment of competent managers has often resulted in losses 
which a more intelligent policy could have avoided. -^ 

American Refusal to Follow Directions. — Another serious fault 1 
of the American manufacturer has been his refusal to comply with 
the simplest directions of his foreign patrons in the matter of pack- 
ing, the preparation and sending of documents, and the observance 
of shipping directions. His stubborn insistence upon shipping 
articles not ordered but substituted by him on the theory that 
they would be "good enough" has worked incalculable harm. Lack 
of appreciation of the Latin American viewpoint toward adver- 
tising matter, catalogs, price lists, and the conduct of correspond- 



62 EXPOETI^G TO LATIN" AMERICA 

ence, has likewise aroused great dissatisfaction. Perhaps the 
greatest contrast between European and American business prac- 
tices may be found in the attitude towards sales methods. The 
average American manufacturer who has undertaken to gain 
Latin American trade has considered only first cost. 

European Manufacturers' Study and Training. — The European 
business man, often after a long period of study and preparation, 
sends a representative (who has had a technical training and speaks 
the languages of the countries he is to visit) on what is practically 
a missionary or introductory tour, contenting himself with the 
knowledge that the eventual results will justify the expense of 
the first trip, which he considers an investment. The informa- 
tion which is gleaned by the representative and the connections 
made are turned to good account in later years. 

American Salesmen Lack Preparation. — In sharp contrast are 
the methods of the American merchant who, without previous 
study, sends a traveling agent to countries of whose business 
conditions he knows absolutely nothing, and expects the repre- 
sentative's first trip to be highly profitable. In numerous in- 
stances the salesman speaks only English and is unwilling to adapt 
himself to the business customs and manners of the Latin Amer- 
ican merchant. 

European and American Methods Contrasted. — The European 
method may be epitomized as follows: patient study and analysis; 
adaptation of sales methods to the desires of the people and 
necessities of the situation; thoroughness in every detail; and 
absolute cooperation. All this is in striking contrast to practices 
which have until recently marked most American efforts for trade 
expansion. The success achieved by the corporations which have 
firmly established themselves in the Latin American field is serving 
to demonstrate to other manufacturers the necessity of like 
methods. Upon the adoption of this course depends the future of 
North American success in the Southern trade field. 

METHODS OF SUCCESSFTJI AMERICAN CORPORATIONS IN 
LATIN AMERICA 

Introduction. — In discussing trade opportunities in Latin Amer- 
ica the success of European exporters has been cited as evidence 



EUROPEAN^ AND AMERICAN METHODS 53 

of the superiority of their methods. However, an analysis of the 
exports of American houses to Latin America discloses the fact 
that a business of extraordinary volume has been created there 
by a number of large corporations who have been quite as suc- 
cessful in overcoming trade obstacles in Latin America as they 
have been in the home market. Many of these manufacturers, 
with the determination successfully to build a business in Latin 
America, made an exhaustive investigation of trade possibilities 
before attempting to effect sales. Like their farseeing European 
competitors they have devoted the same energy in time of pros- 
perity as of adversity, to their export as to their domestic business. 
Methods of Certain American Firms. — The methods used by the 
corporations in question have varied in character, inasmuch as 
the conditions under which they worked were diverse. In some 
instances the companies themselves undertook to place their manu- 
factures by direct methods. In other instances combinations of 
noncompeting companies were formed and by adhering to the 
same principles as those of the larger manufacturers were able 
to achieve equal success in proportion to the effort expended. The 
concerns who formed the combinations realized that the possibili- 
ties for individual sales did not justify an exclusive traveling 
agent. By pooling their interests they were able to command 
the services of experienced and trained men to act as traveling 
representatives at a remuneration which was part salary and part 
commission. These representatives not only visited the houses 
in Latin America with whom selling connections had been estab- 
lished, but likewise called upon the subagencies and accompanied 
the local or territorial travelers for the purpose of keeping them 
fully abreast of changes and improvements, thus insuring the 
highest efficiency. An individual manufacturer in any of the 
groups would not have been Justified in such an expense, but as 
a group member the expenses were proportionately smaller. The 
advantages of group representation lay not only in the economy 
of expense but likewise in the matter of price. Particularly was 
this so when competitive lines were handled by the same repre- 
sentative who was enabled to obtain better prices than would 
have been the case had the lines been handled by different indi- 
viduals, both contesting for the trade. It was demonstrated by 
actual experience that such an arrangement was possible and 



54 EXPORTING TO LATIN AMERICA 

profitable, the chief reason being that in almost all Latin Amer- 
ican cities importers are averse to buying the brands or products 
used by a competitor. Where competing lines have been sold by 
a competent representative with a thorough technical knowledge 
and possessed of good judgment, the results to all concerned have 
been much more satisfactory than would have been the case had 
individual effort been made. This is particularly true in those 
countries which are less developed, with a more scattered popu- 
lation, and with a consequently reduced buying power. 

The Result of Individual Effort. — Among the American firms 
that have been most successful in establishing a permanent trade 
in the Latin American markets because of individual effort may be 
cited: the Singer Manufacturing Company, makers of the Singer 
Sewing Machine; the International Harvester Company; the Na- 
tional Cash Register Company; the U. S. Steel Company; and 
the Standard Oil Company. The general principles underlying the 
sales efforts of these corporations were identical but they have 
constantly sought to improve their methods and to conform to 
the changing conditions in the different countries. The efforts 
of these concerns may be outlined as follows: 

1. The Character of the Organization. The executives or di- 
rectors of the company having determined to establish a business 
upon a firm basis in the Latin American countries, a thorough 
study and analysis of trade conditions was decided upon. The 
first step was the formation of the organization. This consisted 
of a competent personnel of technical experts in the business^ 
together with men possessing an intimate knowledge of the trade 
conditions, the languages, and the people of Latin America. After 
personal visits to the countries in which it was desired to estab- 
lish relations, the results of the investigation were carefully 
weighed and a policy outlined. 

2. The Appointment of Agents. As a result of correspondence 
and visits of experts representing the manufacturers, general 
agents were named in the principal cities. This was done only 
after a most careful investigation and the agents were selected 
because of their standing in the community, their responsibility 
and ability. Every effort was made to obtain as agents men of 
affairs whose past records seemed to insure their success with 
the new products. 



EUROPEAN AND AMEEICAN METHODS 66 

3. The Subdivision of Territories. As the business developed, 
and as conditions warranted, territories were further divided and 
either subagents or traveling representatives were named. This 
was done under the direction of the executive in charge of the 
export business and in arrangement with the general agent. Eep- 
resentatives were selected with the most minute care. The human 
factor, as an element in successful dealing with Latin America, 
is as important as in the United States. The salesmen chosen 
were preferably natives of the country rather than Americans, 
because it seemed less difficult to teach natives the business than 
to instruct Americans in the languages, business conditions, and 
customs of the people. Some of the corporations most successful 
in Latin American trade hold to the belief that an American can 
be taught only with the greatest difficulty, and then in but excep- 
tional cases, to enter fully into the life of the Latin American 
people. 

4. Instruction of Local Agents. The matter of the thorough 
instruction of agents, traveling salesmen and mechanics charged 
with overhauling and repairing machines was undertaken with 
the most rigid exactness. This required time, executive ability, 
and expense, but well repaid the effort put forth. 

5. Visits to Home Office by General Agents. From time to time 
the general agents were brought to the American home offices 
and factories. In every instance possible where conditions war- 
ranted the traveling salesmen, foremen in charge of maintenance 
and repairs were also 'taken to the United States for additional 
instruction. 

6. Inspection of Agendes by Executives. In certain of the cor- 
porations the executives in charge of the export business were 
compelled periodically to visit the general and subagencies in 
order that they might be thoroughly in touch with all the condi- 
tions prevailing in the various countries, and that, on the other 
hand, the representatives might be kept in close touch with the 
home office. 

7. Analysis of Market Conditions. Market and local conditions 
were carefully studied, articles were packed as required, and 
everything that could possibly be done to make the sales easier, 
from the standpoint of freight, tariff, and other regulations, was 
cheerfully complied with. 



66 EXPOETING TO hATm AMERICA 

8. Translation of Advertising Matter, All advertising matter 
was translated into Portuguese or Spanish by technically trained 
men, natives of Latin America, with a thorough knowledge not 
only of the languages but of the business. This also applied to 
advertisements published in trade papers, export organs, local 
newspapers, etc. 

9. Liberal Advertising Policy. The value of advertising and 
general publicity was carefully considered and provided for to 
the same extent as in the United States. 

10. Sales Agreements. Arrangements entered into with general 
or local agents were scrupulously regarded. Every effort was 
made to retain the good will and enthusiasm of agents, subagents 
and salesmen. 

11. Local Requirements Supplied. The local trade requirements 
were carefully regarded and an enormous business established 
by one firm through branch offices which sold to the consumer. In 
making sales on installments the exact features of the American 
policy were adhered to. Another concern (manufacturers of a 
typewriter) found it advantageous to quote a price subject to 
discount for their machine which has a very large sale in this 
country at a net price. This course was adopted because the 
Latin Americans were used to discounts and the concession thus 
made encouraged cash payments. The success achieved by these 
corporations merely demonstrates what intelligent effort will ac' 
complish in establishing business with Latin America. 



CHAPTEE V 

EXPORT COMMISSION HOUSES AND EXPORT AGENTS. THEIR 

FUNCTIONS 



PROBLEMS OF EXPORT MERCHANTS 

Introdnction. — The most important factor in the development 
of trade with the Latin American republics has been the export 
commission house. The exports of the United States to the Latin 
American republics in 1915 were $327,307,055; between 60 per 
cent, and 70 per cent, of this business was secured and financed 
by export commission houses, hence their activities, advantages, 
and drawbacks deserve important consideration. The two chief 
reasons why the export house has been such an important factor 
in the trade development of the United States with Latin America 
are the following: 

1. Because of its highly trained organization, many American 
manufacturers, through it, have been enabled to place their 
products in the Latin American countries at the minimum ex- 
pense, trouble, and risk. This has been so whether the export 
house sold on commission or for its own account. 

2. The merchant of Latin America has found it of particular 
assistance to trade with the export house because of the credit 
facilities thus afforded him. In the rapidly developing Latin 
American republics there is a general shortage of capital; by 
making consignments of raw products to the export house a basis 
for larger credit is established. 

"What an Export House Is. — The export commission house serves 
as the agent in the United States for merchants in foreign coun- 
tries. In that capacity it acts as consignee for the foreign ex- 
porter who ships to it raw products to be sold for his account. 
Its most important function as agent is the placing, with Amer- 
ican manufacturers, of orders sent to it by its correspondents; it 
finances the shipments; that is, it pays the manufacturers' bills 
and in turn collects from the foreign merchant; it attends to all 



58 EXPOETING TO LATIN AMEEICA 

details of forwarding the shipments, including the payment of 
the interior freight, the transfer to the ship, the placing of insur- 
ance, etc. 

Export House Sales on Own Account. — Besides serving in the 
capacities outlined in the previous paragraph, many export 
houses today make sales on their own account. One of 
the most interesting developments of the export commis- 
sion house business has been this change in policy. Orig- 
inally its activities were confined strictly to the execution of 
"indents" for specific products received from its agents or clients 
abroad. Such orders were transmitted to the manufacturers 
whose names were specified in the "indent" and for whose account 
the sales were made, a commission for the service being charged 
to the buyer. In consequence of increasing competition and 
! the narrowing margin of profit, many commission houses now make 
purchases outright from manufacturers, and the products are 
labeled with their individual brands and labels. Stocks are car- 
ried in the principal cities of Latin America in order that deliv- 
eries may be made more promptly and economically. In this 
respect their methods are similar to those of German and other 
European export houses who likewise sell on their own account 
products and manufactures in general which may be most advan- 
tageously handled under such a system. Despite this new phase 
of export house practice, many firms still confine themselves 
strictly to commission sales. 

How Export Commission Houses Trade with Latin Americans. — 
The importer and exporter in Latin America is often the same 
person, and this may be said to apply with special force to mer- 
chants located in the more remote places and in the less developed 
communities. In the larger cities, specializing is more frequent; 
and trade and commerce have been developed to the same high 
degree of complexity as in the United States. In many places, 
particularly seaports, the dealer is accustomed to ship merchandise 
of every conceivable kind to merchants in the interior. In return 
he receives the native raw products, such as skins, hides, vegetable 
ivory, rubber, medicinal plants, etc. These goods are properly 
prepared, packed and shipped to European or American export 
houses. The largest percentage of goods for the United States is 
Qonsigned to the export commission houses of New York, where 



EXPORT COMMISSIOJ^ HOUSES ANiD AGENTS 59 

the bulk of this business is done. The consignments are then 
sold by the commission houses for the account of the Latin 
American correspondent, and the proceeds are applied to the credit 
of the consignor. 

Advantages of Trading to Export Commission Houses. — It will 
be readily seen that trading gives the export commission house 
peculiar advantages over the manufacturer who cannot handle 
the consignments of Latin American dealers. By reason of the 
consignments, the export house enjoys a tremendous advantage in 
the extending of credit. This is a point which the export house 
emphasizes when seeking new trade relations with Latin American 
importers. It is also perhaps the greatest drawback to the up- 
building of direct trade relations by the American manufacturer. 

How Export Commission Houses Have Increased the Trade with 
Latin America. — Not only because of its facility for handling the 
products of Latin America, but because of its machinery for selling 
American manufactured products, is the export house so great 
a factor in the Latin American trade. While direct relations be- 
tween the American manufacturers and the Latin American mer- 
chant are very desirable, this is in many instances practically 
impossible. A great many manufacturers are either unwilling to 
expend money and time in pioneer work indispensable to export 
success, or the nature of their goods is such that they cannot pos- 
sibly undertake direct export business. For such concerns the 
export commission house affords the best medium for making sales 
to Latin America. Although there are some products that cannot 
possibly be marketed through the export houses because of tech- 
nical considerations, there are but few for which a properly con- 
ducted export house cannot find an adequate sale. " 

The Natural Field of Export Commission Houses. — The export 
commission house in almost every form is represented in prac- 
tically all important places in Latin America. Some concerns limit 
their activities to certain zones or districts in one country; others 
cover cities in all the republics; while still others — especially those 
in process of development — confine their activities to but one or 
more countries. The representation of an export house is largely 
dependent upon obtaining the services of experts and the chief 
difficulty is to obtain competent experienced men in Latin America 
as well as in the United States. The countries in which the 



60 EXPOETING TO LATIN AMERICA 

export commission house has assumed the greatest importance 
and is the most vital factor is in those republics (particularly the 
less developed ones) where business has not yet assumed great 
complexity. Chief among these are the republics of Central Amer- 
ica, the United States of Colombia, Ecuador, Peru, and Bolivia. 
Notwithstanding this fact, branch offices or correspondents of the 
New York houses are found scattered throughout every Latin 
American country. 

The Location of the Export Houses. — As is quite natural, the 
export commission houses flourish in seaboard cities. As the great 
bulk of export business flows through the port of New York, by 
far the largest number of such houses are located in that city. 
However, there are a number of establishments of the same kind 
in San Francisco, but most of their business is with the West 
Coast cities of South America. Export commission houses who 
deal almost exclusively with the republics of Central America are 
found in New Orleans and Mobile. Other export houses are located 
in Baltimore and Boston, and in very limited numbers in interior 
cities, such as Chicago and St. Louis. 

Organization of the Export Commission House. — The character 
of the business transacted by the export commission house re- 
quires a competent organization, and this varies in direct ratio 
to the volume of business transacted. It ranges from a very 
small number of clerks, in the case of the less important houses, 
to an army of highly trained employees in those firms which 
maintain branch offices, traveling agents, and correspondents in 
almost every city of Latin America. Roughly, the organization 
may be divided as follows: 

1. The New York Office. This includes the manager, assistant 
to manager and clerks. 

2. Branch Offices in Principal Latin American Cities. These 
are in charge of men whose knowledge has been acquired in the 
conduct of the business, who are assisted by a staff of salesmen 
and clerks. 

3. Traveling Agents. Frequently traveling agents are sent di- 
rect from the New York offices to territories where no branches 
have been established, for the purpose of soliciting orders and 
consignments, and visiting correspondents. 

4. Local Salesmen. These are usually attached to the branch 



EXPORT COMMISSION HOUSES Al^D AGENTS 61 

offices under whose guidance and direction they work. In some 
instances they are directed from the New York office. 

5. Local Sales Agents. These are usually located in the more 
remote places where they act in the interests of the New York 
house and under its direct guidance or that of the nearest branch 
office. 

The Highly Developed Export Commission House : Its Functions. 
The development of trade relations with Latin America has been 
marked by the growth of many export concerns, whose business 
has increased from year to year, and who, from small, insignificant 
organizations engaged merely in trading, have become highly com- 
plex mercantile machines. The development of their business has 
made it necessary for them to add, from time to time, new depart- 
ments and to assume additional functions. One of the largest 
and most successful export commission houses in New York today 
concerns itself with the following activities: 

1. Consignee for Latin American Shippers. It acts as the 
selling agent for the products consigned to it by Latin American 
dealers. 

2. Represents American Manufacturers. Through the traveling 
and local agents attached to its branch offices it undertakes repre- 
sentation of American manufacturers for the sale of their products. 

3. Operates Sailing Vessels and Steamship Lines. It conducts 
a general freight and passenger business with various Latin Amer- 
ican republics. 

4. Banking and Foreign Exchange. It carries on a general 
banking business and buys and sells foreign exchange. 

5. Fiscal Agent for Latin American Governments. In this 
capacity it handles important financial matters for the Latin Amer- 
ican republics which it represents. 

Why Export Commission Houses Maintain Staffs of Experts-^r^-.- 
In order to transact business successfully in Latin America, a/ 
minute knowledge of the country, the people, and the requirements 
of trade, is indispensable. This knowledge can only be acquired 
by years of study and actual experience. The American commis- 
sion house handles such a great variety of merchandise that it 
is necessary to have experts with a thorough knowledge of condi- 
tions, not only in one country, but in every republic where it does 
business. The conditions for the sale of a given article, as a 



62 EXPOETING TO LATIN AMEEICA 

rule, are very dissimilar in each of the Latin American republics, 
and it is natural that only concerns who transact a large businc 
can afford to employ experts whose remunerate 



knowledge or experience. The information ^I^^^^^HplBiot 
from these experts is of the widest range, coverin^noWHF Amer- 
ican and European competition but such details as the 
able patterns, the proper methods for making sales, corre( 
ing, shipping details, and all essentials for the selling 
chandise. The manufacturer seeking to extend his business to 
Latin America will find the advice and counsel of trained experts 
most valuable in the matter of distribution of catalogs, the ap- 
pointment of agents, and, above all, the best fields for work. 
""" How Export Commissioii Houses Handle Finances. — In transact- 
ing its business with Latin America a considerable amount of 
capital is required by the export commission house. This is par- 
ticularly due to the fact that the large credits required by the 
Latin American importers make heavy demands on the export 
house. When it ships goods, it makes a draft, the time for pay- 
ment of which varies from thirty to one hundred and twenty days 
after sight. To obtain money for the payment of the American 
manufacturer, it is obliged to tie up in banks, as a margin, an 
extremely large amount, its contingent liability being always for 
the amount of its entire transactions until they are completed, this 
requiring five or six months. If a commission house does a busi- 
ness of $200,000. per month, its liabilities will be at least $950,000. 
to $1,250,000. A great advantage will be afforded responsible 
iVmerican export houses by the new currency law, permitting the 
rediscounting of prime commercial paper, so that it will henceforth 
be able more easily to place a larger percentage of its transac- 
tions on a cash basis. To a very considerable extent, this will 
equalize the advantages heretofore enjoyed by European exporters, 
as European banks have been willing to offer unusual aid to the 
exporter, his paper being discounted very freely. This is largely 
due to the fact that in Europe the financiers have been more 
familiar with conditions prevailing in foreign countries, and find 
it to their decided advantage to encourage the exporters. Their 
risk, in reality, has been very small for the reason that shipments 
have been made to a great number of dealers in widely scattered 
places. A point that must not be overlooked in connection with 



EXPORT COMMISSION HOUSES AND AGENTS 63 

^nancing shipments to Latin America is that the American export 
amission house, in addition to assuming the payment of the 
^he^me^^j^ manufacturers, must also advance the money 
^ht, cartage, lighterage, and for the prepay- 
^n freight. Naturally where a large business is trans- 
Qs becomes a very important item. 
:port Commission Houses Serve American Manufaetiirers. 
len the American manufacturer is represented by an export 
commission house, he is relieved of all the petty details in connec- 
tion with the forwarding of goods from New York, their proper 
routing and shipping. It is unnecessary for him to make an 
investigation of the credit of the Latin American dealers or a 
study of packing and custom house requirements, such details 
being furnished by the export house with the order. He receives 
cash in payment of his goods practically within ten days or two 
weeks from the time of shipment, and the entire transaction re- 
quires less care and thought than the handling of an order from 
customers in the United States. By reason of the volume of 
business done by the export commission house, the manufacturer 
may feel assured that his goods reach his customer more eco- 
nomically than if he shipped them direct on individual bills of 
lading.' When the export house places many articles on one 
steamship manifest, the charges for handling are subdivided and 
as a rule the expense attached to individual lots is thus very 
much reduced. It is reasonable to assume that for this reason 
alone export commission houses will always be needed. 

Marketing Goods Through Export Commission Houses. — When 
the manufacturer has determined that it is to his best interest 
to sell his goods in Latin America through, export commission 
houses the following method may be adopted: 

1. A list of the export firms located in New York, New Orleans, 
or San Francisco, should be obtained. They are found in the 
City Directories, which may be consulted in almost any public 
library or directory publishing house, while there are also specially 
compiled lists furnished by concerns whose business it is to sell 
them. 

Other Sources of Names. A valuable publication which is 
issued annually is the "Export Trade Directory," one of 
the best means of obtaining accurate information concern- 



64 EXPORTINa TO LATIK AMERICA 

ing the export commission houses and their fields. In this di- 
rectory there appears a sketch of the principal export houses 
with an outline of the countries in which they do business, to- 
gether with a list of merchandise in which they specialize. It is 
described on page 464. Another authoritative publication is the 
"Exporters' Encyclopedia.'' In this book are given shipping routes, 
directions for preparation of documents, etc. At the beginning 
of each chapter there is given a list of the principal export houses 
which trade with that country and although not complete it is 
nevertheless valuable. This volume is on file in the principal 
public libraries. It is also listed on page 464. 

2. The manufacturer must consider which house affords the 
greatest advantages. He must endeavor to ascertain which con- 
cern can best serve his purposes; that is, whether only one organi- 
zation can most efficiently care for his interests in all the countries 
or whether it would be better to cover one field through a certain 
house and other fields by still different concerns. The financial 
responsibility of the houses should be carefully considered, and 
the mercantile agencies should be consulted in advance for their 
ratings. 

3. For the purpose of determining how the mutual interests 
of the manufacturer and the Commission House can best be served, 
letters should be written by the manufacturer to the firms deter- 
mined upon and full details given regarding the following par- 
ticulars : 

(a) The goods which it is desired to export. 

(b) Their points of superiority should be emphasized. 

(c) Adaptability to Latin American markets should be dem- 
onstrated. 

(d) Qualifications of the manufacturer to handle export busL- 
ness should be shown. 

(e) Willingness to attend to necessary details should be in- 
dicated. 

(f) Catalogs, price lists, and printed matter should be mailed. 

(g) Terms, discounts, and commissions should be specified, 
(h) Territory to be covered should be outlined. 

(i) The export house should be requested to give full details 
of its organization and its means for most effectively marketing 
the product in the given territory. 



EXPORT COMMISSION HOUSES AND AGENTS 65 

Need for Thorough TTiiderstandiiigs. — For the best mutual inter- 
ests of the manufacturer and the export commission house, there 
should be a thorough understanding on the following points which 
may be considered. the basis of successful relations between the 
manufacturer and export house : 

1. Agreement Regarding Time. The time to be allowed for the 
development of the business in a given territory should be specified. 
This is essential because of the varying conditions in the several 
republics. To develop properly a certain field requires a much 
longer time in one country than in another. 

2. Understanding Regarding Field. There should be a distinct 
understanding relative to the field or territory to be worked. It is 
very unwise for the manufacturer to grant selling rights without 
specifying exactly what countries or cities are to be included in 
the territory. Latin America is so large that any manufacturer 
who wishes to make a consistent and logical effort permanently to 
establish a market for his goods must be specific and dare not 
deal in generalities. This cannot be too strongly emphasized. 

3. Methods of Marketing Must Be Determined. The exact meth- 
ods by which it is proposed to market the goods must be determined 
beforehand. The wise manufacturer will not leave to chance or 
to the mercies of an unsympathetic agent or correspondent the 
method to be followed in establishing a market for his product. It 
is of the utmost importance that the experience he has gained 
in the domestic field be turned into best account in entering the 
Latin American territory. The easier the path can be made for 
the representative, especially one unacquainted with the merits or 
peculiarities of the new line, the greater will be the sales, and 
the shorter the time required- for its introduction. The repre- 
sentative of a responsible export house in Peru may achieve an 
extraordinary success with a given article while the agent of the 
same house in Chile may meet with complete failure. It is, there- 
fore, of prime importance that the American manufacturer safe- 
guard his representation most carefully and thus avoid pitfalls. 

4. Agreement Regarding Cooperative Work. The kind of cooper- 
ative work between export house, importer, and manufacturer, 
should be decided upon. The wise manufacturer will encourage 
his export house connection, and in turn the latter's agents, in 
every possible way, by intensive cooperative work with the dealer. 



/ 



66 EXPORTING TO LATIX AMERICA 

This should take the form of developing prospects, of "following 
up'' former buyers, and of obtaining additional orders from initial 
sales effected by the agent. This cooperative work should stimu- 
late the agent to greatest activity and there should be no mis- 
understanding in regard to it after the business has begun. 

5. Understanding Regarding Other Sales Methods. It should 
be determined whether the American manufacturer will solicit 
business direct in addition to his efforts through the export house. 
Many previous efforts to enter the Latin American field have 
foundered on this rock. Here again must the principle of coopera- 
tion be emphasized in advocating the development of "leads" or 
prospects for local agents to whom these are turned over. This 
policy will result in an infinitely greater volume of business if 
the manufacturers' efforts are directed towards supplementing 
those of the export house. 

Results That May be Expected. — The representation of his 
product having been granted an export house, the manufacturer 
can only await results. The success with which the export house 
meets in placing goods in Latin American countries is naturally 
dependent upon the same principles that govern the sale of mer- 
chandise in the United States; their adaptability to the market, 
the ability to excel competitive lines <5r brands, the activity of 
agents, all are factors to be reckoned with. No manufacturer can 
reasonably expect an immediate return, nor, if the line is intro- 
duced simultaneously in all of the republics, can he expect 
equally good results from all. Local conditions differ so widely 
and there are so many factors that must be taken into considera- 
tion that the manufacturer must not be disappointed at a wide 
variance in results. 

Failure Frequently Due to Multiplicity of Representations. — In- 
their eagerness to do a large volume of business, many export 
houses frequently accept the agency for too many lines. This can 
have but one result. If the branch office, the local agent, or the 
correspondent of the export house is expected to scatter limited 
energies over too wide a field, it is certain that a keen disappoint- 
ment awaits the manufacturer who believes that his interests are 
being properly cared for. In making arrangements with export 
houses, the manufacturer should have a very clear notion of the 
amount of time, energy, and thought that will be given to the 



EXPORT COMMISSION HOUSES AND AGENTS 67 

sale of his product. In the many instances where failure properly 
to introduce desirable goods in fertile fields was due to this cause, 
the manufacturers would have served their interests much better 
had they assured themselves beforehand that due attention would 
be given their products. It would have been infinitely better had 
they analyzed very critically their sales opportunities, and placed 
their representation, if necessary, with a different export house 
for every country. The fact that a certain export house is un-/ 
usually successful in Peru does not prove that it will be equally 
so in Bolivia or the Argentine. The representative in the latter 
republic, by reason of his technical experience, may be much 
better qualified to sell cotton goods than machinery, and it is the / 
duty of the manufacturer to ascertain that fact before it is too late^ 1 
Factors to Consider When Granting Agencies. — 1. In grantin^^ 
an exclusive agency the manufacturer must make sure that his 
line will receive the attention which such an arrangement merits 
and that his product will be properly presented to the trade. The 
grant of an exclusive agency should be made with the utmost cau- 
tion, for out of this have arisen some of the most notorious abuses 
known to the export business. 

2. An exclusive agency should not be granted an export house 
for all of the Latin American republics unless the manufacturer is 
thoroughly convinced that the sales organization in each of the 
republics will be productive of equally good results. It is far bet- 
ter to proceed slowly and, if necessary, distribute the agencies 
according to the ability of the various concerns to market the 
maximum amounts of goods in the several countries. This is in 
direct ratio to the competency of the management and the effi- 
ciency of the sales organization in the field. 

3. Caution Necessary in Granting Exclusive Agency. No exclu— - 
sive agency should be granted to a concern whose reliability or 
responsibility is questionable in even the slightest degree. Many 
business men have been so misled by attractive stationery on 
which exclusive rights were solicited that they failed to observe 
the most ordinary precautions with which a sales arrangement in 
this country is considered. It is impossible to exaggerate the 
importance of making a very careful investigation beforehand 
relative to the financial standing of a concern applying for an 
agency. J]veu where no credit risk is iovolv^d the manufacture? — 



68 EXPORTING TO LATIN AMERICA 

should guard against granting his representation, especially on 
an exclusive agency basis, to a firm that is in disrepute, and which 
would thus, indirectly, vitally affect his own business standing in 
Latin America. 

4. Agencies Obtained for Ulterior Purposes. No exclusive agency 
should be granted unless the manufacturer is convinced that it 
has not been obtained for the purpose of keeping his goods or 
brands out of the market. Applications for exclusive agencies 
coming from the very best firms must always be closely scrutinized 
and subjected to the severest analysis. Many firms who ask for 
such agencies do so merely to protect an agency already handled 
by the same firm on equal if not better conditions than those 
offered by the firm of whom application is made. Innumerable 
instances are on record where exclusive agencies have been obtained 
and after samples have been submitted, even to responsible firms, 
a way was found to kill every possibility for the sale of the new 
product. Such efforts were, of course, in the direction of protect- 
ing lines previously introduced. Had the manufacturer not granted 
exclusive rights, or had he placed his agency with some other 
export house, his goods might have been successfully introduced. 

Cooperation with Export Houses. — If satisfactory replies are 
received from the export houses and definite arrangements are 
made for the representation in one or more countries, the manu- 
facturer should endeavor to cooperate to the fullest degree with 
the export house. 

Mailing of Catalogs. — It should be ascertained how many cata- 
logs are required, not only for the use of branch offices, agents and 
salesmen, but also for distribution to those importers whose busi- 
ness is to be solicited. It must be decided whether the manu- 
facturer shall mail the catalogs to all lists to be furnished him 
by the export house or whether the export house itself will attend 
to the distribution. 

Obtaining Names of Local Agents. — In order to cooperate most 
effectively with the export house an effort should be made to 
obtain the names and location of its branch offices, correspondents, 
or local agents. So much can be done by the manufacturer who 
is earnestly seeking to create a new market for his goods that it 
is of the highest importance that this information be obtained. 
Where an export house will make a sincere effort to introduce a 



EXPORT COMMlSSIOlsr HOUSES AiSTB AGENTS 69 

line, it should not be unwilling to supply this information. If 
a manufacturer has difficulty in obtaining this it should be suf- 
ficient evidence to him of but a half-hearted effort on the part^ 
of the export house. 

Cooperation by Direct Correspondence. — Arrangements should 
be made with export commission houses providing for direct 
correspondence with dealers or importers. The purpose of this 
work would be: (1) To stimulate the efforts of the agents; (2) 
to develop new prospects for branch offices; (3) to second the 
effort of the local agents. This work is very desirable inasmuch 
as contpetition is becoming keener and it is essential to obtain 
a maximunf of results with a minimum of energy and time. 

How Previous Correspondence May be Used. — It happens noF' 
infrequently that the manufacturer has already received orders 
from a territory for which an agency arrangement is made. Such 
orders are probably the results of spasmodic efforts in the past, the 
distribution of catalogs, or the placing of orders in consequence 
of advertisements seen in export journals. Such orders should 
receive the careful scrutiny of the manufacturer, and copies thereof, 
together with copies of previous correspondence, should be sent 
to the local agent of the commission house and to the New York 
office. If the importer who has placed the orders is advised of the 
appointment of a local agent, a largely increased business may be 
expected. The result of cooperative work with exporters and tak- 
ing advantage of every possible lead cannot be overestimated. If 
there is to be correspondence by the dealers direct with the house 
as well as through the agents, copies of all letters that pass between 
the importer and the manufacturer should be sent to the local 
agent. The efforts of the latter can be greatly aided by intensive 
follow-up work on the part of the manufacturer. An agent who 
may be rather indifferent to a certain line can be greatly stimu- 
lated by seeing the efforts which a manufacturer makes in his 
behalf. Too much stress cannot be laid on the importance of 
continuous and consistent cooperation. _ ^ 

Arrang^ements Should Be Scmpulously Observed. — Although all / 
arrangements with export commission houses should be entered 
into very cautiously, once they have been made they should be 
scrupulously observed. One of the most frequent sources of 
complaint on the part of export houses and their correspondents 



% EXPORTING TO LATIN AMERK^A 

has been that American manufacturers, when they have thought 
it to their advantage to ignore such arrangements, have done so 
without hesitation and with no regard whatever for the efforts 
that have been made in their behalf by substantial and honorable 
houses. This abuse takes the form of the manufacturers' filling 
orders received direct from the dealer or importer in Latin Amer- 
ica without notice to the commission house, whose efforts, not infre- 
quently, were the direct cause of the order having been placed. The 
missionary work of its traveling and local agents or branch offices 
often bears fruit months after direct solicitation, this being one 
of the peculiar features of Latin American business. An agree- 
ment covering the sale of goods in a certain specified district 
should not be ignored for the sake of a possible profit on an 
isolated sale, and a liberal, broad-minded policy is by far the 
best. The export commission house should be allowed credit for 
any orders received direct by the manufacturer, and the greatest 
care should be taken that sales made in its territory are properly 
credited to it. In such cases the New York office should be noti- 
fied immediately upon receipt of the order, and notification like- 
wise mailed to the local agent or the branch office or correspondent. 
It can be readily understood that this policy will result in a 
great additional amount of business, and although the manu- 
facturer might seemingly profit by withholding credit to a com- 
mission house, the other more liberal policy would ultimately prove 
the more beneficiaL 

„ How Manufacturers Should Protect Export Commission Houses. 
—The importance of protecting the export commission house can- 
not be exaggerated. Numerous misunderstandings that have 
proven most disastrous to a nicely developing business have arisen 
out of the policy of American manufacturers distributing catalogs 
containing prices and discounts quite at variance with those quoted 
the export house. The honest and conscientious export concerns 
that are trying to serve the best interests of an American manu- 
facturer should not be placed in the embarrassing position of 
confronting quotations received direct by one of its clients from 
the manufacturer which may he entirely different from that war- 
ranted by its agreement. Such methods cannot but reflect dis- 
credit not only upon the individual manufacturer but upon Amer- 
ican business methods generally. 'i^ 



EXPORT COMMISSIO:Nr HOUSES AND AGENTS 71 

How Inquiries Should Be Handled. — When arrangements are 
made with an export house it should be determined just how in- 
quiries for catalogs, prices, and discounts shall be handled. If 
catalogs are mailed, they should contain full information as to 
how the business is to be conducted and whether orders should 
be mailed direct to the manufacturer or to the export commission 
house. An agreement with the export commission house should 
leave no doubt whatever in regard to these points: (1) whether 
the manufacturer shall mail the catalogs and quote prices with 
discounts; (2) Whether such quotations shall be made by the 
export house. "^^^^ 

Objections tt) Export Commission Honses. — Although the many 
desirable advantages offered by export houses have been noted, 
their importance may be exaggerated. As has already been indi- 
cated, export commission houses do not always originate orders, 
and frequently merely execute them after they have been received 
from their clients. The only facility that many export firms 
offer is that of forwarding catalogs to their correspondents, and 
in such cases, particularly where there is no local representative 
on the ground to push business, the results may be very dis- 
appointing. These depend largely, therefore, on the attitude of 
the dealer to whom the catalogs are sent and are even more 
marked where the export house has its own salesmen. Many 
export houses handle such a wide variety of articles that it seems 
an utterly hopeless matter for a representative to form even an 
adequate idea of the goods, their advantages and desirable selling 
features. 

Export Houses Generally Excel in Certain Lines. — The nature 
of the Export business is such that as a rule practically every 
sort of manufactured product that can be sold abroad is handled. 
It can be readily understood why it is most difficult for the 
representative of an export commission house to have a thorough 
knowledge of all the goods that he offers. If such a representative 
is well posted in certain branches of business he will undoubtedly 
meet with far greater success in introducing a new line of mer- 
chandise akin to his specialty than would otherwise be the case. 
The result of this policy is the sale of particular lines of goods 
in certain cities or districts and, frequently, of an entirely different 
sort of merchandise in other cities in the same republic. A mis- 



72 EXPOETING TO LATIN AMEEICA 

understanding of this fact is one of the chief causes of failure in 
\ marketing through the export house. 

Kew York Offices of Foreign Houses. — As a direct outgrowth of 
export commission house connections, there have been established 
in the past few years, principally in New York City, agencies of 
many Latin American firms. In consequence of the growth of 
their business it has been found advantageous by many Latin 
American houses to replace the commission house with their own 
personal representatives. These representatives maintain offices 
and serve their main house in many important directions. They 
buy of American manufacturers orders which they receive from 
headquarters for every conceivable kind of merchandise. By very 
close attention to details and supervision, concessions are frequently 
obtained in the shape of discounts, prices, and profits in general. 
The duties of the resident agent of such houses are similar to 
those of the export commission house. They include not only 
the placing of the orders, but attention to all details of shipping, 
freight, rates, handling and adjusting of claims, and, not infre- 
quently, the payment of bills. 

Licreasing an Established Business Through Export Houses. — 
Many manufacturers transact a certain volume of business through 
export houses. These sales may be confined to certain countries 
or to certain portions of a country, and very often a greater volume 
might easily be done if the right effort were made. The manu- 
facturer who has established such connections with export houses 
should seek by every possible means to increase his business. In 
order to determine the necessary steps to take he should do the 
following : 

1. Ascertain definitely to which countries goods are being 
shipped. 

2. Learn in which sections of the republics the sales are 
largest. 

3. If the product is salable in other countries, ascertain why 
no business is forthcoming from those countries or districts. 

4. Consider the best means of developing prospects by direct 
correspondence which may then be given to the agents of the 
export house for attention. 

5. Confer with the export house and agree upon a plan for 
more effective methods of solicitation. 



EXPORT COMMISSION HOUSES AND AGENTS 73 

6. Arrange to correspond with the export house agents. 

7. If the export house cannot furnish adequate representation 
in all countries or districts, endeavor to make better arrangements 
with other exporters. 



PROBLEMS IN EXPORT HOUSE MANAGEMENT 

Initiation of Orders or "Indents." — So many misconceptions 
prevail regarding the conduct of an export house, its expenses 
and profits, that the following outline will enable the reader to 
gain some idea of the difficulties daily encountered in the transac- 
tion of business with Latin America. The keen competition and 
the necessity for a large volume of business compels vigorous 
solicitation by the export merchant through local agents, by cable, 
by correspondence, or through traveling representatives. While 
many unsolicited orders (or "indents," as they are known to 
English houses) are received, the export merchants (who in many 
instahces operate for their own account virtually as jobbers) are 
compelled to render much service incidental to sales. The number 
of articles sold is usually very large, it being necessary to take 
advantage of every possibility, markets frequently being too re- 
stricted to permit of concentration on a few important items. 
Some of the developments of the export business which are prov- 
ing a source of great expense are the quotations now exacted of 
export merchants by their foreign clients.^ For the purpose of 
retaining the good will of the latter the export merchant must 
watch market changes in order to give prompt cable notice thereof 
to his customers, and must study trade and merchandise possi- 
bilities to be able to offer promptly the most salable merchandise. 
As cabling is very expensive and the cost of correspondence is 
likewise high, this becomes a serious burden. Foreign merchants 
often ask quotations of export houses which the latter are com- 
pelled to supply with no definite prospect of business. As the 
calculations necessary to make such quotations are greatly in- 
volved, requiring the service of technical experts who must be 
employed for this particular purpose, an added expense to the 
export merchant must be considered. 

*See John F. Fowler, in the "American Exporter," 



U EXPORTING TO LATIN AMERICA 

- Extension of Credit. — The export commission merchant must be 
thoroughly familiar with the firms with whom he transacts busi- 
ness. It is not only essential that he know whether there is a 
solid basis for credit, but, of even greater importance, whether 
the drafts which accompany documents are promptly met at ma- 

^ turity by the buyers. In some instances even large firms who ap- 
parently are successful abuse the exporter by not meeting drafts 
promptly, thereby causing serious inconvenience to the shipper 
who has discounted these documents with his banker and who 
may be suddenly called upon to pay drafts which have thus been 
dishonored. The continued failure by an exporter's clients to meet 
such drafts will seriously affect the latter's standing with the con- 
cerns to whom he has sold their paper. The same methods of 

■'Obtaining information regarding foreign clients are followed by 
the export merchants as by manufacturers who deal direct. In 
any event, a heavy demand on the credit facilities of the exporter 
is made by the foreign buyers, particularly those located in Latin 
America. 

Misunderstanding Regarding Terms. — The matter of terms is 
one that frequently occasions the exporter much trouble. The 
reasons therefor can be easily understood by reference to Chapter 
XII. There are many possibilities of either honest or deliberate 
misunderstanding of the terms F.O.B., C.I.F., and C.I.F.&E. Un- 
principled merchants or concerns of good credit, standing who 
are inclined to sharp practice, if to their advantage, deliberately 
misinterpret quotations and not infrequently hold shipments sub- 
ject to order for the purpose of obtaining rebates. This is often 
done in the event that market conditions become unfavorable be- 
tween the time of shipment and arrival at destination. Difficulties 
also arise -as a result of delay in obtaining shipping room or in 
j consequence of delay in the departure of a vessel. 

Delays in Payments. — Export merchants, like manufacturers 
who ship direct, are compelled in certain countries to make ship- 
ments on open account. This applies particularly to Cuba, Porto 
Rico, Mexico, and certain places in Central America. Merchants 
who buy on such conditions, even when a definite time of pay- 
ment has been agreed upon, often fail to make prompt settle- 
ment and the loss of interest by reason of the delay always falls 
to the lot of the exporter who paid for the merchandise before 



f 



1SXP0ET COMMISSION HOUSES AND AGENTS 'J'S 

forwarding it to Latin America. When shipments are made against 
drafts drawn at sight there is also possibility of delay, as im- 
porters insist upon the arrival of the merchandise before accepting 
the draft and the loss of interest thus occasioned must also be 
borne by the exporter. Drafts drawn at a certain number of days 
sight and duly accepted frequently are not paid when they mature, 
because conditions are unfavorable in the matter of exchange or for 
some other reason. The protest of such paper is very expensive and 
ineffective. The payment of drafts may also be refused because 
of errors that have been made by employees of the shipper or of 
the interior manufacturer, and the export merchant is compelled 
to suffer the loss which often cannot be recovered from the original 
shipper who disclaims all responsibility. Such errors occur despite 
the attention of high-salaried employees whom all export houses 
who transact a volume of business must employ. 

SMpping Details. — The importer of Latin America expects the 
export house to obtain the very lowest freight rates and it is the 
duty of the exporter to keep a close watch on ocean rates, which 
are subject to great fluctuations. If any errors occur they are 
quickly detected and charged to the exporter. The matter becomes 
very complex, particularly in the case of consignments in which 
are included many kinds of merchandise subject to varying freight 
rates. In Chapters X and XI is an outline of the require- 
ments for invoices and other shipping documents, all of which 
must be carefully observed and complied with by the export mer- 
chant. The latter's problem is more complex than that of the 
manufacturer who ships direct, as orders frequently call for mer- 
chandise from many different manufacturers whose shipments 
arrive at different times but must all be assembled and for- 
warded together on one bill of lading. The duties of the export 
merchant are particularly onerous when shipments from the in- 
terior are delayed, insomuch as these may retard the forwarding 
of many other items on the same order. If the arrival of such 
delayed shipments is counted upon to take advantage of a steamer^ 
sailing, further trouble is possible. This is due to the fact that 
the time required for the preparation of the many documents is 
limited. This applies not alone to consular papers but to bills of 
lading, commercial invoices, etc. The consuls of foreign countries 
often maintain very short office hours which make it difficult for 



lie EXPORTING TO LATm AMERICA 

the shipper to obtain signatures to the documents in time for the 
proper dispatch of the papers. The consular invoices, which must 
be supplied in original with a varying number of copies, have to 
show metric weights, and the conversion of these from the avoir- 
dupois weights furnished by manufacturers is often a very difficult 
problem, requiring considerable time to insure accuracy. The 
commercial invoice must also be carefully written in order to 
avoid custom house complications, and must be such that the 
Latin American importer may easily understand it and check the 
shipment without difficulty. The bill of lading, which cannot be 
obtained until many requirements of the steamship company have 
been complied with, must often be supplied to the foreign consul 
for his signature. Clearance papers are needed before shipments 
can be dispatched and all of this detail requires considerable time. 
The greatest accuracy is essential, especially in the translation of 
the description and the classification of weights, which must agree 
in all the papers. 

Banking Documents and Their Dispatch. — After all the require- 
ments in reference to the shipment and clearance of the goods 
have been complied with, the preparation of banking documents 
follows. In order to insure the forwarding of these by the same 
steamer which carries the shipment special efforts and very rapid 
work are often required. This is so vital because importers can- 
not obtain possession of shipments that are made against docu- 
ments until the latter have been accepted or paid, and if by any 
chance the necessary shipping papers are delayed, the shipments 
may be placed in storage for several weeks until the papers arrive. 
Some idea of the exertions required to guard against this possi- 
bility may be obtained from the knowledge that steamers often 
carry hundreds of lots from the same export merchant, the docu- 
ments of which have had to be prepared in the manner- outlined 
above. Very often the papers must be sent in the bag of the 
steamship agent, which is the last to be placed on board, having 
been completed too late for the mail. 

Keeping Export Accounts. — It will be realized, from the amount 
of detail required to handle Latin American business properly, 
that much bookkeeping is necessary. This is far more difficult in 
the case of export merchants who are compelled not only to buy 
for the accounts of many customers, but to make against them 



EXPORT COMMISSION HOUSES AND AGENTS 77 

drafts at varying maturities, which documents they sell for the 
purpose of financing the transactions. The account of cartage, 
freight transfer, and other charges, alone is a large one, and the 
calculations of ocean rates on the different classes of merchandise 
shipped is still more serious. The necessity for absolute accuracy 
is emphasized by the complexity of calculations in C.I.F. and 
C.I.F.&E. transactions. If difficulties with customers are to be 
avoided, the calculations, even after a thorough understanding 
of terms, require the greatest care. This is particularly so in 
figuring accounts in which the question of exchange is involved, 
inasmuch as importers frequently seek to compel the exporter to pay 
the exchange and commission. 

Profits of Export Houses. — American manufacturers who have 
no knowledge of the workings of export merchants from whom 
they frequently receive orders for the products, mistakenly imagine 
that the exporter makes very large profits which are denied to the 
manufacturer. In reality, the profits are small considering the haz- 
ards of the export business, the great possibility of error, the tech- 
nical knowledge necessary to conduct it, and the thorough under- 
standing of the business methods and conditions in Latin American 
republics. The most successful export merchants today depend 
for their profits largely upon the volume of business they transact 
and grant to their clients all discounts which are received from 
manufacturers. The charge for service in placing the orders, 
financing the accounts, and dispatching the merchandise varies. 
On goods that are very bulky it is as low as 1 per cent, and some- 
times less; where the merchandise is staple it is 2i^ per cent.; 
and in ordinary mixed lines it is 5 per cent. The interest charged 
by the exporter to the buyer of Latin America is 6 per cent., and 
this is very much lower than the rate which the latter would have 
to pay to local banks. When an export house undertakes the 
introduction of an American product special arrangements for a 
selling commission are made, but even in such instances the manu- 
facturer would find that direct representation in the Latin Ameri- \ 
can markets would be far more costly than transactions through ' 
the export merchants. 

Cooperation Between Export Houses and Manufacturers. — In / 
considering the service which export houses have rendered W 
American manufacturers and the fact that because of the service 



n EXPORTING TO LATIN AMEEICA 

they render to buyers they will continue to be an important factor 
in the Latin American trade, the need for cooperation and a better 
understanding is evident. The alert manufacturer will take ad- 
vantage of every possible means to market his product and much 
can be accomplished by proper cooperation with export merchants. 
The latter should always be taken into consideration in a selling 
campaign, inasmuch as it is almost certain that many buyers in 
Latin America who may be interested in American products would 
prefer to buy from an export house rather than direct. For this 
reason, their position in export trade should be thoroughly under- 
, stood, and instead of being a detriment they can be made, if the 
Cwork is intelligently planned, a valuable addition to sales efforts. 

What the Export Agent Is. — With the development of the 
export trade has come the establishment of manufacturers' export 
agents. Like the export houses, they are located in the seaboard 
cities, and act as the representatives of manufacturers. They 
sometimes likewise assume the duties of the representatives of 
foreign dealers. 

Duties of the Export Agent. — The principal duty of the export 
agent is to act as a salesman. It is his business to keep in 
touch with and visit the export commission houses to obtain such 
orders as may be placed by the export commission house for the 
goods of which they control the sale. They likewise distribute 
the literature of manufacturers, such as circulars and catalogs, 
in addition to samples, where it is practical to do so. By these 
means they serve to further the interests of the manufacturer with 
the export house as they can create for the manufacturer a greater 
demand for his goods. Manufacturers' export agents, where they 
act as correspondents of Latin American houses, also execute orders 
for such American products as may be received from the Latin 
American correspondents, usually large importing firms. 

The export agent can likewise confer with visiting merchants 
from Latin America who may happen to be in New York. He 
may display for the benefit of those interested such samples as the 
manufacturer may desire to show. He may also attend to 
correspondence with the Latin American dealers, should the Amer- 
ican manufacturer prefer to have his business done in that way. 

Other Functions of the Export Agent. — In addition to the duties 
outlined in the preceding paragraphs^ it falls tp th^ lot of the 



EXPORT COMMISSION HOUSES AND AGENTS 79 

export agent to prepare papers covering the shipment of goods 
exported to Latin America. This is a very important work re- 
quiring the utmost competency and a thorough knowledge of local 
conditions throughout Latin America. The customs laws are dif- 
ferent in each republic, and the regulations of custom house officers 
differ so widely that an expert in the preparation of shipping docu- 
ments can frequently effect very important savings. Another 
detail to which the agent can give his attention is the forwarding 
of goods, making arrangements for the carrying of the merchandise 
by the steamship lines, combining shipments under one bill of 
lading, placing the insurance, etc. 

Why Manufacturers' Agents Handle Various Goods. — The very 
nature of the work of an export agent makes for great familiarity 
with many classes of merchandise. By reason of his daily visits 
to export commission houses, he is in such touch with the export 
situation that opportunities of obtaining business for many differ- 
ent lines of goods constantly present themselves to him. After the 
agent has succeeded in placing with the various commission houses 
the products of the manufacturer he represents, it is his duty to 
keep in touch with and endeavor to secure the cooperation of export 
house correspondents and agents, for the purpose of increasing 
the sales. Because of the wide range of merchandise handled 
by the export houses, the manufacturer's agent is able to secure 
business for many distinct lines. His success is in direct ratio to 
his knowledge of conditions and the energy with which he pushes 
the sale of the products he represents. 

The Payment of an Export Agent. — A manufacturer who has 
not engaged the service of an export agent is naturally desirous" 
of knowing what salary or remuneration is expected by an agent. 
This depends upon many conditions but is based on the volume of 
business done and his service to the manufacturer in the matter 
of forwarding goods, etc. An agent who represents a number of 
firms can naturally make his charges to each much smaller than 
if he were representing one concern exclusively. Many of the 
most successful arrangements have been made on a basis of part 
salary and part commission. 

How to Obtain a Good Export Agent. — The rules that have been 
cited for opening correspondence with an export commission house 
apply with equal force to the engaging of an export agent. The 



80 EXPORTING TO LATIN AMERICA 

first step is the obtaining of a list of the names. Such a list is 
available in the directories. References should invariably be re- 
quired and full infoimation exacted in regard to the duties per- 
formed by the export agent. A very effective means that is fre- 
quently employed to obtain an export agent is the insertion of 
appropriate advertisements in the Want columns of New York 
newspapers. The "Export Trade Directory" may also be consulted. 

Manufacturers' Cooperation with Export Agents. — After ar- 
rangements have been made by the manufacturer with the export 
agent, he should endeavor to obtain the fullest value in the way 
of service. The export agent should be supplied with catalogs, 
circulars, and price lists. He should be asked to inform the 
manufacturer of the very best means of furthering his business, 
and suggestions made by him should be studied very carefully. 
Cooperation should be the watchword with the export agent as 
with the export house. 

Questions to be Asked Applicants. — In order that no mistake 
may be made in granting an export agency, the manufacturer 
should invariably insist upon the fullest knowledge regarding the 
character, ability, and responsibility of the agent. In addition, 
he should be requested to 'state what goods he is handling, how 
long he has been handling them, in what countries his principal 
correspondents are located and for what fields he offers the great- 
est sales possibilities. 



CHAPTER VI 
TRAVELINa SALESMEN. GENERAL AND LOCAL AGENTS 

TRAVELING SALESMEN 

Advantages of Personal Representation. — ^The most effective 
means of obtaining business in Latin America is through travel- 
ing salesmen. This is recommended by all American Consular 
Officers, trade investigators, Chambers of Commerce, and by firms 
who have been most successful in establishing a trade in Latin 
America. Notwithstanding the oft-repeated advice, many thou- 
sands of dollars are annually wasted upon useless catalogs and 
misdirected campaigns by mail. The fact that Latin American 
business men are known to be conservative makes it even more essen- 
tial that an effort to establish permanent business in the southern 
republics should be based on direct representation. A traveling 
representative should have a thorough knowledge of the products 
that he means to sell, a willingness to conform to the customs of 
the people in the countries that he will visit, and he should have, 
if possible, a knowledge of their language. The advantages of 
proper representation are obvious. The representative may not 
only effect actual sales, but may serve as an investigator for the 
purpose of obtaining all facts in regard to distribution of an article, 
its prospects for future sale, foreign competition, and peculiar local 
trade conditions. He can also make adjustment of claims that 
may arise, appoint local or general agents, outline territories, and / 
obtain for the manufacturer the good will of the dealers whom ( 
he visits. 

Difficulties of Direct Representation. — The problem of creating 
an effective sales organization for the domestic market is intensi- 
fied in the case of the Latin American trade. This is due to the 
following causes: 

1. The difficulty of obtaining reliable, experienced or com- 
petent men. 

81 



8g EXPORTmo TO LATIN AMERICA 

2. The vast extent of the Latin American territory tx) be 
covered. 

3. The high expense of traveling in the Latin American re- 
publics. 

4. The time required to place the business on a remunerative 
basis. 

5. The lack of knowledge of the average business man relative 
to the best trade field for his particular product. 

6. The time and expense required to train applicants for posi- 
tions as salesmen. Notwithstanding the drawbacks outlined, it 
will still be conceded that the most practical and successful way 
of building business with the southern countries is to send trained 
men, possessing both a knowledge of the goods that they are selling 
and an acquaintance with the customs and life of the Latin Amer- 
ican people. There is no other means which can establish so 
quickly the business of a manufacturer on a paying basis, as 
the traveling salesman. 

Necessary Qualifications. — The merchant who seeks to extend 
his business should carefully weigh the qualifications of the men 
whom he contemplates sending as his representatives. In this 
instance, again, his best interesfs will be served by delaying until 
he can obtain an efficient man in preference to sending the first 
applicant in too great haste to obtain results. Following are the 
qualifications which should be insisted upon by the merchant de- 
siring to serve his best ends: 

1. Absolute Dependability. It is very important that the manu- 
facturer satisfy himself in advance of the absolute reliability of 
the representative since so much more is expected of him than 
would be the case in the United States. Innumerable instances 
are on record where this has not been done, and as a consequence 
excellent prospects which the manufacturer may have had were 
ruined. Samples should never be sent merely upon request, and no 
money should ever be advanced unless the applicant demonstrates 
his reliability. The greatest care should be taken to insure strict 
sobriety. 

2. Adaptability. He must be able readily to adapt himself to 
the very different conditions in the countries he is to visit. Many 
otherwise competent men have proved failures because of their 
unwillingness to recognize this and their inability to transact 



TEAVELING SALESMEN 83 

business in the very different way in which it is carried on by 
the Latin Americans. 

3. Thorough Knowledge of the Product Sold. No man should 
be sent to Latin America who does not possess a thorough under- 
standing of the articles he is to sell. Latin American merchants 
are very keen traders, and expect the man who wishes to sell them 
goods to know all about the products that he may explain them 
thoroughly. An inability to do so results disastrously for the 
manufacturer. 

4. He Should Speak Spanish and Portuguese. The advantages 
of a knowledge of languages are obvious. An effort should be 
made by the manufacturer to obtain a man who has at least some 
knowledge of Spanish and, if business in Brazil is contemplated, 
of Portuguese. The Latin Americans consider it a compliment to 
be addressed in their own tongues and it is far easier to obtain 
and hold their attention when they are spoken to in Spanish, or 
Portuguese, as the case may be. An ability to use their language, 
combined with expert knowledge of the product sold, is almost 
certain to result profitably. However, a failure to speak the 
languages need not preclude success if the representative possesses 
the other qualities mentioned, which are indispensable. 

How to Obtain RepresentativeSw — It is an admitted fact that the 
difficulty of obtaining reliable men for the Latin American field 
is very serious. The remuneration expected by experienced men 
is high, and the average American manufacturer does not feel 
justified, particularly in the first stages of his export experience, 
in incurring such a hea^7■ expense. Nevertheless, it is possible 
to obtain competent men at moderate cost and with the increase 
in Latin American trade it will become less and less difficulty 
Some of the means are as follows: j 

1. Advertising 'in New York newspapers. 

2. Advertising in Latin American local papers. 

3. Correspondence with commercial organizations. 

4. Cooperation of export and trade journals. 

5. Correspondence with banks or commercial houses in Latin 
America. 

6. American consuls. 

7. Training the representative. 

8. Correspondence with universities. 



84 EXPORTING TO LATIN AMERICA 

9. Watching the trade opportunities column in "Daily Com- 
merce Reports/' and similar departments of trade, technical, and 
export journals. 

• 1. Advertising in New York Newspapers. By reason of its 
large population and its enormous export business New York City 
attracts a great number of men competent to act as representatives. 
Advertisements placed in one or more of its principal papers are 
usually productive of results. An advertisement should state in 
detail the exact requirements of the manufacturer and the territory 
it is desired to cover ; the applicant should be requested to state his 
experience and reference should be exacted. The latter requisite 
cannot be too strongly insisted upon, as great losses have resulted to 
exporters who have shown too great an eagerness to accept without 
investigation the claims of applicants for positions as travelers in 
Latin America. 

2. The Use of Latin American Local Papers. Another method 
which has been found very successful by American manufacturers 
has been the use of the principal dailies in the large Latin Amer- 
ican cities. This means is especially useful where it is desired 
to obtain representatives for a local market. It has its advan- 
tages in that the manufacturer can reach a much larger number 
of prospective agents than in any other way, and it can be espe- 
cially recommended where definite arrangements can be made by 
correspondence. A list of the principal papers in Latin America 
with their advertising rates may be found in the Appendix. 
Letters to these newspapers may be written in Spanish or English, 
and the cost of the advertisements may be covered by international 
post office money order or New York bank draft. 

How an Advertisement Should he Worded. In order to save- 
time it is recommended that a form containing all necessary ques- 
tions be sent to every applicant for a position. This form, for 
the purpose of economy, should be in both English and Spanish. 

3. Correspondence with Commercial Organizations. The de- 
velopment of Latin American trade is, in a large measure, due 
to organizations which have rendered valuable service to the 
exporter. Among these may be mentioned the National Association 
of Manufacturers, New York City, and the Philadelphia Com- 
mercial Museum, Philadelphia. The bulletins of these organiza- 
tions contain announcements of dealers in Latin America who 



TRAVELllSra SALESMEN 85 

wish to represent American manufacturers. The efforts of these 
organizations are supplemented by their representatives in the 
principal Latin American cities. An example of this class of 
organization is the Chicago Association of Commerce whose repre- 
sentatives did very successful work in Buenos Aires until the 
office was taken over by the American commercial attache. The 
United States Government also lends its aid through its commer- 
cial agents in the principal American cities. In the "Daily Com- 
merce Eeports'^ frequently appear inquiries from foreigners who 
wish to act as representatives of American concerns. 

4. Cooperation of Export and Trade Journals. Many export 
and trade Journals receive letters from individuals and firms in 
Latin America who desire to represent American firms. Such 
applications are referred to interested manufacturers and are 
usually made a part of the service rendered in connection with 
advertisements. 

5. Correspondence with Banks and Commercial Houses in Latin 
America. Letters in whicbthe requirements are specified addressed 
to banks and important commercial houses are often productive 
of results. Such letters should invariably be accompanied by 
international post office coupon for reply. 

6. Aid of American Consuls. American Consuls are often re- 
quested by natives or foreign residents in their districts to obtain 
agencies for American manufactures. By addressing consuls and 
stating in detail the requirements, valuable connections are often 
made. 

^ 7. Training the Representative. Owing to the difficulty of ob- 
taining reliable representatives in the Latin American fields, many 
American manufacturers have adopted the custom of educating 
men in their own establishments for the purpose of sending them 
to Latin American countries. In this they are wisely following 
the example of the German manufacturer who is famous for his 
thoroughness and attention to detail. This method may be highly 
recommended, and the best type for the purpose is an ambitious 
young man who possesses a good character, adaptability and an easy 
suave manner. 

How to Train a Representative. Having selected a man, he 
should be urged to equip himself as quickly as possible. He may 
do this while being trained in the business, its technical details, etc.\ 



66 fiXPOETlNG TO LATIN AMfiEICA 

Thoroughness should be absolutely insisted upon, as a lack of 
attention* to detail has been frequently complained of by export 
houses of New York as one of the greatest deficiencies of Amer- 
ican business. A brief course of study that may prove valuable 
is as follows : 

(a) Languages. Spanish and, if Brazil is to be visited, Portu- 
guese. In almost every city there are native teachers who can 
give such instruction. The intelligent student with the aid of 
grammars and readers will be able to obtain at least suflicient 
acquaintance with the language that he may make himself under- 
stood. The best grammars, readers, etc., are listed on page 470. 

(b) Geography. This is a study about which Americans, as a 
class, are woefully ignorant. Approached from the commercial 
standpoint it becomes fascinating. A thorough study should be 
made of the geography of the region it is intended to visit and 
of its waterways, ports, cities, and means of communication. Some 
excellent books on this topic are listed on page 473. 

(c) Books. The best books available which deal with the coun- 
tries and their inhabitants should be read. A knowledge of the 
history and literature of the Latin American people will prove of 
great value. An ability to refer to such topics in conversation 
will aid in quickly establishing intimate relations with the Latin 
American buyer and will be helpful. A list of the best books deal- 
ing with the various countries is found in the Appendix on 
page 474. 

(d) Reports on Trade Possibilities. All available reports re- 
garding the products whose sale in Latin America will be under- 
taken by the representative should be carefully studied. These 
reports are referred to in the Appendix and will be found very 
helpful in acquainting the prospective traveler with conditions 
which vary widely in the different countries. 

8. Correspondence With Universities. An increasing number 
of universities and schools are adding courses of training in Latin 
American affairs or include in their courses of Economics and Busi- 
ness Administration, lectures on Commerce with Latin America. 

From these institutions may be obtained the names of young men 
who wish to travel in the Southern Republics. 

9. "Trade Opportunities' Columns. In the "Commerce Re- 
ports" and in pamphlets and bulletins issued by many trade organi- 



TRAVELING SALESMEN 87 

zations are found applications of individuals in Latin America who 
wish to represent American houses. 

Before the departure of the traveling representative the head 
of the firm should make certain that his representative possesses 
a thorough knowledge of his products and all the conditions sur- 
rounding their manufacture, that he may be able to answer intelli- 
gently all questions put to him by the alert Latin American dealer. 
This knowledge should be so complete that he will not be at a loss 
for intelligent answers when serious problems arise. All ques- 
tions relative to terms should be settled, the sales methods to be 
employed and a definite business policy should be determined upon. 
IJnless the manufacturer feels that his representative is capable of 
being in reality his personal representative, he should not be 
allowed to depart. This is strongly emphasized because of the 
general lack of thoroughness of American business men. 

Knowledge of Business Previously Done. — It will be found in- ^ 

valuable to supply a salesman with all details regarding the busi- \ 
ness previously done in the Latin American territory about to be 
visited. This should be given him whether the sales have been 
made direct or through export commission houses. By using this 
information a salesman can make more rapid progress than other- 
wise. Being thoroughly acquainted with the facts, he is in posi- 
tion to render more valuable and intelligent service. If the product 
is machinery or a mechanical device of any sort the representative 
should have a thorough knowledge of its working in order that 
he may demonstrate it in operation. Sales have frequently been 
made simply because the representative knew how to demonstrate 
the advantages and benefits of his machinery, and many instances 
are on record where the loss of sales was due solely to the repre- . 
sentative's failure to inform himself thoroughly about parts of a \ 
machine and their operation. 

The Value of Letters of Introduction. — The importance of 
carrying letters of introduction cannot be exaggerated. They are I 
of extraordinary use in enabling the representative more quickly/ 
to establish friendly relations with buyers. Friendship plays such/ 
an important part in the life of the Latin American dealer that 
any means which can be taken to bring about intimacy mort 
quickly should be adopted. Letters of introduction should b( 
addressed as follows; 



88 EXPORTING TO LATIN AMERICA 

1. To Leading Merchants. Letters to leading merchants who 
sell the product it is desired to introduce should be signed by the 
head of the Company. 

2. To Prominent Banhs. Their names may be obtained either 
from the bank with whom the Company does business and who 
has correspondents in the Latin American countries or from the 
New York correspondents of the manufacturer's bank, who are 
sure to have these connections. 

3. To American Consuls. A general circular letter of intro- 
duction to the Consuls may be obtained through the local repre- 
sentative in Congress. The representative should use this letter 
immediately upon arrival and before attempting to do business. 
In the event that specific aid is desired of a Consul a special letter 
of introduction should be addressed to that official. Consuls are 
often called upon to sponsor American travelers and embarrass- 
ment may result for lack of proper credentials. 

4. Miscellaneous Letters. These may be obtained from houses, 
who already have an established business, to their agents or repre- 
sentatives in the different Latin American countries. A repre- 
sentative who carries such letters will find them of great value 
in obtaining recognition, particularly on the part of the larger 
importing firms, many of which do a vast business, and whom 
it is correspondingly more difficult to interest on account of 
already established relations. 

5. General Letter of Introduction. This should be addressed, 
"To whom it may concern," and should ask consideration for the 
traveler. 

Letter of Authority. — Traveling salesmen in Latin America fre- 
quently find it desirable to show unmistakable authority for certain 
procedure. A simple letter setting forth the authority of the" 
representative may prove highly valuable in a crisis. When the 
representative is given power to make collections or merely to 
take orders, the authority should be specifically defined. In order 
to make such instructions valid, the signature of the manufacturer 
who grants it should be certified by a notary public whose authority 
in turn is- acknowledged by the circuit clerk, the governor of the 
state, and the secretary of the United States, each in their turn, 
and by the diplomatic representative of the country in which it is 
to be used. 



TEAVELING SALESMEN 89 

Credentials of Business Organizations. — Too many letters cannot 
be obtained. Among useful letters is a communication on the 
stationery of the local board of trade, bearing the official seal and 
signature of its officers. 

The Value of a Passport. — Although a passport is not essential, 
it may occasionally be found of value as a means of identification. 
As it is not difficult to obtain, every traveler should provide him- 
self with one. It may be obtained by addressing a letter to the 
Department of State, Washington, D. C. The cost is $1.00. 

The Value of Advance letters. — The sending of letters in ad- 
vance of a salesman is very important. Particularly is this so in 
the case of a concern making its first attempt to secure Latin 
American trade. The letters should be properly couched, and 
may be accompanied by dignified advertising matter. This mat- 
ter should be of the nature to inspire confidence in the manufac- 
turer's products and his ability to furnish what is required by the 
Latin American. Advance letters should be carefully timed in 
order that they may not reach the recipient too far in advance 
of the representative's visit. These should be sent only to such 
dealers as will presumably offer a good field for his efforts. Great 
care should be taken not to address letters to dealers who may 
prove unworthy, inasmuch as this results in needless expense. 
The reasons for this are fully outlined in Chapter XVI. _ 

Preliminary Advertising Campaigns. — If a satisfactory list of / 
dealers is available or can be compiled before the salesman's de- ' 
parture, a preliminary publicity campaign will prove of great 
value. This should consist of a series of letters and mailing pieces 
to pave the way for the representative. An intensive distribution 
of such advertising matter is far more effective than indiscrimi- 
nate mailing to names that are taken from lists without investiga- 
tion. If this work is properly done, it will greatly increase the 
effectiveness of the salesman's introductory work and result in a / 
larger percentage of business than without such a campaign. 

The Development of Prospects for Salesmen. — It has been the 
experience of many successful concerns who have established busi- 
ness relations with Latin America that it was preferable to do 
some business by mail first, and to develop as large a number of 
prospects as possible before the actual sending of the representa-' 
tive. The reasons for this were twofold: (1) it afforded a 



90 EXPORTING TO LATINT AMEEICA 

knowledge of the goods most in demand; and (2) it enabled the 
representative to economize time and expense in effecting sales 
after he arrived in the field, as he was able to devote his energies 
to those who had shown an interest in the products. In every 
case the salesman should be supplied with copies of the important 
letters that have passed between the buyer and the exporter and 
of the orders that have been filled. Scrupulous attention to such 
details will result in great saving. 

What a Salesman Should Carry. — As traveling in Latin America 
is expensive, care should be exercised that useless material be 
omitted. There are certain requisites which must invariably be 
carried. These are : 

1. Stationery, It will be found highly desirable to carry sta- 
tionery which is dignified and representative of the firm. If much 
correspondence is to be done, the paper used should be of light 
weight in order that the cost of postage may be reduced, as this 
is five cents for one-half ounce. In order to avoid waste only 
limited amounts should be carried, and new quantities should be 
mailed from time to time. 

2. Advertising Matter, Catalogs, Etc. These should contain in- 
formation regarding the products, the prices, discounts and terms. 
The number carried should be limited and only such quantities 
taken that they may remain clean until distributed, and until other 
supplies can be received at various points according to schedule. 

3. List of Dealers. The representative should be supplied with 
a list of dealers in the places that he is to visit. These lists 
should be compiled with most extreme care as outlined in Chapter 
XVI. Under no circumstances should there be omitted the names 
of dealers with whom business has already been done. 

4. Schedule of Mailing Points. A schedule of the places to be 
visited should be compiled with infinite care in order to insure the 
receipt by the representative of all mail and parcels. This is of 
extreme importance, inasmuch as the failure to receive remittances 
on which dependence is placed may result in embarrassment. The 
loss of valuable information regarding prospective customers would 
also prove detrimental. In preparing this schedule, care should 
be taken to allow for unexpected delays in the arrival and de- 
parture of vessels on their itineraries. Information regarding 
the dispatching of mails may be obtained from the Post Office 



TRAVELING SALESMM 01 

Department at Washington and New York, although upon applica- 
tion to the local post office, postal schedules and mailings to Latin 
American countries may also be obtained. 

5. The Importance of Carrying a Cable and Telegraph Code. As 
time is an important factor in the relations between the United 
States and Latin America, a code to reduce the cost of communica- 
tion will be found invaluable. This may prove especially useful in 
revising the schedule of mailing points because of unexpected de- 
velopments while the representative is in the field. There are 
a number of codes suitable for the purpose, and one or more of 
them should be carried. Once a code has been determined upon 
it will be found valuable to print on the stationery of the concern 
the fact that it is used, in order to enable the dealers in Latin 
America to communicate easily with the exporter. 

6. The Importance of Carrying Sufficient Funds. Because of the 
danger of nonarrival of mails or delay in the transmission of let- 
ters, a salesman should carry funds or documents which 
will make it possible for him to keep supplied with necessary 
money. A niggardly policy on the part of the exporter may result 
disastrously. Not only does it prove extremely embarrassing to a 
representative in a foreign country (particularly on the first trip 
when his relations are in formation) to find himself short of funds, 
but it reflects greatly upon the character and standing of the house 
that he represents, to have the salesman forced to apply to mer- 
chants for loans, and it is also inadvisable to incur the expense 
of cable messages relative to remittances. Unless the exporter is 
willing to expend a certain sum of money for a given time and to 
see his representative safely through, no matter what the results, 
the attempt should not be made in the first place. 

Methods of Carrying; Money. — 1. Letters of Credit. Everywhere 
ill Latin America letters of credit on New York are accepted and 
cashed without question. In the past, in certain of the republics, 
notably Chile, Peru, Bolivia, and Ecuador, it has been preferable 
to use letters of credit in pounds sterling on London, because 
thereby the loss in making the exchange was less on account of 
the circulation of the pound sterling, which in many countries 
of Latin America is legal tender. 

2. New York Bank Drafts. These are almost invariably ac- 
cepted at par by banks in Latin America and only a slight charge 



0^ EXPORTma TO latin America 

for the service is made. In consequence of the European War, 
conditions changed to such an extent that drafts upon New York 
are in demand and, in many places, at a premium. In many in- 
stances the charge is waived. Before cashing drafts the traveler 
should visit several banks and business houses in order to obtain the 
most favorable rate. 

3. Express Money Orders. These have been found very con- 
venient, especially when carried in small denominations. 

4. United States Gold and British Sovereigns. This money 
may also be used, but the disadvantages of carrying any quan- 
tity thereof are obvious. It is, however, well to be supplied 
therewith. 

The Difference in Moneys. — The careful traveler will bear in 
mind the difference in the various moneys of Latin America. In 
traveling from one republic to another, care should be exercised 
to make the exchange of American money into the currency of 
the country, so as to have as little surplus as possible at the time 
of departure. This will insure against losses in the exchange of the 
currency of one country for that of another, and is especially 
important because of the wide fluctuations in the currency of cer- 
tain of the republics. 

Proper Sample Trunks Important. — The proper kind of trunks 
to be used in traveling in Latin America should be carefully con- 
sidered by the manufacturer or exporter. The conditions of travel 
vary so widely, and such rough handling is received, that the con- 
struction of the trunk is of extreme importance. It must be built 
with a consideration not only of its weight, but also of the usage 
to which it will be subjected. On many railroad and steamship 
lines a charge is made for each pound of baggage or for a weight 
beyond a certain very low maximum. It is subjected to handling 
in all sorts of weather, ranging from heavy tropical rain storms 
to the snows of the mountain plateaus, and from lighterage on 
leaky tugs to the vicissitudes of muleback transportation through 
streams and on narrow mountain trails. 

The Chaxacter of Trunks. — If a salesman is to visit only large 
cities accessible by the most modern steamships with all the highly 
developed equipment for handling freight, such as Rio de Janeiro, 
Buenos Aires, or Montevideo, it matters little what may be the 
character of his baggage. In striking contrast to these cities are 



TRAVELING SALESMEN 93 

the remote places in the interior of Colombia, Bolivia, Chile, or 
Mexico. To reach them it is necessary to resort to the most 
primitive sort of transportation, such as oxcart and muleback. Un- 
less this is considered, delay and loss may result. The extreme 
weight which a mule is accustomed to carry is about 70 kilos or 150 
pounds on either side — a total of 300 pounds. One large trunk 
weighing 300 pounds could not be transported. On the other 
hand, if this weight could be divided into two trunks, evenly bal- 
anced, it would be an easy matter to handle them. The size should 
permit the placing of trunks on muleback in a handy way. 

Other Factors to be Considered. — In the remote places where 
transportation facilities are poor, or in more highly developed ports 
where there are open roadsteads only and no docking facilities, 
trunks are subject to damage. Especially is this so when they 
must be lowered into a lighter, if, by mischance, they are precipi- 
tated into the sea instead of into the lighter. The carriage on 
the backs of laborers from the lighter to the shore is also involved, 
and if a trunk is not properly adjusted, it may slip into the water 
with a consequent damage to contents. As railroad rates in many 
places are extremely high, care should be taken to have the trunk 
of the lightest weight possible consistent with strength and dura- 
bility. 

Packing, Listing, and Weighing Contents,. — To expedite clear- 
ance by custom house officials in ports of entry, it is desirable thai 
the contents of trunks should be carefully packed and listed. This 
is essential because a bond can be given for entry of samples, and 
the requirements of officials in this respect are extremely strict. 
The fact that a list is carefully prepared, with gross, tare, and net 
weights given, will often inspire such confidence that the giving 
of bond can be greatly expedited. The requirements in weighing, 
listing, and packing are as follows: 

1. Weight of trunk alone. 

2. Weight of the loose compartments or shelves and containers. 

3. Weight of trunk and containers. 

4. Weight of samples contained in trunk. 

5. A list of contents under different headings. 
If vacant spaces are filled with waste paper or other material^7 

r weight of same should be specified. All articles should be care- 
fully wrapped, and, if possible, placed inside waterproof ma^ 



94 EXPORTING TO LATm AMERICA 

terial. Nothing should be packed loose. A list of all items in the 
trunk should be carried, with the names of articles in both Eng- 
jlish and Spanish, and if the traveler is going to Brazil, Portuguese 
(sliould be used. 

The Importance of Proper Clothing. — In Latin America, appear- 
"Iffi'ces are quite as important a factor in business as in the United 
States. In this respect the American salesman should be extremely 
careful and most considerate of the opinions of his prospective 
customers. Extreme fashions should be avoided. On the other 
hand, the importance of wearing clothes of an excellent quality, 
dignified and appropriate, cannot be too strongly urged. The trav- 
eler who wishes to enter fully into the lives of the people should. 
be supplied with clothes for various occasions, and as social func- 
tions play an important part in the life of the Latin American, 
evening dress is indispensable. The wise traveler will not permit 
himself to be embarrassed because of lack of proper wearing 
apparel. 

The Kind of Clothing in General. — Naturally, the weight, color, 
and texture of the clothing, because of the great difference in cli- 
mates and altitudes, vary considerably. In planning a trip it is 
essential to consider the time of the year in which the visit is to 
be made, climatic conditions at the time of the visit, the altitude, 
etc. Clothing suitable to be worn in Guayaquil, Ecuador, in De- 
cember, because of the great heat always prevailing there, will be 
found impossible in Punta Arenas, Chile, in July, when heavy 
snows are falling and when it is midwinter in those regions. The 
rigorous conditions then prevailing make heavy clothing, over- 
coats, etc., absolutely necessary. The traveler must also be pre- 
pared, although traveling within the same country at the same 
period of the year, for great changes; as an instance, white linen 
or duck suits may be worn in Barranquilla, Colombia, but after 
a few days in the interior via the River Magdalena, when the 
journey to the upland regions of the capital, Bogota, is com- 
menced, ordinary clothing will be found more comfortable, and 
in the mountains, particularly at night, overcoats and heavy under- 
wear are essential. Provision should be made for these changes 
before a salesman leaves on his trip, as most wearing apparel is 
more expensive in Latin America than at home. 

Tbe Expense of a Traveler in Latin America, — ^Expenses are an 



TRAVELIKa SALESMEN" 95 

important factor in considering the sending of a representative 
to Latin America. In almost all countries they are high, particu- 
larly if accommodations are taken in the better hotels to which 
salesmen should invariably go to maintain the dignity of their 
house. A brief outline of the principal expenses is as follows : 

1. Hotels and Sample Rooms. These are almost always high. 
The average rate in Argentina, Brazil, and Uruguay for sample 
room, bedchamber and meals, is $10jto_$15^er day. In Ecuador, 
Colombia, Chile, and Peru the same accommodations cost about 
$8 per day. In Mexico, Central America, and Cuba the rates are 
lower but vary according to the size of the town and the character 
of the hotel. The average is $5 to $9. 

2. Special Expenses. In many places, because of conditions, bot- 
tled water must be drunk as the local water is unhealthful. This 
costs 50c to $1 per day. Baths usually are charged for extra 
and cost from 20c to 50c each. 

3. Transfer and Bus Charges. The cost of transportation of 
trunks and luggage usually is higher than in the United States. 
The bus or carriage rates vary, occasionally being lower than in 
this country but more frequently higher. 

4. Landing Charges. In many ports where dock facilities are 
lacking, and particularly in the case of open roadsteads, the 
traveler is mulcted unless familiar with the practices of the boat- 
men who often charge extremely high rates for carrying passengers 
from steamer to shore. 

5. Clearance of Samples. It is necessary, when samples are 
carried into one country from another, to arrange for their passage 
through the custom house. Although the experienced traveler may 
be able personally to dispatch them, it will be found advantageous, 
when a considerable number of samples are carried, to arrange 
the matter through a custom house broker. The charges vary in 
proportion to the amount of baggage but must be considered in the 
expenses. The giving of tips to expedite the clearance of trunks is 
a legitimate expense. 

6. Railways and River Steamship Fares. In the South Amer- 
ican countries the rates are almost invariably higher than in the 
United States, and in some countries are as much as five or six 
cents per mile. On river steamers the rates are generally loip 
or not excessive, except in the case of shart distances. Extafe 



96 EXPORTING TO LATIN AMERICA 

charges may be incurred by the purchase of special food, water and 
other supplies. 

7. Ocean SteamsJdp Rates. In the main, rates are excessive, 
especially on the west coast of central South America, and in par- 
ticular for the short run between ports. When possible, tickets 
should be bought through or for round trips, as these rates are 
lower. 

8. Excess Baggage. On the railways and on steamships par- 
ticularly, in South America, the rates are excessive. In some 
instances no excess baggage whatever is allowed and generally 
there is a very low maximum. Because of this the question 
of baggage should be carefully considered before a salesman's 
departure. 

9. Traveler's Taxes. In many places in Latin America, taxes 
are still collected of travelers before they are allowed to transact 
any business. Various means are resorted to in order to avoid their 
pajnnent and in some places the charges are compromised by the 
official in charge of the collection. Information in regard to this 
subject may be obtained on page 534, relating to the taxes charged 
in the various countries. 

10. A Salesman s Daily Expense. The average daily expense 
of a salesman while traveling may be calculated at not less than 
$10 per day, provided the salesman is careful in his expenditures. 
An average more likely to be representative is $12 to $15 per day, 
but when numerous trunks of samples are carried the expenses may 
reach $20 daily. They are certain to be higher in the case of an 
inexperienced man. 

11. Expenses for Entertainment. The nature of business in 
Latin America makes essential a certain sum for entertainment. 
To a far greater extent than in the United States the entertain- 
ment of customers and prospective buyers is conducive to business, 
while the custom of offering cigarettes and of taking refreshments 
is almost universal. This, therefore, may be considered a perfectly 
proper expense item which is incurred by the salesman in the dis- 
charge of his duties. 

In Whose Care Mail May Be Sent. — Whenever possible, mail 
should be addressed in care of a reliable importer, or, for lack 
of knowledge of such a firm, in care of the American Consul. Ex- 
cept in the larger cities, mail should not be sent in care of hotels. 



TRAVELING SALESMEK 97 

as the system of caring for it is inadequate and there is great 
opportunity for loss. 

An Example of Noninvestigation. — A concrete example of the 
lack of study before a salesman is sent is afforded in the experience 
of a shoe manufacturer. Being impressed with the possibilities of 
Latin American trade, he engaged a salesman who was unfamiliar 
with conditions, and instructed him to visit northern South Amer- 
ica including Venezuela. In this republic, because of the extremely 
high tariff on shoes, and the skill of the local shoemakers, there 
is absolutely no market for American footwear. The result was 
a complete loss of time and a heavy expense, which the manu- 
facturer might have avoided. Numerous examples of this lack of 
study may be cited. 

Anticipating Delays to be Turned to Account. — ^Where a repre- 
sentative arrives at a port at which the ship on which he is travel- 
ing will lie for several days discharging and loading cargo, as is 
frequently the case, particularly on the west coast, business may 
be done in the interim. For that reason it is desirable to obtain 
the schedules of steamship lines which are to be used. Where there 
is a possibility for such action all information available regarding 
cities accessible from the ports, the time required to visit them, 
and the business done therein, should be sought and analyzed before 
the departure of the traveler. 

The Importance of Initial Visits. — The representative of an 
American firm, who is on his first trip, should make haste slowly, 
and it will be found in the long run that this policy is the most 
economical. By making a careful survey of the situation before 
paying any visits, and learning definitely the houses which offer 
the greatest possibilities, much time will be saved. A sale to a mer- 
chant of the wrong class will have an adverse effect on the possi- 
bilities of introducing an article. For such a study time is required, 
and the representative should be expected to take it. 

A Conference with American Consuls Desirable. — The very com- 
mendable efforts which American Consuls are making to extend 
trade could be materially assisted by the cooperation of American 
manufacturers and their representatives. The latter should in- 
variably call upon the Consul before makings. any effort to obtain 
business, as the latter is usually in a position to give valuable 
advice concerning the commercial situation and possibilities. When 



dS EXPORTING TO LATIN AMERICA 

proper credentials are presented he is also able to assist the traveler 
to obtain an entree to clubs and the best social and business circles. 
This is a factor frequently overlooked by American travelers and 

, for this purpose credentials from influential sources are indis- 

j pensable. 

. — ^Example of Misdirected Effort.- — Many American concerns have 

', had to overcome the effects of misdirected effort on the part of 
overzealous agents whose only concern was the getting of orders. 
In some cities of Latin America the merchants of Oriental races 
are much despised by the merchants of other nationalities, not- 
withstanding the fact that they have succeeded in developing their 
business to no mean proportions. However, an unwary repre- 
sentative, who perhaps had not received encouragement from the 
more representative concerns, then placed the sale of his product 
with the unpopular traders. He learned too late that it was im- 
possible to establish himself again in the good graces of the more 
responsible houses who disapproved of his action in selling the 
•nonrepresentative firms. 

When Few Visits Are Desirable. — ^In introducing a product to 
the Latin American trade, it is far more desirable, when a repre- 
sentative has only a limited amount of time, to visit only one 
country and to make the proper connections, rather than to attempt 
to cover the entire continent. The undue haste and ill-considered 
efforts of many American firms have resulted not only in bitter 
disappointment, but in severe financial loss. 

Representative Should Seek Acquaintance of Best Classes. — The 
representative who wishes to establish a permanent market for 
his products should seek introduction to the best people of the 
community in which he happens to be. The importance of social 
connections and intercourse as an adjunct to business in Latin 
America cannot be overestimated. By meeting merchants, bankers, 
and officers in their respective clubs, places of refreshment, the 
theater, race courses, etc., he will much more quickly be able to 
achieve his purpose than if such advantages were not sought. 

What a Salesman Must Absolutely Avoid. — ^The traveler who is 
unacquainted with the life, customs and ideals of the Latin Amer- 
ican people, and who is making his first visit, should be very 
guarded in his comments regarding conditions as he finds them. 
All sarcastic reference to the people, their institutions, and their 



TEAVELING SALESMEN 99 

customs should be avoided. Under no circumstances should the 
question of politics be discussed, for this is a topic upon which 
the Latin American is perhaps more likely to show great feeling 
than any other. As it is easy to be drawn into a discussion of 
political conditions, the astute salesman will be extremely careful 
to avoid the topic. 

The Effect of Climate on Morals. — As the climate in general 
makes it likely for the careless to fall into habits which are much 
more easily resisted in northerly latitudes, it behooves the visitor 
to be very guarded in his indulgence in alcoholic stimulants. ^ This 
is particularly the case in the higher altitudes, and as the effect 
of stimulants is much more noticeable there, the traveler should 
endeavor to avoid all possibility of intoxication, which would seri- 
ously affect his prospects for business. The traveler should be 
modest in his demeanor and avoid boasting, particularly about 
America, as this is very disagreeable to the Latin American tem- 
perament. 

Information to be Exacted of Representative. — The information 
which a representative can acquire in the course of his travels is 
so valuable that its use in the home office frequently can be made 
to produce results far in excess of actual business obtained by the 
traveler. Frequently, salesmen supply this information, but as it is 
not compiled or collated, being merely in the shape of letters, it is 
buried in files and lost. To guard against this possibility the sales- 
man should be furnished sheets of paper, of light weight, which 
are suitable to be placed in loose leaf binders, readily filed and 
consulted. In this manner, the information is not only available 
for the house and all those interested therein, but can be gone 
over easily with the representative upon his return. 

The Kind of Reports to Exact. — The following should be exacted 
of a representative: 

1. A report on the list of names given a salesman prior 
to departure. This embraces names of customers, and pros- 
pects either already verified, or those obtained from directories 
or other sources. By carefully checking such a list and removing 
the "dead wood" in the shape of defunct, nondesirable concerns or 
those not available for other reasons, a valuable list can be ob- 
tained for follow-up work. 

2, Reports of visits to each merchant, with a statement re- 



100 EXPOETING TO LATIN AMERICA 

garding the interest shown by him in certain lines. If any dis- 
agreements or complaints are made they should be noted. 

3. Report on general trade conditions by towns or sections. 

4. Additions to the mailing list in the shape of names of dealers 
who have not previously appeared in the list and those newly estab- 
lished. 

A Practical Form of Report. — The wise export manager will not 

burden salesmen with requests for needless information. Only 

essentials should be required and the simplest form possible should 
be used. One that has been found very practicable is 5 x 9 inches, 
adapted for pocket use; these reports, which are made on light 
and durable paper, must be filled out as quickly as possible after 
leaving the business house upon whom the report is made, in order 
that the information acquired may be reported while fresh. 

Salesman's Memoranda for Own Use. — In supplying his firm 
, — -with information obtained, the representative should make a car- 
bon copy thereof, as he will be able to increase his selling efficiency 
by having easily available for successive trips the information 
previously obtained. This applies not only to the names of cus- 
tomers and prospective buyers, but a memoranda of articles in 
which each dealer happens to be interested, his peculiarities, his 
likes and dislikes. 

The Personal Element Important. — A representative who is 
^_^ seeking to develop a field will find it of the greatest advantage to 
keep in personal touch with his customers, and those with whom 
he wishes to do business. This can be done frequently and in- 
expensively, not alone by letters but by post cards and short mes- 
sages from other cities and countries. Such evidence of interest 
shown by the representative will yield a much larger percentage 
of returns than would the same energy expended in the United 
States. 

Time Required to Develop Trade. — Not only the firm that he 
W:. represents, but the salesman also must realize that effort and 
time are required to develop a business. The watchword in all 
business relations is cooperation, and this may be applied with par- 
ticular force to the Latin American field. There must be coopera- 
tion, not only of the house with its traveling representative, but the 
salesman must bear patiently with his principals, who, being at a 
great distance, and not being thoroughly acquainted with the con- 



TEAVELING SALESMEN 101 

ditions as he finds them, may not be so enthusiastic as he. The 
value of a first trip may not be apparent in the volume of busi- 
ness, but if carefully taken advantage of, may eventually yield 
great returns. The information which a salesman can acquire 
regarding local conditions, methods of packing, and foreign com- 
petition alone will be richly rewarded upon a second trip, provided 
that the information acquired has been turned to good account. 

Small Orders Desirable. — It is only in rare instances that a sales- 
man succeeds in obtaining large orders upon a first visit. Even in ^ 
the case of famous American firms who enjoy great reputations at 
home, initial orders for their products are usually small. This is 
due to the conservatism of the Latin American buyer, who, because 
of many unfortunate past experiences, prefers to make small initial 
purchases to assure himself that orders will be carefully filled, 
that instructions regarding packing and shipping directions are 
followed, that custom house requirements are observed, and that 
there is no substitution. A failure by many American houses 
to recognize this fact and a tendency to pay scant attention to 
first orders because they are small has often resulted in inability , 
to introduce products which might otherwise have had a consider- / 
able success. *'■- — ' 

Necessity for Special Qualifications. — The representative of 

American manufacturers in the Latin American trade field should 
possess unusual qualifications. So many important services may 
be rendered by such a representative that the manufacturer must 
be far more exacting than in the appointment of agents in the 
domestic market. One of the most important duties is that of 
determining the credit standing of the dealer. In Latin America 
credit information is far more easily obtained at first hand than 
by correspondence and the representative should be not only com- 
petent but trustworthy, so that the fullest credence may be given 
his reports regarding the credit standings of dealers. The appoint- 
ment of local and traveling agents also frequently falls to his lot 
and this likewise requires ability. 

The dualifications of a Representative. — The traveler who i m: 
dertakes the representation of American houses in the Latin Amer- 
ican trade fields must expect to find many unpleasant conditions 
and must be prepared to make serious sacrifices of personal com- 
fort. This is especially true in the remote places. He must also 



10^ EXPORTING TO LATIN AMERICA 

realize that because of the conditions hi& efforts, while the founda- 
tion of the business is being laid, will probably not result in a 
sufficient volume of business to justify his expenses, and much 
of his work will bear fruit only in the future. 

[en of High Character Needed. — Because the cost of traveling 
and living are both steadily increasing, it is inadvisable for manu- 
facturers to select low-salaried representatives. Many successful 
concerns have found it advantageous to employ graduates of uni- 
versities, particularly of those institutions w^hich have schools of 
business administration such as Columbia University, Harvard 
University, etc. The experienced travelers of export commission 
houses, also, are frequently chosen where important introductory 
work is necessary. 

Importance of Personality. — To a far greater degree than in the 
United States is personality a requisite of most efficient sales- 
manship in the Southern Republics. The possibility for intimate 
relationship with Latin American merchants is far easier than 
in North America. The representative who, because of his accom- 
plishments, intelligence, and acquaintance with literature, art, 
music, etc., is invited to the homes of his customers is naturally in 
a position to command a far larger share of the business than would 
be possible without intimate friendship. The well-to-do merchant 
of Latin America, native or European, sets no bounds upon his 
hospitality to the cultured representative. Invitations, too, are 
lavishly extended to entertainments of every sort and the privi- 
leges of clubs are freely granted. The most efficient representative 
will be able to enter into this life to the fullest degree and should 
be able to acquit himself creditably. 

The Influence of Social Life. — ^In connection with the subject of 
personal relations the value of social intercourse must be em- 
phasized. The most prosperous travelers are often those who, after 
business hours, frequent the places where they can meet their 
customers and enter generally into the social life of the communi- 
ties in which they find themselves. Very often the friendships 
thus formed are productive of more business than can possibly 
be obtained by insistent salesmanship. Not only the time, but 
the expenditure of money necessarily entailed by this intercourse, 
will be found well spent. 

Customs to be Studied. — The American commercial traveler who 



TRAVELING Sx\LESMEN 103 

is making his first visit to the Latin American countries should 
study carefully all the customs of business and social life. They 
are not alone interesting in themselves but will prove extremely 
valuable in furthering sales. Moreover, the observance of these 
customs will enable the traveler much more quickly to gain a 
foothold than would be the case were this essential feature neg- 
lected. 

The Treatment of Representatives. — Because of the unusual con- 
ditions which the traveling representative faces, and the absolute 
necessity for maintaining his own dignity as well as the reputation 
of the house he represents, his expenses for entertainment will be 
found heavier than in the domestic field. Exporters should not 
scrutinize such expense accounts too closely, particularly if the 
traveler is effecting good sales. It must be remembered, that the 
salesman, having been selected with care, is worthy of confidence 
and should be trusted not to be extravagant. The trials of the 
representative under the most favorable conditions are very great, 
and he should be encouraged in every possible way and nothing 
should be allowed to dishearten him. 

The Treatment of Salesmen's Correspondence. — The suggestions 
made by representatives in their reports should be carefully con- 
sidered and all correspondence should be accorded thorough atten- 
tion. Inquiries regarding prices or other items should be an- 
swered promptly, and fully. The suggestions which are made as a 
result of personal observation should be treated with consideration 
inasmuch as the competent traveler knows whereof he writes. 

Making ''Missionary" Work Productive. — In many instances the 
work of traveling representatives on a first visit is purely "mission- 
ary" in character, but if advantage is taken thereof, it can be 
turned to good account. To that end a simple but thoroughly 
effective system of frequent letters of follow-up nature should be 
directed to the houses upon whom the salesman reported. The fact 
that the advantages of the manufacturer have been presented by a 
personal representative offers a means of establishing intimate 
relations and the wise manufacturer will seek to profit thereby. A 
single display of samples to a Latin American buyer and a strong 
presentation of the selling points of an article by a representative 
are far more effective than a long series of letters without this 
personal toucbp 



104 EXPORTING TO LATIN AMERICA 

Other Advantages of Competent Representatives. — Not alone for 

"t" ' the duties outlined is a salesman of such importance to his firm, 
but where it is advisable to appoint general or local agents for 
the sale and distribution of manufactures, a competent repre- 
sentative can render his house invaluable service. By a study of 
conditions and a consideration of all the factors involved, a capable 
traveler can frequently select as local agents men whom it would 
be impossible to engage by correspondence. Another service which 
is of extreme importance is that of determining the credit to which 
a dealer is entitled. In Latin America, such information is far 
more easily obtained at first hand than by correspondence. For 
this reason alone, the exporter should insist that his representative 
be most competent in order that the fullest credence may be given 
his reports regarding credit standing of the dealers. In the chapter 
relating to credits and collections, the method to be pursued is gone 

i into fully. 

\ 

GENERA! AND LOCAL AGENTS 

i Introduction. — Only a failure to understand conditions in the 
Latin American market can account for the many misdirected 
efforts of American houses. It is inexplicable why business men 
whose success in the domestic field has been based on highly de- 
veloped personal salesmanship should attempt to win trade in 

^ Latin America by the occasional mailing of a catalog. This seems 
even more absurd in the case of cities like Buenos Aires, Rio de 
Janeiro, or Santiago de Chile, where business methods are as 
highly developed as in the cities of New York or Chicago. In 
these large cities, as in smaller ones also, importers desire to in- 
spect samples and as trade conditions, because of style changes, the 
need for demonstrators, etc., become more complex, the most inten- 
sive methods are required to obtain trade. The peculiarities of cer- 
tain lines of business have made it desirable that stocks be carried 
in the principal centers in order to insure quick deliveries of 

j_frequent purchases. 

Why Distributing Agencies Aid. — This method has been fol- 

' lowed with considerable success by numerous foreign firms, includ- 
ing some American .houses, whose sales are made to the smaller 
shopkeepers. The latter cannot afford to import direct but the 



GENERAL AND LOCAL AGENTS 105 

volume of their purchases is nevertheless very considerable. In 
many instances, however, it will be found that business can most 
easily be developed by means of agencies even when stocks are not 
carried in the distributing centers. Agencies are of two kindsT 
general and local. The former are usually for a certain district, 
which may lie entirely within one country or embrace 
parts of several republics. The latter are for a definite smaller 
territory, usually one city or community. The principle underlying 
the appointment of agents is that of frequent visits in order to 
keep in constant personal touch with buyers, as a local man can- 
vassing the field continually can undoubtedly effect larger sales than 
a traveler w^ho comes infrequently. 

How Agents May be Obtained. — Assuming that the merchant 
has made a careful study of the possibilities of his product, de- 
termined that the agency system is the best to follow, and logically 
divided his territory, his next problem will be that of obtaining 
aggressive, reliable agents. This may be done in a number of 
\ ways. 

^The Most Satisfactory Method. — Naturally, the best means of 
obtaining local agents is for the American business man or his 
export manager to visit the country, study the conditions, and after 
careful consideration, appoint the agent who seems most de- 
sirable. 

Agents May be Obtained by Correspondence. — The American 
exporter who cannot himself go, or who cannot send a com- 
petent representative, may obtain local or traveling agents in 
a number of ways. The following are some of the principal 
methods : 

1. His general traveling representative may make a personal 
investigation and appoint the agent. 

2. The manufacturer may advertise in local newspapers and, 
after obtaining references of the correspondent, make the appoint- 
ment. 

3. He may secure the agent as a result of the latter's direct 
application. 

4. He may arbitrarily select names of firms who advertise in 
local directories their desire for agencies. 

5. He may have been given the names of prospective agents 
by United States Consuls to whom he has written. 



106 EXPORTING TO LATIN AMERICA 

6. He may have had correspondence with commercial organiza- 
tions who have suggested names. 

7. He may have obtained suggestions from the "Daily Commerce 
Reports." 

8. He may obtain them from bulletins of the National City 
Bank, export papers, etc. 

C Points to Emphasize in Correspondence. — The manufacturer 
„A0 contemplates the appointment of local agents should make 
clear in all advertisements or letters relative to the subject the fol- 
lowing items: his facilities for exporting; his ability properly to 
care for export business ; all advantages of his products. Simultane- 
ously he should exact references, and make clear to the applicant 
his exact position regarding commissions, terms, territory, prices, 
discounts, etc. Every factor should be considered in order that 
no time may be lost in needless correspondence. 

-Caution Necessaiy in the Establishment of General Agencies. — 
The possibilities for the sale of a given product may be so adversely 
affected by an error in judgment that the manufacturer should 
approach this problem with the greatest caution. Following are 
some of the factors to be considered, and the pitfalls suggested by 
each should be studiously avoided: 

/ — 1. The Vastness of the Territory. A firm may apply for the 
representation of product in a territory which will be so ex- 

.., tremely large that it is impracticable to be covered from one place. 
As a specific instance may be cited the application of a concern 
in Rio de Janeiro for the entire republic of Brazil. If a manu- 
facturer were to grant an agency for the Brazilian field and to 
do business only through that agency, it would present a very 
peculiar anomaly if an order were received from Manaos. The 
latter is a point on the river Amazon, not far from Iquitos, Peril, 
about 3500 miles from the coast. To reach Manaos from Rio de 
Janeiro requires alone three weeks' time. The absurdity of such 
an arrangement is apparent. A country like Brazil should be di- 
vided into several territories as suggested in the Appendix. Fur- 
thermore, various sections of a country are utterly different. Care 
should be taken to ascertain exact conditions and apportion the 
territory accordingly. 

r — -2. Other Representations Held by Agents. This is an important 
factor for many reasons and one which will become evident upon 



GENERAL AND LOCAL AGENTS lO-? 

study. Other products sold, because of their dissimilarity to the 
new merchandise, will make it more difficult for the representative 
to introduce the latter. The manufacturer must be extremely 
careful to convince himself that application for a representation 
is not forwarded merely with the intention of preventing the sale of 
his product which might interfere with that of a similar one already 1 
being sold by the prospective agency. 

3. Nationality of the Agent. This is far more important thanlf 
appears on the surface, and is particularly so in the case of ma- 
chinery. It is obvious that if the agent is a German, and is used 
to selling only German machines and tools, it may be difficult for 
him to adapt himself to the American ways and methods. 

4. Organization. An agent may frequently be perfectly reli- 
able but because he lacks an organization to effect proper dis- 
tribution of a given product, the ambitions of a manufacturer 
for adequate distribution in a certain district may not be real- 
ized. 

5. Multiplicity of Merchandise. A representative who has too 
many kinds of agencies cannot devote as much time to a certain 
line as one who would make it his principal business. Further- 
more, if the variety of products handled is too dissimilar, it is 
unreasonable to expect results. The general agency whose prin- 
cipal business is the selling of machinery cannot be expected to be 
competent in selling jewelry, nor could agricultural implements 
and confectionery be well handled together, while surgical instru- 
ments and leather would likewise prove a disappointing combi- 
nation. 

Factors Affecting^ Local Agents. — ^Before granting a local agency 
a manufacturer should assure himself that the agent has a knowl- 
edge of the product it is desired to introduce or distribute. The 
standing of the agent both socially and commercially must be con- 
sidered, his ability should be of the highest, and the other repre- 
sentations he carries should in no wise conflict with or affect the 
new one granted. He should possess a wide acquaintanceship with 
the dealers or users of the product, and his facility for covering the 
territory properly should be made apparent to the manufacturer 
before the latter reaches his decision. The possible attitude of the 
local agent toward his principals must also be given consideration, 
and the exporter must make sure that his representative will not 



108 EXPORTING TO LATIF AMERICA 

take sides with local merchants against the firm, as is sometimes 
done by unprincipled men. 

Definite Understanding Necessary. — In engaging a locdl agent 
the American house must be very explicit in its letter of authoriza- 
tion. The duties, liabilities, and authority of the agent must be 
explicitly stated in order that no attempt may be made to make 
collections for the account of the American shipper and to pocket 
the proceeds. In the contract should also be stated fully the obliga- 
tions of the agent as to competing lines handled by him, so that 
the American house may not be subjected to loss because of be- 
trayal of confidence, or other reasons. 

Liability of Agent. — Occasionally an American firm depends 
exclusively upon its resident local agent for credit reports, relying 
upon the knowledge of local conditions which its agent may pos- 
sess. It often happens that the local agent guarantees to reim- 
burse the American firm in the event that payment is not made 
by its customer. 

In Europe such responsibility is called del credere. When such 
arrangements are made the business house must be doubly careful 
lest it become the victim of its agent's dishonesty or of his lack 
of judgment. 

Advantages of Special Agents. — When a business of good vol- 
ume is being done, it is almost essential that the exporter arrange 
for special representation. Such representation will be found par- 
ticularly useful when shipments are made agaiript documents that 
must be accepted and paid. When some unforeseen circumstance 
occurs and drafts cannot be immediately accepted the American 
shipper may frequently avoid heavy loss through an arrangement 
which is known as "in case of need." These words on a draft mean 
that in the event of nonpayment the individual (or firm) whose 
name appears on the draft marked "to notify in case of need" is ad- 
vised of the circumstances and can communicate direct with the 
shipper or himself take care of the documents. This naturally 
depends upon the arrangements made with the American house. 

Cooperation with Agents. — As in all commercial relations, abso- 
lute cooperation between the manufacturer and the agent is essen- 
tial. Following are a few concrete suggestions for such coopera- 
tion : 

1. Obtaining Prospects for the Agents. This may be done by 



GENERAL AND LOCAL AGENTS 109 

correspondence with dealers whose names are furnished by the 
agents and who are advised of the appointment of the latter and 
of the fact that they have samples, etc. 

2. Circulation of Advertising Matter. The work of the agent 
can be much simplified by the circulation of appropriate advertis- 
ing material. This will have a particularly good effect in that it 
will stimulate the agent to greater activities when he realizes that 
the house he represents is disposed to help him in every possible 
way. 

3. Inquiries Referred to Agent. Every inquiry received from 
the territory of an agent should be referred to him. Intensive 
work on the part of an agent to whom prospects are referred will 
likely result in increase of business. The policy of some manu- 
facturers in withholding notices of orders received direct, and 
denying commissions, is extremely shortsighted. 

4. Follow-up Work. Efficient follow-up work will prove ex- 
tremely valuable. This should concern itself with merchants previ- 
ously sold as weir as with prospective purchasers of whom the manu- 
facturer is advised by the agent. 

5. Copies of All Correspondence. A memorandum of advertis- 
ing matter and catalogs mailed, in addition to copies of correspon- 
dence, should be supplied to the agent. This attention will not 
only be greatly appreciated by the representative, but it will be 
found productive of greater efficiency. ^ 

The Value of Cooperation. — The greatest results in the develop- 
ment of trade with Latin America, no matter what method is 
adopted, will be obtained by cooperation. The wise exporter will 
seek by every possible means to cooperate intensively with local 
or general agents, with importers, and, in the final analysis, with 
the ultimate consumer or user of his products. 

Clearing Samples. — One of the sources of most frequent com- 
plaint, particularly by salesmen who are making their first visit to 
a Latin American country, is the difficulty of clearing samples that 
may be carried. A failure to approach this problem from the right 
standpoint often causes delays and annoyances. A rule which 
should be followed by all interested in this matter is the proper 
treatment of customs officials charged with the collection of duties. 
The Latin American cannot be browbeaten or hurried; he should 
be treated with the utmost urbanity, politeness, and consideration. 



110 EXPORTIIN'G TO LATIN" AMERICA 

This method will result in a saving of time and will redound to 
the advantage of all who have business with customs officers. 

Assistance of Custom House Brokers. — The laws relating to 
imports and the exports passing through the custom houses are 
very similar in all the countries. A salesman, however, who car- 
ries samples for which he wishes to give bond, should imme- 
diately consult a reputable custom house broker. The latter usually 
knows all the requirements and, having an acquaintance with the 
officials, can generally secure the entry and clearance of samples 
much more quickly than the American alone. 

Clearing Samples Under Bond. — The custom house regulations 
in many Latin American countries have very liberal stipulations 
regarding samples carried by commercial travelers. Before a trav- 
eler starts on a journey he should carefully prepare a memorandum, 
practically in the same manner as though it were an invoice. On 
this document should be specified: (1) an exact description of 
the samples carried; (2) their value; and (3) their gross, legal, and 
net weight. 

Such a memorandum will make it possible to supply customs 
officials quickly with a description of the baggage carried, and will 
expedite its clearance when no regular consular invoice is re- 
quired. 

Consular Invoice for Samples. — Of even greater value is a con- 
sular invoice covering the samples carried and containing a full 
itemized description thereof. On such an invoice there should be 
specified the exact character of the samples, including the combina- 
tion of materials therein, the net, legal, and gross weights, etc. 
This will assist greatly in clearing sampleg through custom houses 
and will be found generally useful. If the traveler is visiting 
various republics the following concrete suggestions will he 
valuable : 

If departure is taken from the United States to Cuba the 
consular invoice should be made by the Cuban Consul. When leav- 
ing Cuba for Venezuela, the Consul of Venezuela in Havana should 
certify another invoice. This method should be followed from 
one country to another. 

Arran^ng Bond for Samples. — In most of the republics bond 
may be given for samples. This bond provides that the samples 
are to b§ withdrawn from the country within a stated length of 



GENERAL AND LOCAL AGENTS 111 

time. The signature of a reputable merchant is usually sufficient 
to obtain the bond, although in some countries it is necessary to 
arrange for the payment of the duties in currency. When the 
samples are withdrawn for the purpose of being taken to an- 
other country, the duties thus deposited are refunded. The duties 
and customs differ so widely in the different countries that they can- 
not be stated in detail here. When a journey to Latin America 
is contemplated and it is decided to learn conditions regarding the 
clearance of samples, the information may be obtained as follows: 

1. From the Consulates General of the various republics, in New 
York City. 

2. From the Bureau of Foreign and Domestic Commerce of the 
Department of Commerce, Washington, D. C, or its agents in the 
various branch offices. 

3. From representative firms in the different countries. 

4. From commercial organizations such as the National Associa- 
tion of Manufacturers, etc. 

Personal Attention to Baggage. — In clearing baggage through a 

custom house it is absolutely essential to give the matter personal 

, attention. The experienced traveler will not intrust the clearance 

to a subordinate but will himself oversee it. This personal attention 

includes : 

1. The location of the baggage. 

2. Attending to its clearance. 

3. Seeing that it is properly placed on train, steamship, or other 
conveyance. 

Taxes on Commercial Travelers. — A source of much trouble and 
annoyance in many places in Latin America is the matter of taxes 
on commercial travelers. This is a difficult subject because of the 
wide variation in application. Although the tax in certain of the 
countries is nominally a very heavy one, it is rarely collected in 
full, inasmuch as the payment is frequently a matter of compromise 
between the applicant and the official to whom the privilege of col- 
lection has been awarded. In many places no tax whatever is 
exacted, notwithstanding the fact that there is a law authorizing 
its collection. 
I How Payment Is Avoided. — In those places where the municipal 
officials are strict in the enforcement of the law, many travelers 
overcome the difficulty by writing in advance of their coming to 



112 EXPOETING TO LATIK AMERICA 

one of the principal importing houses. This house, by reason of 
the taxes it pays and the license for doing business it has obtained, 
assumes charge of the samples, and while the traveler is in the 
country or district practically arranges that he may represent it. In 
this manner payment of the license may be avoided. It is highly 
desirable for the traveling salesman to take every precaution in this 
respect and he can, by questioning fellow travelers and merchants 
in adjacent towns, ascertain the conditions which prevail in other 
places to be visited. A conference with the American Consul imme- 
diately upon arrival is a wise precaution and no effort to sell should 
be made before that is done. The exact conditions governing the 
payment of license by commercial travelers are different in almost 
all Latin American republics. (See page 534.) 

Some Travelers' Taxes. — In many of the republics a national tax 
is exacted and a further tax is assessed in the provinces. In the 
Argentine Republic, there is a national tax of $300 paper or about 
$50 gold, and there are other provincial taxes. In six states of 
Brazil, the taxes vary from about $35 to $50 American gold or 
about $200 Brazilian paper. In Ecuador the tax on traveling sales- 
men is $50 gold per year. In Salvador the tax exacted is 100 
pesos for a stay not to exceed two months. For a stay in excess 
of that period a monthly tax of 25 pesos is to be paid by the 
traveler to the custom house upon departure. In the republic 
of Panama the tax is 10. The taxes exacted of traveling repre- 
sentatives in the republic of Bolivia vary according to the com- 
munity. The collection thereof is generally "farmed out" and col- 
lectors frequently accept less than the amounts which they are 
authorized by law to charge. The taxes in the principal communi- 
ties are as follows: La Paz, 200 to 300 Bolivianos; Cochabamba, 
1000 Bolivianos; Oruro, 250 Bolivianos; Potosi, 200 Bolivianos; 
Sucre, 300 Bolivianos ; Uyuni, 250 Bolivianos ; Santa Cruz, 400 to 
800 Bolivianos ; Tarija, 200. The Boliviano equals .389. 

Population Sometimes Misleading. — Before determining upon 
the establishment of an agency and the extent of territory to be 
allotted to it, the manufacturer should thoroughly familiarize 
himself with the existing conditions and the possibilities for the sale 
of his product. There are many factors which may prove ex- 
tremely misleading, making analysis indispensable. An example 
of such factors is the population of a country. The fact that a 



aENEML AND LOCAL AGENTS 113 

large number of inhabitants are reported in a certain republic 
does not prove that a certain consumption or sale per capita is 
possible. As an instance may be cited the case of Mexico whose 
population is 16,000,000. Of this number only 4,500,000 may be 
considered as probable buyers of xA.merica's manufactures. This ap- 
plies with equal force to such countries as Guatemala, Bolivia, 
Ecuador, etc., while in Costa Rica, Argentina, and Brazil the situa- 
tion is very different. This matter is also important from the 
standpoint of exactions required when agencies are granted. Manu- 
facturers have often refused to grant application for agencies 
because the applicants refused to agree to import a quantity of a 
product which was out of proportion to the resources of a com- 
munity. 



CHAPTER VII 

PLANNING A SALES TRIP. CONDITIONS OF TRAVEL IN LATIN 

AMERICA 

Introduction. — The value of personal contact in the develop- 
ment of business is widely recognized. The establishment of 
more intimate and profitable relations between the exporters of the 
United States and the importers of Latin America can undoubtedly 
be hastened by an exchange of visits from the heads of business 
houses. In the past, commercial organizations have laid most 
stress upon the visits of Latin American merchants to this country, 
and the only organized effort for tours of Latin America has been 
in the appointment of commissions or groups of manufacturers to 
visit the southern countries. The value of the p ersonal visit s of 
e xecutives to Latin Amer ica cannot be exaggerated as the mer- 
chants of those republics are particularly appreciative of the com- 
pliment implied in the personal call of the head of a large company. 
Such visits result in a greater intimacy and enable the American 
executive to obtain, at first hand, information which would other- 
wise be hard to secure. 

Vacation Trips Enjoyable. — ^Business men have come to look 
upon vacations as indispensable to efficiency. The time they have 
usually given to summer resorts or European trips may be spent 
with equal enjoyment and with far greater profit in visits to Latin 
American countries. Many of the most important cities of Latin 
America have very delightful climates and in the coast cities, where 
tropical conditions exist, the days and even the nights are fre- 
quently cooler than the summers of the American cities of the 
temperate zone. The tableland of Mexico is particularly pleasant 
during summer, as are all the interior cities of Central America, 
whose elevation makes the climate very pleasant. The southerly 
part of South America, including Uruguay, almost the entire Ar- 
gentine Republic, the southern part of Brazil, and the greater part 
of Chile and Paraguay, lie in the South Temperate Zone. The equa- 

114 



. PLANNING A SALES TRIP 115 

torial republics, particularly Ecuador, Colombia, Venezuela, Peru, 
and Bolivia, also possess high, plateau regions in which the tem- 
perature is that of the American Indian summer, and often cooler. 
The visitor to Ecuador traveling from Guayaquil to Quito on a trip 
inland will discover that in five hours on muleback the climatic 
conditions undergo a greater change than in a trip of six days 
north or south of Guayaquil on a steamer. Even in Cuba and Porto 
Rico the summers are very agreeable. In the upland capitals, 
the range of the thermometer is between 50 and 70 degrees Fahren- 
heit. The factor of greater importance than heat in the tropical 
countries is the moisture of the air and the heavy rainfall. 

The Humboldt or Antarctic Current cools the air and water along 
the northern part of the western coast of South America to such 
an extent that even bathing is uncomfortable. The scenery in 
almost every one of the Latin American countries is of unsurpassed 
beauty and for midwinter visits more delightful excursions can 
hardly be imagined. Trips to these republics can be of varied 
duration since most of these lands are quickly accessible to the 
United States, especially Mexico, Cuba, Porto Rico and Central 
America. 

Factors in Planning Trips. — A manufacturer should seek to^ 
learn ^ll that he possibly can, rep^ardin (^ bu^^'r^^r ^r.r.r^it;<^ T^g^ jji the 
s hortest p o^^ihlp timf The means of doing this depend upon a 
variety *of circumstances. It may prove most advantageous to' 
make short visits to a number of count jies, touching only at the 
prm(iipal plilC'es, "murder to obtain a knowledge, by personal associa- 
tion with the merchants, of their requirements and of different trade 
fields. Where time is a factor and nnly a. short, trip can_b ^j]aade, 
the manufacturer, if he has learned by previous study that the 
conditions for the sale of his products are practically the same 
in all of the twenty republics, may obtain much valuable knowl- 
edge by v isiting^ O Til y one or two r^nTrfriiag At any rate, he should 
determine in advance the places at which he will stop, and plan his 
trip with the utmost care, so that he may be reached quickly and 
directly whenever it is found expedient to do so. Necessity for 
jdianceLsludy cannot be too strongly emphasized, gs^ pppdlARs tyavpl- 
m g may thus be avoided by omitti ng vi^Hs in r^pnntries where the 

prr>spprW^fm» Lnoi |^f.gP nro iiTif^VOTnhln hfT PaUSe of dlffiCUltXeS that / 

cwiBot be overQpme. ^^ 



116 EXPORTING TO LATIN AMERICA 

In the Appendix appears a brief commercial outline of Latin 
America and of the ways in which the different countries may 
best be visited. The American manufacturer who seeks to do 
business there should determine by study, in accordance with the 
suggestions given in Chapter II, which places it is to his advan- 
tage to visit. 

Information Regarding Routes, Etc. — The business man who 
intends to visit the Latin American republics himself or to send 
representatives to make investigations may obtain the needed in- 
formation relative to these countries from a number of sources. 
These are : • 

1. Travel bureaus. 

2. Tourists' agencies. 

3. Railroad agencies. 

^4. Pan-American Union, Washington, D. C. 

5. Steamship lines plying to Latin America. 

Important advantages may be obtained by the purchase of round 
trip tickets of recognized tourist agencies. During the winter 
season, many excursions are made from New York City or Gulf 
ports which will permit the manufacturer to visit the West Indies, 
Central America, and ports on the north coast of South America. 
As the stops usually made are not of sufficient length to permit 
investigation, it is preferable to make journeys which would per- 
mit of a longer stop-over in the principal cities. A list of tours 
and their cost is given on page 533. 

Suggestions for Various Trips. — Following are suggestions for 
specific tours, which may be added to indefinitely: 

1. To the Republic of Cuba, from New York or Gulf ports. 

2. To Cuba and Mexico from New York or Gulf ports. Trips 
from Havana to Mexico by way of Vera Cruz and return via 
Laredo, Eagle Pass, or El Paso. 

3. To Central America via Panama or Costa Rica, return via 
Guatemala and New Orleans. 

4. West Coast South America via Panama and return via Argen- 
tina and. Brazil. 

5. East Coast South America and return via West Coast South 
America and Panama. 

The Best Time for Visits. — The conditions which influence 

traveling vary so greatly- in the -Latin American countries that 



PLANNING A SALES TEIP 117 

no definit e ti me seems best, although in some of the republics 
commercial travelers find it ad vantageous to reach cprt ai}i_gfYn]i' 
tries at different period s. In Argentina this is J.aJluaji:y, when the 
bulk of the crops are being exported. In Brazil, N ovembe r, in 
many lines of manufacture, is found to be advantageous because 
of the fact that the exporters of coffee are then receiving returns 
from their European consignments of this important agricultural 
product. In Central America, manufacturers are accustomed to 
place their orders for holiday business in the months of August, 
September, and October in order that shipments may be received in 
time for the Christmas^ business. Many lines of industry are af- 
fected by the rainy season and in such instances importations are 
timed so that they may arrive just previous to the beginning of the 
rains. In Mexico conditions are governed largely by the same 
factors that influence the purchase of products in the United 
State s. 

As far as visits are concerned, many travelers prefer the rainy 
season, notwithstanding the daily downpours, in preference to 
traveling during the period of extreme dryness when the journey 
is frequently made very unpleasant by the constant dust. On the 
whole, it will be found advantageo us to visit t>^^ ^"p^'^i^ls f^^^^^'^g 
the period when the social season is at its height, as a better 
opportunity is afforded to study conditions and to obtain an in- 
sight into the life of the Latin American people. As the religion 
of the great mass of Latin Americans is Catholic, the period prece d- 
ing Easter is usually t he dullest, s ince Lent is strictly observed. 
^^he Selection of Routea. — The choice of a route, as already 
stated, is optional. If a trip to South America is planned, it may 
be more desirable to visit the republics of Brazil, Argentina, Para- 
guay, and Uruguay first, and then cross the Andes to Chile and 
in turn visit the capitals of the republics on the west coast, re- 
turning via Panama. 

Factors Involved. — T rips nf invftRtig a^jon. particularly jEhfin the 
t_im^ is liniited, should be maiiS-preferably,J:flL the c2|,pitaJ^ A 
study of practically all of the Latin American countries will reveal 
that the great bulk of the population is located in the principal 

cities. The pnpri]gfinii nf «mifh AmPnVa ia fpUTir' IflTg^^ly £1^ ^^^ 

b order or j axQund- tho rim of the nnnHnonf. An unieisiafiding 
■oMhe c onditiQ us that exist in ^fie other parts o f the countries may 



lis EXPORTiisra to latik- America 

easily be secured by a series of short trips to the small town s, 
to large ranches, estancias or haciendas, etc. 

Expense of Traveling. — Many business men are deterred from 
making trips to Latin America because of the expenses of travel, 
but 'frequently these have been exaggerated. In most instances 
trips could be arranged, the cost of which would not involve greater 
expense than those of an ordinary vacation. Generally speaking, 
the expenses, including the railroad and steamship fare, with the 
necessary baggage, will a verage from jTj j, ^^ $10-00 per d ay, 
depending naturally upon the cities visited and the hotels selected 
for stopping places. It is i nadzisable to cau y-t^iMrks which weigh 
more than 125 pounds as they add materially to the expenses. 

TPiie (Jon'SItion of Transportation. — The passenger who travels 
between the United States and Latin America finds that the accotr}- 
modatiims are, on the whole, very famc^ble. A number of lines 
plying between New York and the Argentine operate steamers 
that may be compared in a general way with the better class of 
ships in the slower routes in the European American trade. Be- 
tween the southern parts of the United States and Central America 
steamer accommodations are also very desirable. In the larger 
ships the staterooms are modern and artificially cooled, while the 
faje is of a high degree of excellence. Where it is necessary to 
(travel by rail in the Latin American countries, the railxoada^ 
for the most part, o ffer excellent accommodatio ns. The sleeping 
cars are sometimes even better than American Pullmans and where 
long trips are necessary good dining car service is provided. 

Traveling Conditions in Latin America. — The conditions which 
affect traveling vary so greatly that it is impossible to speak of 
them except in the most general terms. It i s jioW j however,-pas-, 
sible t o reach practic ally every_jmpQitaai^kee in-iatifi-Affierica 
withoutMljffimlty^ cithe r by steamship or rail,. For the most part, 
the accommodations are good, but naturally these are influenced by 
the amount of travel, the importance of the route, the locality, and 
similar determining factors, as in the United States. 
^ The Character of the Hotels. — Naturally in a territory as large 
as Latin America and with as varying conditions, there are ^ any 
cl asses of hote ls ; hence here again it is possible only to generalize. 
inJiiaJLaxgerdties, such as Buenos Aires, Mexico City, Havana, etc., 
the good hotels equal in accommodations and service those of the 



PLANNING A SALES TEIP 119 

larger communities of the United States, although the prices are 
jjighftT. In the smaller iowne. the hotels are often of a very ln\y 
o rder, although in some places comfortable accommodations can 
be had; in fact the modern conveniences are becoming more and 
more common. The traveler can usually obtain information re- 
garding the best hotels at which to stop by discussing the subject 
with fellow travelers, with friends, with steamship officials, or / 
with merchants in the port previous to the new one to be visited. ^ / 

How to Obtain Specific Information. — Literature regarding the 
individual countries is rapidly on the increase and a number of 
excellent books have recently been published. These will be found 
listed on page 478. 

Suggestions for Clothing. — The traveler who visits Latin Amer^^ 
ica must pr^viVlp himself with clothing appropriate to several cli- 
mates._ If he confines his movements to the tropical regions, cloth- 
ing appropriate to the summers of the northerly latitudes will 
suffice. If it is necessary to visit the interior or plateau regions, 
heavier clothing must be carried, particularly woolen underwear 
and overcoats. If visits to remote sections are anticipated, where 
conditions are more primitive, and first-class accommodations are 
not available, it is advisable to make provisions for personal co n- 
veniences . The following brief suggestions will prove valuable : - 

Outer Garments. Linen, cotton, or duck trousers and coat. Some 
travelers object to these because of the expense of laundering 
them since many changes are required, and therefore they are not 
practical. Eoom is also required in trunks; however, they are 
natty and cool. They can be obtained at reasonable prices in the 
port cities. The fabric known as "Palm Beach" is also worn but 
many experienced travelers prefer simple blue serge which is both 
cool and serviceable. The objection to the wearing of khaki is 
that the wearer presents the appearance of an official or military 
man, which is frequently disadvantageous in the interior. For trips 
into the interior (made on horseback), stout woolen suits should 
be worn. For dress purposes, the ordinary black dress clothes are 
indispensable. In those cities which enjoy a temperate climate, the 
^clothing worn under similar conditions in the United States is 
appropriate. Frock suits are in demand and the silk hat is more 
widely used in Latin America than in the United States. 

Underwear. Anything that is comfortable may be used, and only 



120 EXPOETING TO LATIN AMERICA 

the individual needs of the traveler should be considered. It is ad- 
visable, however, to carry both light and heavy weight because of 
the frequent changes, and on account of wind in traveling from 
the lower to the higher regions. The use of an abdominal band, 
which is easily put on and taken off, is advisable in the mountains. 
^ Necessities for Horseback Trips. — Travelers who are compelled 
to make overland trips on mule or horseback should provide them- 
selves with a complete traveling outfit. This naturally consists ofi 
a traveling suit of wool, already referred to, a broad-brimmed soft 
hat, heavy socks, thick-soled shoes, leather riding boots, and close- 
fitting puttees. The latter should be high laced, as they tend to 
keep out the insects known as garapatos, jiggers, etc. A flexible 
waterproof bag, which is easily rolled up and strapped behind 
the saddle, must also be used. In this can be placed necessary 
changes of clothing and simple articles of food which must be kept 
therein. A rubber coat should also be bought. The best variety 
is the ordinary black rubber coat which will keep off the heavy 
rain. The ordinary raincoat will not withstand the tropical down- 
pours and the slickers sometimes used are often too heavy. 

Some travelers prefer the poncho, which is a heavy rubber blanket 
with a hole in the middle through which the head is placed. It 
serves to cover both the rider and the horse, permitting the heavy 
rain to run off. The carrying of one's own sheets, blankets, and 
pillows is advisable, and if a long trip to the interior is to be made 
a strong hammock should invariably be carried. 

In some instances a strong folding cot is preferable to a ham- 
mock, although the latter has advantages. When possible an air 
mattress is also a highly appreciated luxury, as is a strong rug. 
This is because of the fact that sleeping accommodations are often 
far from inviting. A mosquito bar is likewise essential and par- 
ticularly so for use on river steamers. The best sort of bar is 
one which folds, the modern canopy effect being especially desir- 
able. In this connection mosquito nettings or gauze coverings for 
the head should also be purchased before departure, and gloves with 
which to protect the hands where mosquitoes are very abundant 
should likewise be included. 

A durable electric pocket lamp will often prove highly useful. 
A liberal quantity of a preparation with which to anoint the body 
against insects should also be included in the kit. One of the best 



PLANNING A SALES TKIP 121 

is oil of citronella. The traveler who is accustomed to frequent 
shaving should include a liberal supply of shaving soap, ordinary 
toilet soap, and other necessities. A few strong towels should form 
a part of the baggage. In the dry regions a duster should be 
used, while a thick woolen shawl will frequently be found a great 
comfort. Under such conditions, also, shirts with soft collars 
will be found most comfortable. 

All these articles should be purchased at home as they can be_ 
bought more reasonably than in Latin America. 

Proper Saddles Important. — In order to obtain the maximum^ 
comfort while traveling a proper saddle is indispensable. It will 
generally be found that the native saddle is the best for the pur- , 
pose but a leather-covered stirrup should be insisted upon. The 
broad leather covering will protect the legs against the trees and 
rocks with which they come in contact. In most countries the girth 
of the saddle should be small as the horses are generally not 
large. 

The traveler should guard against being overheated and should 
always walk in the shade in preference to the sun. At midday he 
should studiously avoid the street. 

Water. This should be eschewed, except in large cities where 
absolute assurance of its purity can be obtained. The fact that 
the source of the water supply is the mountains is no guarantee of 
its purity, because of the danger of its contamination in transit. 
In the uplands of Peru, for instance, the water from the moun- 
tains is said to cause a sickness known as viruga, or Couzens 
disease. 

Mineral Waters. If these are well-known foreign brands, the 
traveler is perfectly safe. Local brands should be regarded with 
the utmost suspicion as frequently they are full of impurities and 
bacilli. 

Vegetables. Because of the fact that they are washed in water, 
salads, etc., should be avoided. Generally speaking, vegetables 
are only perfectly safe if cooked or boiled. 

Diseases to be Feared. — On the whole, health conditions in 
Liatin America are such that the traveler who exercises ordinary 
care need have no particular fear. By guarding against unnecessary 
exposure and observing caution in regard to personal habits in ad- 
dition to careful personal hygiene, any danger is minimized. Small- 



122 EXPORTING TO LATIN AMERICA 

pox naturally exists, but is due to the lack of cleanliness and can 
easily be guarded against by vaccination. No traveler should visit 
Latin America without this precaution. Yellow fever exists in 
certain swampy localities and the mosquito net is the best protec- 
tion. The bubonic plague is known in certain ports, but there is 
practically no danger therefrom. Leprosy exists, but presents no 
danger. Beri-beri, when found, is usually the result of lack of 
nourishment. Typhoid fever is quite prevalent in certain places 
but is diminishing. This should be guarded, against by avoiding 
water, uncooked vegetables, etc., and by the use of an anti-typhoid 
injection. Malaria exists chiefly in the countries and villages, 
and is caused by lack of proper sanitary conveniences. It is car- 
ried chiefly by the mosquito, against which the net is the best pro- 
tection. Tuberculosis is the cause of a very high death rate in 
many of the upland cities. It is superinduced by the bad housing 
conditions and often results from pneumonia which is caused by 
the rapid fluctuations in the temperature. In some places there is 
a change from 104 degrees Fahrenheit in the sun to 37 degrees 
Fahrenheit in the shade. Soroche, or mountain sickness, is caused 
by the high elevations. Its symptoms are a severe headache, vomit- 
ing, nausea, etc., brought on by the diminished atmospheric 
pressure. 

p- Conditions Affecting Health. — Because of the wide range of 
climate in Latin America it is only possible to speak in general 
terms regarding health conditions. In the larger cities sanitation 
is usually all that can be desired, but in the smaller towns condi- 
tions are often not so favorable, although in many places where 
modern sanitary methods have not been adopted efforts are being 
made to correct the defect. It is extremely important that the 
traveler, especially in the cities near the equator, shall observe more 
than the ordinary rules of hygiene, and care should be taken not to 
expose oneself more than necessary. The following specific sug- 
Jgestions will be found useful : 

Insects. The mosquito is one of the pests which the traveler 
should seek to avoid, inasmuch as yellow fever, malaria, and other 
diseases may be contracted therefrom. For that reason a mosquito 
bar should invariably be used. 

Alcohol. The use of alcohol should be foregone in all its forms 
as it is far more dangerous than in the United States. 



PLANNING A SALES TRIP • 123 

Sudden Chill. One of the peculiarities of the tropical highlands 
is the extreme difference between the temperature in the sun and 
in the shade. This is even more marked in the case of the fall in 
the temperature between night and day. It can be most easily 
avoided by a gradual ascent from the lowlands to the uplands, with 
stops at various altitudes to accommodate the organs to the chang- 
ing conditions. 

Snow Blindness. This frequently causes inconvenience to trav- 
elers who cross the snow fields of the Andes. Colored glasses should 
be carried as a protection. 

Anemia is suffered principally by the natives and is due to the 
lack of hygienic conditions. 

Medicine Case Needed. — Experienced travelers recommend ih^ — 
carrying of a medicine case containing simple remedies. These 
include, in addition to the oil of citronella, quinine pills or tablets, 
calomel tablets, vaseline, alcohol, and other ordinary remedies. 
Some gauze bandages, court plaster, and similar materials will be 
found useful. 



CHAPTER VIII 

THE MEECHANTS OF LATIN AMEEICA. THEIE BUSINESS CUS- 
TOMS AND METHODS. THE STORES AND SHOPS 

iTMany misconceptions prevail regarding the people of Latin 
America. Among business men in particular there is a general lack 
of knowledge of the merchants of the southern republics. 

It is highly essential, if business is to be transacted properly, 
that the manufacturer should have a thorough knowledge of his 
correspondents and analyze very carefully the many conflicting ele- 
ments with which he must contend. Such analysis serves to 
emphasize the necessity for a scientific consideration of the prin- 
ciples underlying export business. The American business man 
after such study will more fully realize the marked difference in 
/^^nditions between a domestic and a foreign market. 
_^ The Kinds of Mercharis. — The business establishments of Latin 
'America in general are of two classes: (1) t hose owned by f or- 
eigoers (G erman , English, Fre nch, Spanish, Italia n, Portuguese, 

etc.) ; and (2) ^-l^ng Q ppnr^nnfnrl V>Y nnfiTfOP ■ 

The necessity for differentiating will be more readily appre- 
ciated if the following statistics of foreigners in business, in the 
city of Buenos Aires alone, are taken into consideration. The 
number of business houses there total 29,690, exclusive of indus- 
trial or manufacturing plants. Of these 12,383 are Italian, 12,783 
Spanish, 4,358 Argentine. The number of German houses in 
Buenos Aires is 299 and of British 163, while of Americans there 
are probably between 70 and 80. In other cities the number 
of foreigners will vary materially from the foregoing but the Span- 
ish generally outnumber the Italians; in other communities, as in 
the city of Guatemala, for instance, the German is the predominat- 
ing element. 

Development of the Latin American. — As the natives of the 
"" different countries are an important factor in Latin American com- 
merce, a consideration of their character is essential. The view- 

124 



THE MERCHANTS OF LATIN AMERICA 125 

point of Latin Americans cannot be understood without an analysis 
of their development. 

The inhabitants of Latin America are regarded by most people 
either as Spaniards or Portuguese, and in some instances as 
mongrels or half-breeds. However, the L^tin_ATn,prican is a special 
type and the greater bulk of the population is of the mixed or 
Mestizo class, mixed Span ish_aiLd Indian hlxiod. Many of the 
native merchants are of this extraction. In some of the republics 
the Mestizo class is very small. This is. particularly true of Costa 
Rica, while in Guatemala the extreme opposite is the case, the 
native Indian population being far in excess of the Mestizo. 

Mingling of the Races^ — In Latin American countries the 
mingling of the races has been of questionable influence. In the 
days of the conquest the iinmi g rants f r -om^Jlurrtpe were the lowest 
-i^e of adventurers who intermarri£d---witli_the native Indian 
women. In the course of years since the foundingoFlEese coun- 
tries there has been considerable intermarriage and numerous 
types have arisen. As a result, the white population is, to a very 
large extent, mixed, and has at least a certain proportion of 
aboriginal blood. Generally speaking, the inhabitants of Latin 
America may be classified as follows: ' 

1. Whites, with a greater or lesser percentage of other blood. 

2. The Mestizos, or white and aboriginal. 

3. Pure Indian. 

4. The Mulatto. 

5. The Sambo, the result of intermarriage of Indiafl. aQdJ)lack. 

6. Miscellaneous groups too widely differentiated to describe 
in detail. 

The Distribution of the Races. — To the Mestizo cl ass belong the 
bulk of the population of Chile^ Peru. Brazil, Mexico and other 
South and Central Ameriran rpp uhlics. The p ure Indian is found 
in many of the countries of Central Amer ica and likewise i n Mex - 
ico^ The Mulatto is most common in certain parts of Brazil, 
in the Atlantic Coast regions o f the Central Americ^an republics, 
in C uba a nd P orto R ico. The Samb o is mosijafteDLiound in cer- 
tain districts o f Braz il. 

The Difference Among the Lower Classes. — It is interesting to 
contrast the classes of the population of the various republics. In 
^Mesico the laborer is known as the peon, while in ghile those 



126 EXPOETING TO LATIN AMERICA 

who make up this strata of society are called rotos. The agjimil- 
tural labore r of Chile is of ajiigher class than the'peon of Mexico 
and bears the na me of inquilin o and is on the whole a very in- 
dustrious law-abiding citizen. The oholo of Ecuado r, B olivia , and 
Pfiiu, correspo nds to the Mexican peon, while the ^fi2i^:o_£tLBglivia 
is of a somewhat highertype. 

r' The Buyers of American Products. — The American manufac- 
turer must consider all specific problems in connection with export 
trade. One of these is the subject of the actual importers of 
American products. Sales of American wares can be made to the 
L^ollowing : 

1. General Importers. These will act as rlistribntora inr ^, prmn- 
try or district or buy for their own account; thjirsales^are made 
at retal Lor wholesale_without restriction regarding territory. 

2. T J^e Wh.nlp.Rnle. Merc ha nt Jobbers . This class of dealers re- 
quires little explanation. ]^p£[itaiii)ns are made i n quantit i es fo r 
sales to dealers . 

3. T he Retm Jer s in Position to Im port for Their Own Accoj int. 
The latter cjassj s not clearly defin ed and nn 1y hy pprsopp] YJ^its 
or sales by local agents f\V>1p fo j^dg^-^^^ conditions can their quali- 
fications be determined. Many losses have been sustained by manu- 
facturers who have failed to discriminate and have sold to retailers 
whose purchases did not warrant direct importations and who 
should have supplied their requirements in the nearest wholesale 
houses. 

4. In£r[ fl Tfirlim rival Tp iJlo rters nr Cnm,p anies. These include 
railroad and in dustrial compa nies or important farmjosaneis, 
etc. 

The Attitude of Dealers. — In discussing the subject of sales to 
I Latin Americans, the attitude of dealers toward the general prob- 
' lem of merchandising must be considered. This is an interesting 
topic and essential in studying the possibilities of the markets. In 
the first place, with but rare exceptions, retail prices t^re Jiigher 
in Latin America than in the United State s. This is due to the fact 
that dealers, becaus e of financial and credit conditions, are com- 
pelled to have a larg^er margin of profit in order joj;ioyer thejiigh 
costof_dijjjagJiuaiLi£ss. With f ew exceptions j iutw- must be paid 
o n everything imported . The freight must be paidi or a l ong ocean 
Jiaill, and the ch arges, of thp.-f^nsl^pm^ ^ brokejra^or cl fl ai i ^ nr,^. and 



THE MEECHANTS OF LATIN AMERICA 12^ 

the cost of inland transportation (in the United States as well as 
in the Eatnr~Ai»eFi^aTr"coiintries) . 

As the possibilities of fregTient *^tnr n-ovpr'^ nr p nnt sn p .gsy as in 
the United States, becauseof local conditions, dealers must neces- 
sarily obtain high prices. Advantage is also taken of the demand . 
for novelties to calculate liberal profits. ■ ^ 

The Stores and Buildings. — The visitor to the pjiadpaLca^iit&la^ 
of the Latin American countries will be struck by the fact that 
many of the jjusiness building s are as modern in every respect as 
those of the great cities of the United States. The show windows, 
display fixtures, appliances, etc., are those that will be found in 
commercial establishments of a similar class at home. In th e 
s maller ^ com^^T^ltij^ however, a marked (iiflereiice is noticeable. 
The business houses there are freque ntly of only o^e_stiiry, and 
in the more remote places they are of the old Spanish style, with 
thick wal ls and small windag e. It is in the modernizing of this 
commercial feature that many opportunities exist. Americans who 
avail themselves of the possibilities in the readjustment to the new 
conditions will undoubtedly profit. 

Various Methods of Merchandising. — In consequence of increas- / 
ing competition, the c ommercial situation in Latin A merica is ' 
fast Incoming as complex as iD_the Un ited S tates. In order to 
make an intelligent effort for its trade a study of modern mer-y 
chandising methods is helpful. This can best be done by coa-^ 
sidering in sequence the various kinds of buyers. In the larger 
cities merchandising and importing generally are carried on in a 
manner very similar to that customary in the United States. The 
complexity of trade and the high plane which commerce has 
reached makes specializing more necessary than in the smaller 
communities. A study of the importers will help to make this 
problem more intelligible. 

General Importers. — One of the chief reasons why mailing lists 
of Latin America are so unsatisfactory is that merchants are fre- 
quently classified only under one heading, notwithstanding the 
fact that they may deal in a wide variety of products. The puj- 
(phases of gpnpral iniporter^ frequently funbrnce almo>st Q.yery t^on- 
ceivable kind of merchandise . In additio n to making such im- 
portations, this class of dealer will often be engaged in the rgpifir 
sentation of manufacturers on a commission basis, in banking or 



128 EXPOETING TO LATW AMERICA 

foreign exchange business, in placing insurance, and not infre- 
quently he will be actively engaged in industrial enterprises. Very 
often a retaii _as well a s a w holesale busines s is co nduct ed. This 
character of trading is common in the ports of lesser importance 
where only in rare instances dealers confine themselves to one 
branch of commerce. 

Wholesale Establishments. — Until , a comparatively r^fifiat date 
it was"'un u.sual for a inei Lhant, when engaged in wholesale trade, 
t o confine his e fforts to one class of merchandise exclusively , such as 
dry goods, notions, etc. However, trade development has wrought 
a marked change and in the capitals, such as Mexico City, Havana, 
Rio de Janeiro, and Buenos Aires, th£_niiniher-x>f-4iouses~devated 

excl usively to oneJdnJL^f mpmhanriisp is rapidXyUttm^flaiaipg. 

Industrial Establishments. — IiLJ2m]iy__places in Latin America 
the p roprietors of manufag turing plants are in position to mak e 
d iject impprtatio n. They are accustomed to look to the producers 
of machinery, tools, appliances, etc., and ajN£_unwillingJko_ dejpend 
njTinTi lopfll JTr^pnrtprs- Such establishments offer an excellent field 
for importers in certain lines. 

Railroad and Transportation Companies. — The railroad and 
transportation companies of Latin America are frequently con- 
ducted identically as are similar corporations in the United States. 
These institutions likewise m^kp. direct importations, and main- 
t^jn highly- flffipipnt pnrnhflsi pg flpp{^jtTpPr"ts through which their 
needs are supplied. These must receive special attention. 

Importers of Special Commodities. — Another group of buyers in 
Latin America are accustomed to make direct importations of their 
necessities. These include the h^pdlpr^c ; pf caa] , coke., fud , supp lies 
for ship-chandlers, etc. In this same category may be placed the 
conjjflptors and buihlers who make special contracts for large 
lots. 

Individuals Who Buy on a Large Scale. — I n practically eve ry 
cftUB^ in Latin America there will be found certain i ndividu als 
whose operations are so lar.g e that their needs and important prod- 
ucts and manufactures frequently exceed those of merchants. Such 
individuals make their purchases direct, and must be taken into 
account by American manufacturers and importers. 

Department Stores. — The department store of the American 
type, engaged in the sale of every possible article, does not exist 



THE MERCHANTS OF LATIN AMERICA 129 

in Latin America. The n earest approa ch to such stores has been 
the large j^etail dry goo ds establishments found in practically all 
the capitals. In l ate y earf^ (^dditign ft havp hppn mg rlp to the num- 
ber of the lines carried, but th e variety is not yet so l arg£,j.&JJiat 
of the department stores of the United Sta tes. T hese stores, n atu- 
rally, are importers . 

Betail Stores and Shops. — It is in t his branch of merchandisin g 
that the ^conditions in Latin America n iost nearly rpsernbJg_tJT<^sp 
in this c ountry. There are in the larger cities of Latin America 
a much larger number of individuals who conduct retail stores 
devoted to only one kind of merchandise such as dry goods, hats, 
groceries, liquors, etc. These firms make u p the bu lk of the jiyer - 
age mailing list and it is because of such names that much postage 

la WQgfp^^ pTrmjj^g, . Sr"^1^ pprPPnf^gP nf thp R f" dealprs ATP IT] _^ posi- 

tion to import , and therefore supply their requirements in the 
wholesale houses of the larger centers. 

General Stores. — In the rural communities, mining camps, and 
in the smaller port towns, the general store i s. found to the same 



PYtpTit as JTi thp TTnitpjj^taipfi. Here are sold all varieties of m er- 
cliaiidise and the extent of stork varies in direct proportioD to 
the po pulfltJ QD ^f the district served, the wealth of the possible 
buyers, and other conditions which determine the carrying of stocks 
in the United States. The more progressive dealers often act as 
supply depots for the smaller stores, tiendacitas, to which they sell 
at wholesale, as also to the it inera nt ^ merch ants who are quite 
important factors in certain countries. It is to these sources of 
supply that the small retailers or storekeepers make periodical visits 
(once or twice a year) to purchase supplies. Whether the general 
store can afford to import direct is dependent upon many circum- 
stances. The volume of direct purrhasfts mR^ft by p^^^^ fft^^^s is 
in©j:eaaing, b jit as a ^generaLniLe, es pecially in the inte rior, unless 
a very large volume of business is transacted the geneial dealer 
depends upon the large i mporter in one of the principal cities : 

JdajRets and ±*airs. — Jsioteworthy features of Latin American 
business, particularly in those countries having a large native 
population, are the markets and fairs. It is to these markets, 
usually held on Sundays although occasionally twice a week, that 
the natives flock, carrying with them their handiwork or products. 
The markets are generally large open spaces surrounded by struc- 



130 EXPORTING TO LATIK AMERICA 

tures which contain booths and shops, and here trading is carried 
on vigorously. The ingrkets are the cliief source oOhe ve getabl e 
supply for the community; here will also be found the thousand 
and one k nickknac ks which appeal to the fancy of the native ; 
including his s imple necessit ies, which in most of the republics 
form the chief staples of commerce. Fairs are held at intervals, 
and to these come natives and traders by thousands. 

The amount of business done at these annual or semiannual 
gatherings is often of a large volume, and the importance of the 
community is judged by the number of natives who come on 
market day. 

Consideration for Customs.— In order to enter fully into the 
(commercial life of the people, a knowl eflge of i■^^p^J^ lanornaq-p is 
indispensabl e. An attempt to do business through an interpret«f 
is usually a failure. Under any circumstances, even though the 
visitor does not speak Spanish, consideration should be shown 
for the methods and ideals of the people, to the extent of not arous- 

(jjjg their prejudice. Those concerns which have been most success- 
ful in establishing business in Latin America have been quick to 
take into caimde£^ion the tr aditions of tha-mpn with w hnn} ihpy 
dgalt and have treat£iiJih£m-.a§jnJbenig£n^ 

n^erchants . They have recognized that the likes and the dislikes of 
the Latin Americans are not those of the North Americans, and 
that the people had therefore to be Tpeasured by f\ diffe rent standq _rd 
fr om that ^rhich was applied to their own countrym en. 

In dealing with Latin American merchants, it is essential to 
av^ certain delicate questions. These are: Ippal or ri ^iona l 
poll tins ; the Eeligi^n of the people ; ref erence t o cust oms which may 

_seeiJt-st£ange or unusual; cor vnection with ^ mestionabl e claims or, 
c oncessions . 

'_> Some Important Business Customs. — In seeking to do business 

'with Latin American merchants it is also important to observe the 
customs which characterize business transactions of that people. 
The failure of Americans to win a foothold may frequently be 
attributed to a neglect of this vital factor. An analysis of the 
character of the Latin Americans is therefore desirable and can 
[_ best be accomplished by a consideration of their qualities. 

Conservatism. As a class their business men are extremely 
conservative. They r ecent be i y^g p^ ry ^pfldftd ftg-niTift thnir will to 



THE MERCHANTS OF LATIN" AMERICA 131 

make purchases and the traveler who pursues a contrary policy 
will find it disastrous. This is particularly true on c jmroh f>r 
natio nal holidays or at the periods when dealers nrp. unusually 
busy. 

Progressiveness. Despite their conservatism the Latin Americans 
appreciate progre ss and are willing to take advantage of the 
de velopment of scien op jn pvpry phasp of fldvanpem pnt. They offer 
a fine field for American enterprise but must be convinced that 
it is to their advantage to buy the article offered. 

Coydlty. One of the characteristics for which the people of 
the southern republics are noted is their trade loyalty. When 
pleased with the treatment they receive or with the merchandise 
they buy, it is very d ifficult for one c om ppfifor tn rliRlo f^gQ ari- 
other . For this tp^s ou rnrpfnl a ttention to first orders is es- 
sentiaL 

Reliability. As a class the Latin American merchant is reli- 
able and may be fT' iiste^ to fnlfiH hjg^o bligations. In many in- 
stances a verbal promise to an agreement is sufficient without 
further documents. Naturally there are exceptions to this rule 
but c ommercial honor is. on the whole, very high. 

Efficiency. Because of the complex tariffs, freight rates, etc., 
Latin American merchants are accustomed to r alcnlat.p very close ly, 
and as a result are among the best traders in the world. From 
boyhood they are trained in thomngh npss. It is conceded by 
manufacturers who are accustomed to do business both in the 
United States and Latin America, that the merchants of the latter 
field are f ar m ore effipi(i>nt than^ similar dealers in the domestic 
market. 

Begard for Culture. As a class the Latin Americans have a 

firm fj,rtiyfin nonrn nr)r| ^, ^ig^^^ vf^^ixv^ -fnr nnH-jjjfi^ literature, mUsic, 

and the fine arts than most Americans. As they are swayed by 
sentiment, their love or hate may be easily aroused. 

Politeness and Hospitality. The Latin American, even when re- 
luctant to buy, is extremely poli te, and much may be accom- 
plished by the alert rpprpspntativp who recognizes this fact and 
takes advantage of it by b eing equally poli te. The Latin American's 
reputation for hospi tality-is well deserved and he will go to great 
lengths for those whocome well recommended. 

Politeness in Business Relations. It is far easier to reason with 



132 EXPOETING TO LATIN AMERICA 

and_persuade a Latin Amerina. Ti Tner chant by courteous ar gument, 
than it is to cajole or drive him. He is as polite in his business 
relations as in his social intercourse and he naturally expects the 
same courtesies under both conditions. He is very appreciative of 
those who recognize his peculiarities and who try to meet his views, 
and he remembers any attempts to deceive or mislead him. On the 
other hand, once his confidence has been won it is difficult to 
undermine it. 

Obsexvance of Customs.. — As a concrete example of Latin Amer- 
ican politeness may be cited the custom of removing the hat when 
approaching a merchant, even when one recognizes a passing ac- 
quaintance on the street. A failure to observe this simple rule often 
brands a traveler as lacking in good manners and makes it far more 
difficult for him to get a hearing. 

The Resident Foreign Merchants. — Eeference has already been 
made to the large number of foreign merchants found in prac- 
tically all Latin American cities. Naturally they too a re influence d 
by the customs of the countries, and their business methods and 
ide as are in general those descri bed! This is easily accouirEed for 
inasmuch as clerks in the establishments are natives and frequently 
obtained their training in local business houses. When allowance 
is made for personality, and the characteristics of each race, ^for- 
eigner in Latin America may best be n pproached in \ h 9. genera l 
TnaTiTipr ih^i i > ngprl in snliVitiTior hnsinn r. r . fr a m tj i e native de aler. 

Business Hours in General. — The North American who visits 
'*~~Latin American countries for the first time will be impressed by the 
apparently leisurely manner of conducting business. The lack of 
the intensity so characteristic of the United States is evident even 
in the large cities. This is especially surprising to those who con- 
sider the hours devoted to business rather short. In the cities, 
bnpjji^S gpTi'^'^R l^j M '^^ ^ i T ' P n t ^ ^^ULux^r^Ji^V The storog arc clofticd at 
noo n for several JiQ^t^S r.PTn fining shut nnt.il 2-30 or 3 :00. The 
custom may seem strange but is due to the stringency of life in 
the tropics. The streets are generally deserted, consequently no 
sales are lost, and most Latin American business men take lunch 
at home." Very often the living apartment, even in the case of well- 
to-do merchants, is above the store. The favorite shopping hours 
are from three to six, and the offi cf^s o f many business establishments 
are open uatil 7 or 8. In the smalkr n toro s. as is the case in 



THE MEBCHANTS OF LATIN AMERICA 133 

the United States, the closing hour is sometime later. In temper- 
ate latitudes, the custom of closing does not prevail to the same^ 
extent, although there is a far gTeater_co n8ervation of ener gy 
throughout Latin America thaa_is the case in__tliQ_IInitfid_States, 
and this has been found decidedly advantageous. 

Value of Personal Relations. — Among the most successful repre- 
sentatives in Latin America are those who have shewn an unusua l 
interest in the personal relations of tb^iT pngtoTYiPrg It is time 
well spent to take note of the birthdays of the customer and his 
family, to be remembered later with letters, postal cards or small 
gifts. Furthermore, the dealer who is so remembered J jy a repre- 
sentative who later assumes charge of a foreign department and 
who continues the custom of writing, will feeLliimsfilf-iinder-strong 
obligations and can be held against even the most vigorous com- j 
petition. Innumerable instances are on record where this personal 
touch has maintained the loyalty of the importer against lower 
prices. Such remembrances may also be suggested for use upon 
fete days or other anniversaries which fill a very important part 
in the life of the Latin American people. 

How Business is Done. — Much has been written regarding the) 
business customs of Latin America and perhaps no phase of the 
relations with these merchants has been subject to more erroneous 
treatment. The prin^iplas-jof-daingJiiisiiiess are the same j&S' those 
which underlie commercial transactions in the Uni fpH Sfgfpg^ but 
naturally there is a di fference in application, based upon the funda- 
mental difference in character between the merchants of Latin 
America and those of this country. There is also a marked differ- 
ence between the business methods which prevail in the larger cities, 
where commercial affairs receive more attention, and transactions 
in the less important communities where business is carried on 
more leisurely. The exact method of approach varies with the 
character of the merchant but the experienced commercial traveler 
has found that i n the larger citin g thft glert, .progrfissive dealer 
wo uld resent the methods employed to wi n tl^g mnfirleTicft ai^d 
rpspp (^t of thfi Tpf ^rn hant in the smaU erJown. 

This applies with particular force to the custom, widely recom-7 
mended by some travelers, of making preliminary visits to present 
letters of introduction and gradually leading up to a discussion of 
business. This method is found highly successful in smaller towns 



134 iEXPORTING TO LATliST AMERICA 

but in the larger places (such as the capitals), the representative 
would find this means highly ineffective. 

Although conditions have undergone a marked change, especially 
in the larger cities where commercial affairs are at a higher tension, 
the principles applicable to domestic sales promotion apply with 
equal force to Latin America. The successful traveler will adapt 
himself to the circumstances that he finds, which are as dis- 

] similar in the southern republics as in the United States. Adapt- 

/afeility is the prime essential of a traveler. 

/— ^Business Details, — ^For the purpose of avoiding misunderstand- 

f ing, it is desirable that all ordprs pjpppd hy_-Lai.in AmpriVaTi TTipr- 
charita be si gned . The American firm will find it advantageous to 
instruct its representative, either local or traveling, Jo_kaiB a 
car}>on ropy of .the order_place d. on which the signature o f the 

( bu yer is also sh own. "N "p changp R should be made on the origin al 
order unless su ch are also made on ,j:h e du p licate . In this way all 
danger of misunderstandings may be avoided. 

Opportunities for Public Contracts. — With the extension of North 
A.merican financial assistance to Latin America, the opportuni - 
ties-Jo-r citizens of the United States to obtain national^ state and 

Trmr)2pip^1 nnnfr^pfa bcCOme t^^p Tinmprmi^ Naturally, thcSO CaU 

qnl^ be obtained by__ a^ repres entative on the ground who is familiar 
with all the details and procedure necessary. In general, such un- 
derfekings are profitable, but the interests of the contractor should 
be safeguarded. 

Factors to Consider in Public Work. — Because of local condi- 
tions it is essential in submitting bids, or in making estimates for 
public work, to take into consideration not alone the financial con- 
dition of the municipal, state or national government, but other 
important factors which may result in loss of profits. One of 
these is the fl uctuations in exchang e, for it is evident that if settle- 
ment had been fixed upon a day when the quotations were unfa- 
vorable to the contractor, serious losses might follow his nonpay- 
ment. For such eventualities a margin should be allowed and every 
item in a bid should be subjected to scrutiny as well as to severe 
check. 

^ Safeguarding Customs Duties. — The contracts made with Latin 

\ American countries, whether of a national, state or municipal 

nature, often require that duties be paid on the materials im- 



THE MEECHANTS OF LATIN AMERICA 135 

ported. Such duties are later refunded, but unless extreme caution 
is observed and the contracts are carefully drawn by lawyers with 
a knowledge of local procedure, obstacles may be placed in the way 
of their return. The ^^^tJQg of fi^^V>pnT^^-rap^^^ must be carefully 
watch ed as it frequently happens that subcontractors are not suffi- 
ciently provided with capital and may become involved to such an 
extent that concessions or contracts are endangered. 

Payments for pub lic work arp. often ma dp out of a hnrjfrpf q11ow- 
ance and the contractor must make_ce rtain that his contracts are 
provided for in the bud get_jipprovpd hyjjie national l e^slature 

or state assembly. A very definite understandi ng regarding pay^ 

.mt^iitt; , and particGlarly as to th e money in which settlement is 
to be made, should be insisted upon before contracts are signed. 
Because of the depreciated currency in some of the republics there 
should be no question as to what money will be used for payment. 

Leg-al Conditions in Latin America. — Legal systems of the 
Latin American republics are, in general, based o n the old Roma n 
la ws ^nd the Code Xapoleon has also influenced the passage of 
many laws. While there is a great similarity in the laws of the 
twenty republics, nevertheless they vary materially and the pro- 
cedure in general is complicated. The theory that all legal pro - 
ceedi ngs must be w rittf?n holds gf^od ^"^ ^ ^^^^y largp pxtput It is 
c ustomary to use the official stamped paper in the preparation of 
documents and the notary public who must attest to the genuin e- 
ness of the document is an important figure in Latin American 
legal proceedings. Because of the complicated system IgwyPT^"- 
s hould always be selected wi th great care , , and the recommendation 
of banks or other trustworthy authorities should be required. The 
s ervices of lawyers in the preparation of contracts for public wor k 
|p PQppr^iglly nrnronf. bccause of the possibility of embargoes being 
placed on work in process in consequence of the failure of a local 
contractor to comply with necessary stipulations or because of his 
lack of funds. 

Commercial Registration. — In the appointment of local agents; 
or the opening of branch offices it is essential to take into consid- 
eration local, state and national laws. In p ractically all the repub- 
lics a registration of some sort must be filed by anyone eng a g ing, in 
business, ce rtain books must be kept according to law and sta mped^ 
9,ri5tervals by specified authorities.. Inasmuch as the account 



136 EXPOETING TO LATIN AMEEICA 

books are not legally recognized unless properly stamped, it is essen- 
tial that all legal regulations be carefully followed to insure collec- 
tion of possible claims that it may be necessary to file. The regu- 

_ lations regarding licenses, the payment of taxes, etc., should all be 
looked into at the outset to avoid embarrassing complications. 
Power of Attorney Important. — The importance of documentary 

/evidence of authority cannot be overemphasized. Throughout 
Latin America a power of attorney, properly executed, should b e 
furnished to anyone who may be called up f^n to ^^^ gm'pTcly in tVip 
interests of another. The showing of a power of attorney may 
frequently result in important saving, both of money and time. 
When any matter requiring the attention of a lawyer is forwarded 
to Latin America for attention, and especially when legal action 
is necessary, a power of attorney should invariably accompany it. 

; T his document should be ver y_specific a^irl pbo^ilrl stfltp. fully the 

i e ^nt of the a uth o rity which i lia-dfifii red to grant^ It is custom- 
ary in the preparation of a power of attorney to have it bear the 
signature of the grantor, to which is affixed an acknowledgment of 
a notary public, the latter's signature then being attested by the 
clerk of a local court, whose signature in turn is witnessed by a 
consul of the country to which the power of attorney is to be sent. 
In some cases it may prove advisable to have it viseed by the Sec- 
retary of State at Washington and in turn by the Minister or Am- 
bassador of the Latin American republic in Washington. 

The Mining Laws of Latin America. — The laws relating to min- 
ing operations differ greatly in the various republics. In some in- 
stances they are extremely favorable, but in others there is a consid- 
.erable element of risk. In^ general they are bg ^ed on a Ry steTn of 
r egistration, a claim being denounced and then worked subject to 
tie payment of certain taxes. A danger that must be guarded 
against is that of possible legal proceedings after the mine has been 
developed and is approaching a profitable stage, this being accom- 
plished by the filing of claims and the beginning of legal proceed- 
ings which often become very complicated. For this reason, as in 
the case of all matters likely to become subjects of local procedure, 
the ^figdc cc of tho boot law^^or obtainable shon J 



CHAPTER IX 

CORRESPONDENCE WITH LATIN AMERICAN MERCHANTS. REC- 
ORDS AND FILING 

Introduction. — In transacting business with Latin America, 
proper methods of correspondence will be found valuable aids to' 
success. So important is letter writing in the conduct of domestic 
commerce that whole volumes dealing with only this topic have 
been written by authorities. Many firms wnich haYe..ljeen very 
successful in the Latin American field attribute their growth, 
largely to the painstaking care witE which they have conducted/ 
this department of their business. 

The Importance of Lang^ag^es. — ^As so much has been said and 
written relative to the use of the language of a people in com- 
municating with its merchants, it seems almost trite to refer 
to it. Every effort should be made to address the buyer of Latin 
America in his own language — that is, Spanish to all countries 
save Brazil, where Portuguese is spoken, and Haiti, where French 
should be used. In this connection, the importance of differen- 
tiating between Spanish and Portuguese must be emphasized, as 
there is a marked dislike on the part of Portuguese-speaking peo- 
ple to have their tongue confounded with Spanish. 

Why Spanish Will Always Be a Great Factor. — The population/ 
of the twenty Latin American republics today is 50,000,000; in 
1920 it will probably be 65,000,000; in 1950, 90,000,000. It is 
evident, therefore, that this great body of people will continue to 
use Spanish indefinitely, and it is unreasonable to assume that a/ 
people, accustomed to a language so beautiful and with suchV, 
great traditions, will adopt the English tongue. 

Conforming to Latin American Standards. — In dealing with the / 
Latin American people it must be remembered that they are a 
different race from ours with utterly distinct ideas and ideals, 
the opposites, in temperament, of the Americans. To do business 
with them successfully, it is necessary to approach all matters from 

137 



138 EXPOETING TO LATIN AMERICA 

their point of view and to conform as closely as possible to their 
standards. The peculiarities of the Latin American people must 

(^h^ known and recognized. 

^__How Latin Americajis Regard Letters. — ^Because of distance, 
difficulty of translation, and the infrequency of mail in many 
places, correspondence is looked upon as a most important art. In 
the business life of the Latin American merchant, letters are events. 
Until a very recent date, Latin American business houses were 
not accustomed to receive the masses of printed matter that deluge 
the average American business man. It is still the case today in 
the remote places. For this reason, merchants are accustomed 
to view letters much more carefully than the American dealer. 
They accordingly scrutinize and criticize more severely than do 

j business men in the United States. 

Training for Letter Writing. — The young business man of Latin 
America is early taught the importance of correspondence, and 
in the apprenticeship that he is accustomed to serve he is given 
a special training therein. Neatness, care in composition, and 
accuracy are exacted, and most letters, even from merchants who 
have but a limited education, are far more carefully written than 
is the case in this country. As an example of the importance 
accorded letter writing may be cited the custom which obtains in 
many Latin American business houses, where the heads of the 
firm still frequently use the typewriter and themselves write let- 

V ters, particularly the more important and confidential ones. 

- The Importance of Stationery. — The importance of proper sta- 

i"^ — 

tionery is even greater in the case of Latin American correspond- 
ence than in domestic correspondence. Eemembering that the 
distant importer's confidence must be won ere even a trial order 
is sent, the careful American exporter should make sure that the 
stationery which carries his sales arguments is not of a character 
to prejudice his prospective customer and create the impression 
of slovenliness or carelessness. Because of the high rate of postage 
the paper selected should be light but very firm, and it will be 
found economical to select a stock that will properly impress the 
recipient even though the price may be higher. Extremes in 
printing, designs, and color should be avoided and the very best 
mechanical effect, that is, the typing, should be insisted upon. 
The stationery used for domestic correspondence may be used, but 



LATII^ AMERICAN CORRESPONDENCE m 

occasionally the words "Foreign Department" or "Latin American 
Department" are added, and even the name of the manager. The 
code used for cabling and the cable address should never be omitted. y 

Attention to Little Details. — The proper addressing of letters 
can be greatly aided by making sure of the country. To that end 
the foreign department should be permitted to see not only every 
letter, but the envelope in which it comes. When the name of 
the country has been omitted frorii the letterhead, which often hap- 
pens, the stamp will supply this deficiency. 

Literal Translations Should Be Avoided. — ^A serious objection to \ 
many letters written by American houses, even though in Spanish, 
is that they are literal translations. The result is fearful and won- 
derful to behold. When a letter is drafted in English, and given 
to a Spanish-speaking clerk for translation, it should be with in- 
structions to do it in idiomatic Spanish. In this connection, the 
importance of having a well-educated clerk should be emphasized. / 
Many manufacturers employ young men whose native language IsT 
Spanish but who, because of lack of training, particularly in busi- 
ness correspondence, cannot render adequate service. If the manu- 
facturer himself does not speak the language, he should satisfy 
himself that the clerk is competent in order that his letters may 
not be held up to ridicule. 

Various Faults in Letter Writing. — The Latin American people7 
who are accustomed to attend to their business as to their ordi- 
nary pursuits — in a leisurely manner — object vigorously to the 
terse, blunt form of correspondence so much in vogue in the United 
States. This is because they are used to the other extreme — 
a more extensive salutation, thoughtfulness, a delicate touch, and 
what might even be considered a florid close. The average letter 
received by the Latin American merchant fails to impress him as 
it should, and he is often completely at a loss to account for what, 
in his estimate, amounts to a lack of respect or good breeding. 
Another cause for much criticism of American letters has been 
the employment of slang or idiomatic trade phrases peculiar to 
this country. These, whether literally translated or used as in 
the United States, are utterly unintelligible. Impolite or im- 
perative phrases, which so frequently creep into American busi- 
ness letters either because of lack of education or in consequence 
of the haste in which business is conducted, are always extremely 



140 EXPORTma TO LATIN AMERICA 

disagreeable to the sensitive Latin American. The omission of 
such titles as Mr. or Messrs., that is, Sr. or Sres., is another source 
of criticism. The Latin American is extremely punctilious and 
resents the omission of the prefix in correspondence. The signa- 
ture which is stamped instead of written also arouses his ire. 
Form letters are instantly recognized, and if it is desired to build 
a permanent business of any volume they should not be used. An- 
other serious fault for which American letters are condemned is 
the use of a signature "Per ," instead of the actual sig- 
nature of an official, accompanied by his title. It will invariably 
prove advantageous to use the signature of one of the heads of 
jthe concern. 

r^ Portugniese in Correspondence with Brazil. — Reference has 
already been made to the fact that Portuguese is the native lan- 
guage of Brazil. The Brazilian, like the Portuguese, is very proud, 
and considers his own tongue superior to Spanish. The general 
rules relating to correspondence with the Spanish-speaking coun- 

/ tries apply with equal force to Brazil. 

Use of Other Languages. — It is natural to assume that the 
language of the country should be used by exporters in business* 
correspondence with Latin America, even though with houses of 
foreign extraction, such as German, French, Italian, English, etc. 
However, it not infrequently happens that such foreign houses 
prefer to correspond in their own tongue. In such cases, where 
the preference can be ascertained, advantage may be derived from it 
by the American exporter who recognizes this preference. It may 
be laid down as a general rule that, with the exception of Brazil, 
Spanish should be used in business letters, even where the princi- 
pals of the firm are of other nationality, since many of the em- 
ployees are natives and letters should be intelligible to them. Let- 
ters in English are permissible when addressed to English or 
f^jAmerican firms whose correspondence is written in that tongue. 

^ .Promptness a Necessity. — In conducting correspondence with 

Latin American dealers it is highly important to recognize the 
necessity of promptness. This is so essential because of the time 
required for letters to reach their destination and the delays to 
which they are subjected in transportation. Tardiness in mail- 
ing documents covering a shipment or in advising the importer 
of its dispatch may prevent its prompt clearance through the 



LATIN AMERICAN CORRESPONDENCE 141 

custom house. A failure to acknowledge promptly receipt of an 
inquiry or request for quotation may result in the loss of an 
order. The enterprising importer in Latin America is quick to 
recognize and to reward his American correspondent who attends 
promptly to his inquiries and orders and such attention will result 
in increased business. "^ 

Letters and Circulars in English Wasted. — So much has been 
written on the subject of sending advertising matter in English to 
Latin American countries that a repetition seems almost needless. 
While a considerable number of merchants in all the Latin Ameri- 
can republics read or speak English, the great majority do not. 
The effect of letters and advertising matter in English may be 
understood when it is realized how few American houses could be 
induced to buy from French, Spanish, or German circulars and 
catalogs, particularly if the quotations and prices were in the 
monetary standards of the foreign country where they originated. 

The Use of Follow-up Letters. — To those who are unacquainted 
with Latin American trade and wonder whether the American 
system of follow-up letters may be used to advantage in dealing 
with the southern republics, an affirmative reply may be given, 
as the principles underlying the solicitation of business there dif- 
fer in no essential from the American. There are, however, wide 
differences in the application of the follow-up and a considerable 
business is now being done as a direct result of correspondence. 
When the conservatism and natural suspicion of the Latin Ameri- 
can merchant toward unknown firms is considered, and it is 
remembered that his experiences with American houses have fre- 
quently been unfortunate, the value of an intelligent follow-up 
system is apparent. 

The Kind of Fallow-up Letters. — Quality and not quantity is 
preferable in follow-up work with Latin America. Just as the 
merchant of the southern republics judges critically the original 
letters he receives from his North American correspondents, so 
does he look upon the follow-up. It is foolish to assume that 
he is unaware of the system being used, and that anything will 
do to awaken his interest. Even the smaller merchants in the 
less important places have been receiving occasionally for years 
the literature of American firms. As in the case of printed mat- 
ter in the XJnited ^tates^ this has been of varying degrees of 



142 EXPORTING TO LATIN AMERICA 

excellence, and the educational work which has been done in this 
way makes it possible for the dealer in Latin America to dis- 
criminate easily between what is good and what is deficient. As 
the Latin American merchant is keenly appreciative, it will be 
readily seen that greater returns would follow a well considered 
follow-up campaign directed to a limited and selected number of 
names, than from an inefficient, indiscriminate circularizing of a 
large list, with letters of a low standard, lacking from every stand- 
point, in composition, execution, etc. As in the case of domestic 
follow-up work the necessity of constant experiments is evident. 
Letters should be carefully tried on groups of names and tabu- 
lated records of results should be kept. Letters and circulars 
should be changed as circumstances dictate in order that maximum 
efficiency may be obtained. Sufficient time and thought should be 
given this matter to insure adequate results. 

Details in Mailing Important. — The inadequate system of many 
f American houses frequently results in the omission from letters 
of price lists, quotations, circulars, etc. Catalogs, too, are often 
overlooked. The necessity for adopting a method which will in- 
sure the sending of all items referred to in correspondence is more 
evident when the factors of time, distance, and expense are con- 
•^ sidered. For a letter to reach its destination in Chile or Argen- 
^tina requires fifteen to twenty-four days, and for a reply a similar 
period may be calculated upon. It is easy to understand the 
attitude of a merchant who has written for, and needs urgently, 
a quotation or a price list and catalog. The failure of an Ameri- 
can house to forward printed matter to which reference is made 
in a letter, or to make a quotation, has resulted in orders being 
given to a more careful foreign competitor of whom quotations 
were simultaneously requested. 

How to Insure the Mailing of Inclosnres. — Various methods 
have been suggested to safeguard the sending of inclosures re- 
ferred to in letters. These depend largely upon the size of the 
establishment. A safe rule to follow is to have the stenographer 
made responsible for the sending of inclosures. If it is necessary 
to have these sent from the advertising or any other department, 
a simple method of checking should be adopted whereby the mail- 
ing clerk insures that catalogs are forwarded the same day that 
the letter is mailed. 



LATIN AMERICAN" CORRESPONDENCE 143 

The Importance of Prepaying Postage. — One of the complaints 
most frequently made against American manufacturers and ex- 
porters is that of failure to prepay fully the postage. In most 
instances, this is due to carelessness on the part of employees, 
insomuch as the manufacturer who makes an earnest effort to 
gain South American trade would not deliberately overlook such , 
an important point. The greatest care should be exercised that 
all letters and printed matter of every description carry the 
requisite amount of postage, otherwise a fine is imposed at desti- 
nation, and this is for double the amount of the shortage. The 
rates of postage to South America are as follows: 

First-class mail, that is, letters and all sealed envelopes, 5 cents 
for each half ounce. 

On second-class (printed matter), one cent for two ounces. 

One method of guarding against short postage which has 
proved very successful is that of having the stenographer mark on^ 
the envelope when writing the letter a figure 5, which will draw 
the attention of the mailing department to the necessity of plac- 
ing thereon a five-cent stamp. Another method that has been 
equally successful is to have envelopes^ printed with a special mark 
where the stamp is placed^. which will also make oversight less fre- 
quent. To guard against short payment of postage many firms use 
stationery of a different color for foreign correspondence. 

Proper Construction of Sales Letters. — The construction of sales I 
letters to Latin America should be considered with even greater 
care than are similar communications in the United States where 
their importance has long been recognized. The dealer who solicits 
a quotation can more easily be induced to buy if the advantages 
of an article in which he indicates an interest are presented in 
a clear, logical, forceful manner. It must be remembered that the 
prospective buyer is in a distant country, and that in addition to 
the freight charges incurred by the long voyage, numerous out- 
lays for duty, custom agents, interior freights, and handling must 
be incurred before he receives the shipment. As this makes for ,. 
conservatism, descriptions should be full, simple, clear, and writ- 
ten in the most logical manner in order to win the complete con- 
fidence of the importer. It is unreasonable to expect adequate 
returns if much is left to the imagination of the recipient or 
merely stereotyped phrases are used. Prices and discounts should? 



144 EXPORTIKG TO LATIK AMERICA 

also be quoted with extreme care in order that quotations may 
not get into the wrong hands, that is, firms or individuals whose 
purchases would not entitle them to wholesale prices. Orders are 
sometimes sent to manufacturers by individuals who wish to pur- 
chase only for their own account ; if such orders come to the knowl- 
Sige of wholesale importers, the latter will not patronize the firms 
ho sell to those whose trade they consider rightfully their own. 
The "Use of Sales Arguments. — The selling of merchandise by 
mail is fast being placed on a scientific basis. In no other ac- 
tivity in connection with export trade is it so important to apply 
scientific principles, and this must be done with the Latin Ameri- 
can point of view always in mind. Letters that are written for 
the purpose of selling merchandise should strongly emphasize the 
advantages of articles which it is sought to export and the pros- 
pective buyer should be given a clear, easily understood state- 
ment of the features and purposes of the article offered. As the 
cost of correspondence with Latin America is so much greater than 
in the domestic field, the highest efficiency should be sought in 
order that waste in postage, printed matter, and stationery may 
be eliminated. 

r.^ Why Technical Terms Should Be Avoided. — In addition to 
avoiding slang, the manufacturer should use as few technical or 
trade terms as possible. This is because such terms are difficult 
to translate and not readily understood by the average reader. 
When it is absolutely necessary to employ technical words the 
manufacturer should safeguard his description by submitting them 
to a technical native expert familiar not only with Spanish but 
particularly with the trade, profession, or art in which the tech- 
nical words are used. The most painstaking care in this mat- 
ter will result in greater clarity of description and consequent bet- 
ter results from the printed matter. It is far better to authorize 
a free, easy translation which conveys the full meaning, than to 
confine the translator to a literal rendition of difficult subject- 
matter. "Very few catalogs in any technical line are intelligible in 
a foreign language, even to experts. In order to obtain the best 
results it should be assumed that the recipient of correspondence 
or printed matter possesses no knowledge whatever of the subject, 
and therefore all details should be made absolutely clear and in- 
telligible. This applies not only to terms, discounts, and descrip- 



LATIN AMERICAN CORRESPONDENCE 145 

tions, but to standards of measure and value. In many instances 
widely used trade terms and classifications possess distinct mean- 
ings in other countries; hence they should be so expressed that 
there is no possibility of error or misunderstanding. A safe rule 
to follow is that of insisting upon absolute clarity and completeness 
in expression. 

Aids to Correspondence. On page 466 will be found lists of 
books relating to correspondence with Latin America. These will 
prove of value to the Foreign Coriespondence Department, as will 
also the lists of technical dictionaries, etc., listed on page 467. 

The Importance of Keeping Records. — In building a business 
with Latin America, much work must necessarily be done which 
brings no immediate results. If the greatest benefits for the money 
expended in correspondence are desired, proper filing and record 
keeping are indispensable adjuncts. The use of the material accu- 
mulated in correspondence over a period of years is invaluable, and 
should be kept in such a form as to be quickly available for con- 
sultation, especially to place before a traveler about to make a i 
first trip. 

Cards, Files, Etc., to Be Used. — In beginning foreign trade, pro- 
visions should be made for a mailing list. This can be most easily 
kept on cards, and for general purposes two sets of such cards will 
answer. First, the names of prospects, which are obtained, from 
time to time, through various sources. This should be known as 
the unverified list, for as business goes on it will be found that 
many such names are only sources of expense. The other file 
should be known as the verified list, and in this division are placed 
the names of firms of whose existence, desirability, and responsi- 
bility there is no doubt. Such names are those of actual buyers, 
concerns who write for catalogs and are found desirable dealers, 
houses visited by salesmen or whose names are supplied by gen- 
eral and local agents, banks, or other approved and reliable sources 
of information. It will be found highly desirable to keep the two 
groups separate. As the cost of obtaining names varies from a 
few cents to thirty or forty dollars each, the need of care is more 
evident. 

The Character of Cards to Be Used. — It is impracticable to sug- J 
gest a particular form of card, as this will vary with the business. 
Generally speaking, room should be left for entering the pur- 



146 EXPORTlNa TO LATIJT AMEEICA 

chases from year to year and other data which will prove of value 
to the sales department. Another form of report which it is highly 
desirable to use in connection with the mailing list is that which 
is supplied by the traveling salesman after visiting dealers. Such 
reports are filed according to towns, articles, or names of dealers, 
as may best meet the requirements of the particular business. By 
binding these in loose-leaf holders they will be found of great 
value for quick consultation, follow-up work, and conferences with 
salesmen. Such forms may also be used in connection with local 

(jQr^general agents. 

^-^Tlie Importance of Properly Filing Letters. — In most business 
\ houses the importance of properly filing letters has long been un- 
derstood. This is of even greater importance in doing business 
with Latin America, because of the strangeness of the names and 

Ltjie greater possibility of error. The proper filing of correspond- 
ence with Latin American merchants is of such value and the 
advantages of quick reference are so great, that it should be in- 
trusted to a person of more than ordinary intelligence, who may 
be held to strict accountability. Where a Spanish stenographer 
is employed, the filing of letters should invariably be intrusted to 
him. 

^^ Some Specific Examples of Proper Filing. — For the purpose of 
simplifying the matter of filing, the following specific examples are 
given in order that this may be more readily understood. These 
examples will take the place of an extended article which would 
be more difficult of comprehension. 



SPANISH FOEM ENGLISH EQUTVA- HOW TO FILE 

LENT 

Sr. Juan Fernandez Mr. John Fernandez Under Fernandez 

Sra. Juan Fernandez Mrs. John Fernandez " " 

Srta. Dolores Fernan- 
dez Miss Dolores Fer- 
nandez " ** 

Sres. Juan Fernandez 

y Cia. Messrs. John Fer- 

nandez & Co. " " 

Sres. Fernandez Her- 
manos Messrs. F. Bros. " ^ 



LATIN AMERICAN CORRESPONDENCE 147 

SPANISH FORM ENGLISH EQUIVA- HOW TO FILE 

LENT 

Sree. Juan Fernandez 

e Hijos Messrs. J. F. & Sons Under Fernandez 

Sres. Sucrs. de Juan 

Fernandez Successors of John 

Fernandez " ** 

Sres. Sobrinos de Juan 

Fernandez Nephews of J. F. " " 

Sra. Yiuda de Juan 

Fernandez e Hijos Mrs. Widow of J. F. 

& Sons " " 

Fernandez y Gonzalez F. and Gonzalez " 

Fernandez y Gonzalez 

S. en C. F. and Gonzalez 

Limited " 

Fernandez y Gonzalez 

S. A. F. & G. Joint Stock 

Co. 
Sr. Juan Fernandez y 

Obregon Mr. John Femandez- 



u 



Sres. Fernandez y 

Obregon Messrs. Fernandez 



Obregon 

'essrs. '. 
and Obregon 



La Compania Sud 
Americana de Ya- 
pores The South American 

Steamship Co. " Sud 

La Compania Manu- 
facturera de Zapatos 
de Habana The Havana Shoe 

Mfg. Co. " Manufacturera 

El Ferrocarril Central The Central Rail- 
road " Central 
La Perla del Oriente The Pearl of the 

Orient " Perla 

Abbreviations Used in Spanish.— In the following table theFe'^ 
are listed some of the principal Spanish prefixes, suffixes, andj 
words used in correspondence, together with their abbreviacj^ 
tions ; 



148 



EXPORTING TO LATIN AMERICA 



SPANISH 


ABBEEVIATIONOF 


ENGLISH EQUIVA- 








LENT 


Sr. 




Senor 


Mr. 


Sres. 




Senores 


Messrs. 


Sra. 




Senora 


Mrs. 


Srta. 




Senorita 


Miss 


La 




Article (feminine) 


The 


El 




Article (masculine) 


The 


y (Used in 


certain 


Conjunction 


And 


e cases for 


euphony) 


Conjunction * 


And 


Cia. 




Compania 


Company 


Hno. 




Hermano 


Brother 


Hnos. 




Hermanos 


Brothers 


Hnas. 




Hermanas 


Sisters 


Hijo 






Son 


Hijos 






Sons 


Sobrino 






Nephew 


Sobrinos 




« 


Nephews 


Sucrs. 




Sucesores 


Successors 


Vda. 




Viuda 


Widow 


S. en 0. 




Sociedad en Coman- 








dita 


Limited Partnership 


S. A. 




Sociedad Anonima 


Joint Stock Co. 


S. S. S. 




Su Seguro Servidor 


Your loyal servant 


Su afmo. atto. 


S.S. 


Su afectismo atento 


Your affectionate at- 






seguro servidor 


tentive loyal serv- 
ant 


Q. B. S. M. 




Que besan su mano 


Who kiss your hand 



The Portuguese words and abbreviations are very similar to the 
above. 

Prefixes. — Extreme care must be taken that the correct prefix 
is used. If the Latin American firm composed of Garcia y Alvarez 
(Smith and Jones) is addressed "Sr. Garcia y Alvarez," it reflects 
greatly on the intelligence of the American exporter. In many 
Latin American countries the use of the mother's name in addi- 
tion to the surname is very common. For that reason, it is essen- 
tial to distinguish between such combinations as Sr. Juan Fernan- 
dez y Obregon, which corresponds to Mr. Juan Fernandez-Obregon 
(Obregon being the mother's name, or that of another relative), 
and Sres. Fernandez y Obregon, which means Messrs. Fernandez 
and Obregon. Indexing in such cases must be done under the 



LATIK AMERICAH CORRESPOlSrDENCE 149 

first name. The prefix Sucrs. is occasionally met with, its mean- 
ing being "Successors of/' and is adopted by firms who wish to 
capitalize the standing and good will of their predecessors. In 
filing, letters should be placed under the name of the firm, as, 
Sucrs. de Alvarez Hnos. should be filed under Alvarez. Another 
prefix, Vda., or widow, is often noted. Such letters should not 
be filed under the word "widow," but under the name of the de- 
ceased husband ; thus Dolores, Viuda de Sanchez, should be indexed 
under Sanchez. 

Articles. — The use of the article in Spanish is very common. 
The word corny ania, which corresponds to "company," must al- 
ways be preceded by the feminine La. Thus the South American 
S. S. Co. becomes La Compania Sud Americana de Vapores; also 
La Perla del Oriente, the Pearl of the Orient, a store name. In- 
dexing must never be done under the prefix, but under the name 
of the qualifying adjective, as Sud in the first instance and 
Perla in the second. The masculine El also has its place; thus the 
Central Railroad Co. becomes El Ferrocarril Central. 

Conjunctions. — The conjunction occurs very often in firm names 
and should be properly used. Generally it is the letter y (and), 
but sometimes for the sake of euphony the letter e is employed. 
Letters must never be filed or indexed under the conjunction. 

Suffixes. — In correspondence with Latin America suffixes are 
frequently used. Sometimes the abbreviation Sucrs. appears after 
rather than before the firm name. The letters S. A., meaning 
Sociedad Anonima, are very common, being a form of business 
articles corresponding in a measure to a corporation or joint 
stock company. The letters S. en C. are for Sociedad en Coman- 
dita, which, broadly translated, means "Limited Partnership:" 
When such partnerships are found in Latin America it is often 
the custom to include an individual whose interest is a limited 
one and when the articles are filed before the proper authorities 
the amount of his liability is registered. The liability of the 
silent partner- is thus limited to the amount of the sum legally 
registered, no matter what may be his private fortune. This is 
a very common practice in Latin America. When letters are in- 
dexed suffixes must be disregarded. 

Addressing. — In addressing letters the necessity for the singular 
or plural is indicated by the general firm name. 



150 EXPORTING TO LATIN AMERICA 

Salutation. — This varies in form but in general a cordial one is 
preferable. "Dear sir'' or "Gentlemen" are often followed by 
"Friends" (Amigos) : thus, Muy Sres. mios y amigos, or Muy 
estimados Sres. y amigos. Esteemed Sirs and friends. The Latin 
American is by temperament very appreciative and no danger is 
incurred by cordiality. 

The Close. — Although greater brevity now marks the correspond- 
ence of the larger business institutions than formerly, it will be 
found that the majority of business men in Latin America look 
with favor upon a florid close. The custom of closing letters with 
the curt "Yours respectfully" has not been widely adopted and it 
is by far the safer plan to end more cordially. Characteristic 
closes of this character are: "Please accept the sincere assurances 
of our very highest regard and if we can serve you in any way 
do not hesitate to command us." "We beg to convey to you 
assurances of our high appreciation and to place ourselves un- 
conditionally at your orders." In place of the usual "Yours truly" 
there are used the letters 8. 8. 8. or 8u afmos. atto. 8. 8. or 8u 
afmos. amigos y attos. 8. 8. These phrases are translated in the 
vocabulary and are sometimes followed by the letters Q, B. 8. M., 
"Who kiss your hand," although the latter form is not now so 
common. While a happy medium may be reached, it is safer 
to err on the side of cordiality than abruptness. A study of Latin 
American business correspondence will not only be found highly 
valuable from a practical standpoint, but of intense interest as 
well. 

Miscellaneous Information. — In order to determine the time 
required for letters to reach the principal Latin American coun- 
tries, a table on page 526 of the Appendix will be found useful.- 
On page 524 there will be found the details of the money order 
fees to countries, the countries in which they are payable, the 
use of reply coupons, and the countries in which they may be 
used. ,A list of aids to correspondents will be found on page 466. 



CHAPTER X 

HANDLING OF ORDERS. PACKING AND MARKING. MARINE 

INSURANCE 



HANDLING OF ORDERS 

Introduction. — In the past much negligence and willful substitu-( 
tion have marked the filling of Latin American orders. Many- 
American manufacturers have proceeded on the assumption that 
anything was good enough for the importers of the southern re- 
publics, whereas in reality they are often even more critical than 
the merchants at home. This is naturally due to the fact that 
shipments from abroad incur heavy outlays for freight and duty 
which materially increase costs. 

All orders from Latin American countries should be filled with 
the utmost care and this is especially true of first orders; even 
though small, they often lead to important business. Further- 
more, the methods of the manufacturer and his real attitude to- 
ward export business will be measured by the manner in which 
first orders are executed. For this reason, also, shipments should 
be made promptly. In the event that items are not in stock 
and a delay is inevitable, the dealers should be notified immedi- 
ately; there is no possibility of building a business in Latin 
America if orders are held without notification of the importer. 
Substitutions should never be made without the sanction of the 
purchaser, as the latter resents any changes made without his 
permission and serious difficulties often arise because manufac- 
turers do not observe this simple rule. 

The Effect of Carelessness. — Carelessness in important detaiFs, / 
such as the omission of weights, particularly of packing mate-' 
rial, is also productive of difficulties. Importers frequently com- 
plain that the material used for packing weighs more than the 
amount specified in the consular invoice, and misunderstandings 
with customs officials naturally arise. The sending of merchandise 

15X 



152 EXPOETING TO LATIN AMEKICA 

which is different from that ordered is likewise the direct cause 
lot loss of customers. As an instance of this nature may be cited 
the experience of a South American firm which ordered six auto- 
mobiles of a certain grade, for which it had contracted with the 
understanding that they were to be 25 horsepower each. The 
American manufacturer, instead of writing that the exact machine 
specified was not on hand, shipped six machines of 30 horsepower 
each, and billed them at the increased price. As the transaction 
in question was a contract between the importer and his govern- 
ment, the former suffered loss and naturally will be careful to 
avoid further transactions with the same manufacturer. 

Tlie Importance of Packing. — There is no element in connection 
[with the development of Latin American business that has been 
the subject of more caustic comment than that of the packing 
employed by American manufacturers. American Consuls, trav- 
elers in Latin America, and merchants themselves for many years 
have complained bitterly regarding the carelessness and the appar- 
ent unwillingness of American manufacturers to observe specific 
instructions and recommendations in this particular. The great 
superiority of European over American packing has frequently 
been quoted. However, a distinct improvement has occurred dur- 
ing the last few years, and it is apparent that American manu- 
facturers are now giving this subject far more consideration and 
study than was formerly the case. 
^ Directions Should Be Followed. — The business man who studies 
"^ conditions in Latin America realizes why such particular instruc- 
tions accompany the orders and knows that they would not be 
given without good cause. If the manufacturer is told to supply 
certain weights, such as gross, tare, and net in kilos, he should 
do so; if unwilling to give this information, he should make 
( no attempt to do business in Latin America. If instructed to 
limit the size or weights of his packages, he should likewise 
comply or make no shipment. Such factors as tariffs, and land- 
ing and transportation facilities influence the giving of these 
directions, and a failure to observe them is unpardonable. A 
careful study of the basic conditions will make even the most 
obtuse or indifferent packer or shipping clerk in an inland city 
understand the difference between domestic and foreign condi- 
tions. 



PACKING AND MASKING ^ 



PACZINa AITD MARKING 

FactorsAffectingJPflffVig ^— A a a key to the study of the pack-^ 
ing proHIem the following sketch of the factors involved wiU 
prove helpful : 

1. Means of transportation. 

(a) Eail and water, necessitating extra handling, 

(b) Transshipment. 

(c) Animal transport, cart, mule, llama, burro, oxen, with 

need of loading and unloading for rests and feeding 
of animals. Native man carrier on foot or in canoes 
for rivers, lakes, and lagoons. 

2. At destination. Eainy season, constant dampness because 

of tropical conditions, heavy mountain dews, etc. 

3. Passage of shipment through tropical climate en route to 

destination. 

4. The conditions in ports. 

(a) Lightering. 

(b) Unloading from ship to wharf. 

- 5. Physical characteristics of the country, 

(a) Transportation on rivers. 

(b) Over narrow mountain trails. 

(c) Through streams which must be forded. 

(d) Possible necessity for leaving in warehouse in tropical 

climate. 

(e) Protection against pilferage. 
6. Effect of customs duties. 

The farsighted business man who is desirous of establishing 
his export business on a permanent basis will insist that the em- 
ployee in charge of his foreign trade shall personally superintend 
the packing and shipping of his products. By thus definitely plac- 
ing the responsibility he may be assured that before shipments 
leave they have been carefully inspected to guarantee their proper 
arrival at destination. By this means he also insures the giving 
of proper instructions for each individual shipment after a study 
of the conditions relating to cost have been considered. 

^Q33^toDeteminjBjfeePackij^ — The questions which a mer- 
chant must answer when preparing to make a shipment are these: 



164 EXPORTING TO LATIN AMERICA 

1. Whether the ultimate destination is a seaport, or is the ship- 
ment to be carried into the interior? 

2. Whether customs examinations and clearance are made at 
port or at an inland city? 

3. To what climatic conditions will shipment be exposed at 
every stage of transit? 

4. What facilities exist for transferring of shipment from 
steamer to shore? 

5. What methods of transportation will be used to carry ship- 
ments to ultimate destination, i.e., railroad, steamship, muleback, 
ox cart, etc.; and to what exposure will shipment be subject until 
final delivery? 

6. How will tariff affect the packing requirements ? 

^^ Some Conditions Affecting Packing. — ^For the purpose of deter- 
mining the necessities the best atlas, shipping guide, and other 
sources of information should be constantly at hand. Shipments 
to most Latin American republics must be unloaded from the 
railroad car to the ship, and upon arrival at port they must 
be unloaded and placed on the wharf. Not infrequently they are 
subject to transshipment, i.e., passed through several ports requir- 
ing a number of unloadings and reloadings. As this work is usu- 
ally done carelessly, a shipment is liable to serious damage unless 
properly packed. 

Proper Handling on Shipboard. — Besides packing carefully in 
order to withstand the handling to which shipments are subjected 
during the processes of loading and primitive methods of transpor- 
tation, the possibility of damage while in the hold of a ship should 
also be considered. Very often stormy weather so affects the cases 
that they are shifted about and may be seriously injured by the 
miscellaneous cargo of boxes and barrels which are loaded into 
the compartments of ships. 
^.Possibility of Damage in Unloading. — The conditions at the 
j port of entry must always be reckoned with. In many places, par- 
ticularly on the west coast, wharfs are entirely lacking and ships 
are unloaded in the open roadsteads. Merchandise is discharged 
into lighters or barges and not only may damage ensue from 
the impact with which freight is swung into the lighter, but also 
from heavy rains that may be falling during the process of un- 
loading. Not infrequently packages inadvertently roll into the 



PACKING AND MAEKING 15^ 

sea and may be greatly injured unless so packed that they are im- / 
pervious to moisture. -^ 

The Lighter, and How Freight Is Handled Therein. — Lighters ^ 
are large flat-bottomed barges with adjustable covers to be used 
in rainy weather, and shipments to be carried to shore are low- 
ered to them by steamer cranes, usually very carelessly. This is 
the acid test of packing, for all shapes, sizes, and weights of pack- 
ages, bales, and barrels are removed from the hold of the boat and 
put into the barge. A crane is used in connection with a sling, 
the latter usually being made of rope. This sling is filled to the 
utmost and often barrels of cement, coils of barbed wire, etc., are 
let down on a lot of miscellaneous merchandise. The moment the 
ropes of the sling loosen, the contents roll and tumble down for 
fifteen or twenty feet into the corners of the barge, hitting all 
manner of cases already in place. At the custom house there 
is a second handling of almost the same character. In most ports, 
particularly in smaller ones, hand cranes are used and very care- 
lessly operated. The raising and lowering being badly done, heavy 
packages, particularly, are severely knocked and jarred. If per- 
chance they light upon some piece of iron or stone which happens 
to be lying about the landing, the sides of the cases are often 
smashed. 

The Effect af High Temperature and Moisture. — The climate 0F7 
the country to which shipments are made and the routes along 
which freight is transported frequently are lost sight of. Even 
though a shipment may be consigned to a mountain city, it may 
pass through the equatorial regions en route, and, unless care is/ 
taken, the contents may be seriously damaged by the heat. _(. 

For instance, shipments consigned to the interior of Colombia 
have a long river transport from Barranquilla toward the upper 
regions of the Eiver Magdalena. Naturally, being so near the 
equator, the temperature is frequently in excess of 100 degrees 
Fahrenheit, and there is so much moisture in the atmosphere 
that it penetrates cases and causes mold unless the greatest care 
is taken. This is often overlooked by inexperienced shippers whoj 
use nails in fastening tarpaulins or burlap covers over boxes ii^ 
order to give them strength. Because of the hot moist condition^ 
the nails are quickly rusted, the tarpaulin rots and falls awa}^. 
All coverings of this sort should be sewed. 



1^6 EXPORTING TO LATIN AMERICA 

Another example is the case of a certain shipment of lard in 
tins from an interior point in Mexico. Because of a mistake of 
forwarding it was delayed several weeks in Vera Cruz. The ex- 
treme heat forced open the tins by expansion and caused a loss 
by decomposition and overflow. 

/^Conditions of Animal Transportation. — In many places the 
(methods of carrying the freight are extremely primitive and differ 
according to the section. As the size of the load of the different 
ianimals varies, this is a serious problem. Thus, a llama (frequently 
Tised in Peru and Bolivia) carries about 100 pounds, while the 
burro transports from 150 to 200 pounds (preferably 150 to 
160 pounds), and the mule is capable of carrying from 200 to 
250 pounds. 

The average load for a pack mule where the trails are poor is 
approximately 200 pounds. Where the trails are better, it is 250 
pounds. (The ropes with which packages are fastened to the 
mule's back are drawn very tightly and unless the packages are 
^rong they may be damaged by the process.) Such lots, how- 
ever, must be in units and exactly halved, so that they may be 
equally divided across the mule's back. The extreme length of 
the package must not be over three feet and the other dimensions 
should not go over fourteen inches in any direction. Packages 
which have no square edge, like bales of cloth, are easier to handle. 
The matter of dimension is important because of the narrow moun- 
tain trails. 

^^ In the interior, where resort must be had to rivers and lagoons, 
native boatmen are employed; the craft generally used is a nar- 
row dugout with only a limited carrying capacity. 
^ Dangers of Primitive Transportation. — Many shipments to Latin 
America are ultimately designed for interior points which can be 
reached only by narrow mountain trails. These are often traversed 
only by burro or native freight carriers who must bear the burdens 
on the back. The constant loading and unloading is a severe 
strain on packages. Naturally they are subject to damage by 
scraping the abutting rocks, trees, etc.; also from falls and the 
general rough handling which such methods of transportation 
entail. 

The temptation to enter cases is strong, particularly as they 
I'requently lie exposed to the depredation of thieves who are 



u 



PACKING AND MAEKING 157 

very skillful. Strength and perfect protection against robbery 
must be carefully sought. " 

Protection against Damage on Carts. — ^When freight is trans^ 
ported on carts drawn by oxen over very bad roads, the constant 
jolting, often for seven to fourteen days, may work great dam- 
age. Such carts are for the most part imcovered and heavy rains 
may cause serious loss. Frequently small streams or rivers have 
to be forded and the possibility of injury by water is a constant 
danger. 

Necessity for Protection against Water. — The most serious^ 
problem in shipping is moisture, which may affect shipments in/ 
a variety of ways. Not only rain but salt water resulting from 
spray or leakage in the damp holds of ships may be responsible 
for damage. A waterproof lining or wrapping before the case is 
sealed will afford the necessary protection and will also prevent 
damage if the package is immersed in the sea as the result of tackle 
slipping while the shipment is being unloaded. It is for this 
reason that oilpaper should be freely used, and many manufac- 
turers have found it advisable to use even oilcloth. The latter is 
preferred by some importers inasmuch as it has a definite value, 
since it can be sold even if at a reduction. The best protection 
against dampness or moisture is the zinc lining in a packing case, 
although linings are sometimes made of tin. When such linings 
are hermetically sealed, the contents are absolutely impervious to 
moisture. Though it is possible to obtain insurance against water 
damage, it is better to make packages moisture proof, as is 
generally done with European shipments. By so doing the con- . 
signee is spared the annoyance and trouble incident to making / 
a claim. 

How to Avoid Damage from Rust. — One of the commonest 
causes of damage to shipments is rust. Not alone is a shipment 
three to six weeks en route inadequately protected from rain and 
always subject to damage, but also it may remain for a long time 
in a warehouse in the original cases, and it can be easily under- 
stood what will be its condition unless it has been protected against 
rust in a thoroughly efficient manner. The methods of protecting 
it are those outlined. 

How to Obtain Information Regarding Packing.— The manu-^ 
facturer who is desirous of obtaining all possible iuformatiou 



158 EXPORTING TO LATIN AMERICA 

regarding packing, and wishes to comply with requirements, has 
abundant means of ascertaining what he needs to know, for he 
may secure this information as follows: 

1. By addressing the Bureau of Foreign and Domestic Com- 
merce at Washington or its branch offices; if information is not 
on hand, it will be obtained from the Consul or commercial agents. 

2. Letters to the principal importers of the articles in the 
various cities and countries. Such names may be obtained as 
indicated in Chapter XVI. 

3. The information may be gained from customers and gen- 
eral or local agents to whom the sale of the product has been 
given; also from commercial organizations, export journals, 
etc. 

r The Influence of Tariff. — ^It is not only because of the difficulties 
of transportation and the possible effect of rough handling to 
which packages are subject that the question of proper packing 
must be considered. In many of the Latin American countries the 
tariff plays an important part, and for this reason the manu- 

^_facturer should carefully consider it. In order that this may be 
more easily understood, a specific example is given. In the re- 
public of Venezuela manufactures pay a particular rate of duty. 
This duty is calculated on gross weight. By the latter is meant 
the exact weight not only of the article itself but of the package. 
Thus, the importer has to pay duty not alone on the product he" 
imports but on the paper with which it is wrapped, the string 
with which, this paper is tied, the pasteboard box surrounding it, 
and finally the wooden case itself. Where the rate of duty is high 
(as it usually is when it is specific), the possibilities for the sale, 
of a given article would be adversely affected. Where the weight 
of a package is so important, the manufacturer may frequently 
gain considerable advantage by devising a means of insuring the 
delivery of his product at an absolute minimum of expense, not 
alone of freight but of duty as well. The difference in duty which 
results from a more economical packing frequently enables him 
to command a large trade. 

Avoiding Trash in Packing. — It is for the foregoing reasons also 

I that the use of excelsior, old paper, cardboard boxes, etc., should 

' be avoided. The case should be shaped to conform as closely as 
possible to its contents and thereby assure a saving not alone in 



PACKING AND MARKING 159 

the weight and the packing but likewise in freight, which on steam-y 
ship lines is invariably calculated on the basis of cubic contents. / 

It is very important, in order to save excessive freight charges^, 
to pack goods in the smallest possible bulk. Loose packing, par- 
ticularly of dry goods, etc., adds much to the costs. When the 
shipments are made in tin containers, such as salmon, etc., they 
should be surrounded by sawdust or other packing. If this is not 
done, the rough handling to which cases are subjected results in 
damage to contents of the tins. 

The Importance of Separatian in Packing. — ^In practically all 
the Latin American countries the tariff laws provide for duties 
based on different classifications. Frequently the orders from gen- 
eral merchants wiU include items which appear^ in ^filmost all of 
the classifications and on wfiich fEe duty would vary from 10 cents 
per kilogram to $2.00 per kilogram. In the event that it seemed 
desirable, for the sake of economy, to place a small package in 
the same case with the other merchandise, the presence of the 
small article would make necessary the assessment of the duty on 
all the items in the case on the basis of the small article, even 
though the latter took the highest classification. 

As a concrete example may be cited the following: if a small 
box of jewelry were placed in a large case of miscellaneous mer- 
chandise consigned to Venezuela, the duty would be charged on 
the basis of the jewelry. 

It will frequently be found highly advantageous to pack and 
ship separately articles composed of different materials. Where 
the trimmings of an article are of a different material from the 
article itself, it is often best to make two different packages aadj 
ship them separately because of lower duty. _ .^ 

Differentiating Between Goods. — ^When various classes of mer- ( 
chandise are packed in the same case, extreme care must be taken 
to list them in the invoice under the proper classification. There 
should be obtained the weights not only of the goods, but also j 
of the cartons or paper surrounding them. -^"^^ 

Confining Packing to One Class of Goods. — ^As the tariff in cer^ 

tain countries makes impossible the importation of different kinds 
of products in the same case, the manufacturer should carefully 
observe shipping directions to this effect. When instructed to 
pack only one kind of goods in a case, he should do so, else a heavy 



160 EXPORTING TO LATIN AMERICA 

fine is likely to result. If shipping directions are correctly fol- 
lowed and complications ensue, the manufacturer cannot then be 
held responsible. 

The Importance of Weights. — The importance of obtaining and 
specifying the correct weight cannot be exaggerated, inasmuch as 
the duty in many countries, and on a multitude of articles, is 
. J)ased on weight. In order that there may be no misunderstanding 
on this point, it is important that packing and shipping clerks 
be thoroughly instructed as to the exact meaning of these terms, 
and that the weights be placed on invoices, packing lists, mani- 
fests, and other papers, where called for. 

Gross Weight. — This means the weight of the goods with all 
their outside and inside coverings, without deducting the mate- 
rials used for packing such as cardboard, paper, excelsior, netting, 
straw, shavings, hoops, etc. 

Net Weight. — Net weight means the actual weight of the goods 
without any exterior or interior packing. 

Legal Weight. — This means the weight of the goods together 
with that of their interior packing, such as cardboard and wooden 
boxes, wrappers of paper or other material, receptacles, etc., in- 
closed in the outer packing case in which goods are shipped. In 
many countries, in calculating the legal weight, no account what- 
ever is taken of the straw, excelsior, strings, etc., in which the ex- 
terior packages are placed, or of the weight of the outside packing 
case. 

Different Interpretations of Weights. — The general interpreta- 
tion of net, gross, and legal weights is the one given in the preced- 
ing paragraph. However, it happens that the laws in certain of 
— ^^e countries determine the exact manner in which these weights 
are to be calculated and the manufacturer should consult this 
table in order to protect his interests. 

The Mexican definition of net weight is as follows : "The weight 
of the article itself without any covering whatever.^' The defini- 
tion of legal weight is : "The weight of the article plus the paper 
box, flask, bottle, etc., in which the articles are usually kept in 
stock.'' 

The tariff law of Nicaragua defines the net weight as follows: 
"The actual weight of the goods, free from all packing receptacles 
or wrappers." 



PACKING AND MARKING 161 

Different Methods of Applying the Duty. — When duty is col- 
lected on legal weight and goods are not inclosed in interior pack- 
ages but in one outside inclosure, only the intrinsic weight of such 
goods is considered as legal weight. It should be borne in mind 
when packing goods of different classes in the same case that the 
customs on goods dutiable on gross weight will be calculated in 
proportion to the legal weight of each kind of goods. Duty is 
collected on the total weight of goods which are dutiable, on gross 
weight when they are imported with any kind of packing, and 
the duty will also be collected on the total weight when packed 
in a material which is likewise dutiable. When goods which pay 
a. duty on net weight are imported in ordinary packages, duty 
will not be collected on such packages. When duty is collected on 
goods according to legal or gross weights, it is collected on the 
packages in which they are imported, just as on the goods. 
In practically all the Latin American republics, when industrial 
machinery or apparatus is imported accompanied by accessories or 
parts exceeding in quantity the actual requirements, and such 
accessories are classed in the tariffs of the countries, a duty is col- 
lected on the surplus according to the classifications of the tariff. 

The Size of Packing Cases. — Because of the conditions attending 
the loading and unloading of shipments in Latin American coun- 
tries, the use of medium-sized eases is strongly advised. The fa- 
vorable dimensions are three by two feet, particularly where the 
contents are not too heavy. When goods are packed in smaller 
boxes, as is the case with starch, catsup, malted milk, etc., they 
should be strongly crated and packages made of the size men- 
tioned. This is desirable because small cases are placed in a sling 
or net when unloaded, and are likely to be crushed if a heavier 
case is allowed to fall upon them. ,- . 

The Importance of the Shape of Cases. — This is another factor of 
great importance, particularly where the ultimate destination is 
the interior, and where transportation on muleback is inevitable. 
Not alone because of the fact that the mules are small are long 
packages found unwieldy, but likewise, as the roads frequently lie 
through narrow trails in the mountains, the^danger of packages 
scraping mountain sides on the trails is 'far greater. The size and 
shape of the packages must invariably be determined by th^ 
handling they are to receive. » / 



16^ EXPORTING TO LATm AMERICA 

/^ Maximum Sizes and Weights. — In packing cases which must be 
transported on muleback it is indispensable to consider both weight 
and size. The maximum load that a mule can carry is 125 kilos 
or about 250 pounds. Not only should the weight be considered, 
but the best size so that the cases may be properly strapped on 
the mule's back. Common sense indicates that the cases should 
be oblong and 3 by 2 by 2 feet — preferably smaller. When only 

. one package is placed on the back of a mule, the maximum weight 

Lthat can be carried is 150 pounds. 

^.^ How the Sealing Is Done. — The use of sealed cases will be found 
very helpful in preventing pilfering. When a shipment is sealed 
it can be done with a wire which is placed around the center 
of the case. This wire is quite thin; it is fastened around the 
case with brads, and both ends are placed in lead ; it is then pressed 
by special instruments made for this purpose; it is thus impossible 

; to open the case unless the seal is broken. 
_ The Necessity for Compactness. — Freight charges collected by 
steamship companies are based on cubic measurements or dis- 
placement except in those cases where the freight would be greater 
if calculated on a weight basis. Because of this fact the importer 
is naturally anxious that the goods shall be packed in as small 
a bulk as possible. Packing cases should be fitted as nearly as 
possible to the actual contents in order that there may be no 
waste space which must be filled by excelsior, shavings, or other 
packing material productive only of expense. When it is prac- 
tical to pack shipments "knock down" without sacrificing any pos- 
sible selling advantage of the article thus shipped, it is advisable 
to do so. 

Advantage in the Use of Screws. — ^Where shipments are destined 
to interior points and it is important that contents of a case shall 
be not damaged, the use of screws is advocated. 
,. The Use of lightweight Crates and Boxes. — Where duties are 
based on the gross weight of goods, and the lightest pack- 
ing is desirable, a careful study should be made, not only how 
to obtain .this lightness of weight but also the maximum strength. 
It would avail but little to effect a saving in weight and have 
the merchandise arrive at destination in an unsalable condi- 
tion. 
\ Lightweight Packing Desirable. — American manufacturers who 



PACKING AND MARKING 163 

can supply packing that is both strong and extremely light will 
find the customer not only willing to pay for any difference over 
regular charges but inclined to favor them because of the advan- 
tages of importing in packages which make the duty less. Such 
packing is used to good advantage by German and Italian concerns, 
being made of papier mache or fiber board, pressed until it is 
almost as hard as sheet iron but extremely light, strong, and damp 
proof. 

When duty is charged according to weight, and the tariff applies 
to the container as well as the goods, the manufacturer should 
endeavor to give the wrapper, container, and outside packing a sal- 
able value to help cover the expense. A concrete exaniple of this 
method is that of European exporters of chinaware who use wicker 
baskets and whose wrappings consist of oilcloth, both of which can 
be sold. 

Another instance is that of German exporters who pack several 
crates in lightweight cases. These crates consist of two light strips 
of wood, three-eighths inch in thickness, two inches wide all 
around, and then one covering of light burlap inside that. A 
dozen such small crates are packed in one large case and placed 
aboard ship. The manifest covering them calls for twelve pack- 
ages; upon arrival at the pier the stevedores tear up the big case 
and the Latin American customer, who has to pay a specific duty 
on his wares, finds a great saving has been effected. 

An English Packing Case. — An example of a model case used by 
English exporters is the following: It is made of boards which 
are 1 inch thick for the sides and ll^ inches thick on the ends. 
The length is three feet four inches by two feet four inches for 
the height and width. It bears several battens, especially on the 
sides, as a reinforcement. Over the battens are iron hoops, thor- 
oughly nailed. The battens are 3i/4 by 3% inches in width and 
breadth. The cost of this case is from $6 to $7.50 and, of course, 
a charge is made for it by the shipper. 

The Use of Packages Which Can Be Sold. — Many other in- 
genious methods have been devised for the purpose of reducing 
the cost of duty. Not infrequently the packages have a commercial 
value, such as trunks, baskets, etc. Naturally these are also placed 
in very strong crates in order that the shipment may reach desti- 
nation in perfect condition. 



164 EXPORTING TO LATIN AMERICA 

Cases Must Be Carefully Made. — The wood used in making 
packing cases for export should be tough and at least one inch 
in thickness. Cheap pine wood should never be used. The con- 
tents of a case should be securely fastened so that they cannot move 
about in the case or rub or knock together. 

By inserting screws instead of nails the inspection of the ship- 
ment is facilitated, inasmuch as the necessary number of boards 
may be removed without damage for the purpose of inspect- 
ing the contents; the boards are then refastened in the same 
manner. 

Avoiding Secondhand Cases. — Secondhand packing boxes should 
never be used because of their weakness. It is unreasonable to 
expect a shipment whose destination is one thousand miles distant 
to arrive in good order if packed in poor containers. Old cases on 
which various marks appear should under no circumstance be used. 
It not only causes confusion in transit, but at the point of desti- 
nation there is likely to be trouble for the customs officials in read- 
ing the marks. 

The Use of Pulp Packages. — Within recent years the use of pulp 
containers, that is, cases made of pulp, has become very com- 
mon. These should not be employed in shipping goods to Latin 
American countries. In the first place, the extremely rough 
handling to which cases are subjected makes it impracticable, and 
in the second, the danger of damage by water and moisture is far 
too great. 

Avoiding Many Small Packages. — It is highly important to 
Inake the packages as large as possible, consistent with the needs 
of transportation, in order to minimize the charges for handling. 
This reduces not only the drayage expense in this country, but- 
the numerous charges which arise in connection with the handling 
of shipments at destination. In Latin America it is the custom 
to assess the charges per case, and the greater the number of 
cases, the more expensive will be their handling. 

.JJumbering All Cases. — In preparing a shipment for export to 
Latin America it is important that every package or case be given 
a number, and that this number be placed on the packing list and 
invoice. This is of great aid in determining what part of a ship- 
ment has been lost, in case it is reported missing, and will thus 
aid in its quick replacement. It occasionally happens that mules 



PACKING AND MARKING 165 

or llamas engaged in transporting packages in South America 
roll over the precipices, and where the loads contain cargoes of 
machinery the system of numbering the packages will be found 
very useful. 

English Words Should Be Avoided. — The use of English words 
such as "Care/' "This side up," etc., should be avoided, being of 
no practical value. It will be readily seen that no attention what- 
ever is paid thereto, inasmuch as the stevedores and freight handlers 
have no knowledge of their meaning. If it seems desirable to use 
words of this character, they should be in Spanish, carefully sten- 
ciled, and perfectly legible, as Con Cuidado. 

X The Importajice of Proper Marking. — The marking of shipments 
to Latin America is of equal importance with packing, as delays 
and nondelivery of many shipments may be attributed to a failure 
in marking. It is essential that the mark be absolutely plain and 
legible. The packages should be marked with stencil and with an 
ink which will not wear off or become blurred or illegible when 
wet. The affixing of tags and other means of identification which 
are likely to be torn off or lost in handling should also be avoided. 
Where a tag is affixed, it should be of the toughest, strongest mate- 
rial, fastened securely by wire. 

What the Mark Is. — The mark usually consists merely of one or 
more initials used either alone or in connection with such symbols 
as squares, circles, diamonds, or triangles; this is used in addition 
to the name of destination. The purpose of this abbreviation is 
easily understood. The name of the consignee is thus hidden from 
the shipper's competitors, and from others who may be interested. 
It also reduces a great amount of labor which would otherwise 
be required to enter the marks on the bills of lading, the certifi- 
cates of clearance, packing lists, ship's manifests, etc. Experience 
has taught the desirability of using the fewest number of marks. 
It is, of course, necessary to give a number to every case, and 
these should correspond exactly with every detail of invoices, bills 
of lading, etc. 

Plain Marking Essential. — ^Many shippers use for export the 
same cases that are employed for domestic trade. Such cases bear 
their name, street address, city, and advertisements. When these 
cases are used for export, the name of the consignee or his mark 
and destination are written in the same size of letteiing. This 



166 EXPORTING TO LATIN AMERICA 

is a serious mistake and one that should be avoided. In the dark 
holds of steamships, it is very difficult to distinguish such mark- 
ings, and as a result the shipments are frequently carried beyond 
their destination. For his own advantage, the American ship- 
per should use packages that are free of other vrords, in order 
that they may reach his customers promptly. The best plan 
is to print on the cases the name or marks and destination 
in large letters, likewise the net and gross weights in kilos. The 
stencil characters should be at least two and one-half inches in 
height. 

Government Exactions Regarding Marks. — Because of many 
i unfortunate experiences, a number of South American republics 
require that the marks on packages, cases, barrels, etc., be stenciled. 
Such republics prohibit the importation of goods on which there is 
brush marking. This is an excellent precaution which should be 
adopted by every shipper to Latin America, as it avoids confusion 
and insures the proper delivery of the shipment. In a number 
of countries, cases must be marked not only on one side but on 
two or even three sides of a package. The net and gross weights 
are also exacted and must be stenciled in the same manner as the 
address. Care should be taken that these weights agree exactly 
with all shipping documents, as the most insignificant variation 
entails trouble and difficulties. 

An Example of Proper Marking. — An example of the proper 
marking to be used, particularly in certain countries where this 
is a matter of great importance, is the following : 



Morvte video 



Another example that may be quoted is as follows; 



PACKING AND MABKING 167 




N.T -40 KqX ^ 1 X,,^ 



In the second instance the weights given are net and gross, 
Nt. meaning net, Bt. meaning Brute, gross. The "Kg/' is the ab- 
breviation of kilogram. The reason for stating the weight on all 
freight is that it affords a quick index to those handling it, as to 
the sort of crane or block and tackle to use in loading and un- 
loading. 

Publications Relative to Packing and Marking. — A number of 
publications containing instructions for packing, shipping, mark- 
ing, etc., have been published by the United States Government. 
They will be found listed on page 493 of the Appendix. 



MARINE INSURANCE 

Introduction. — The matter of insurance covering shipments to 
Latin America is one that requires the closest attention of every 
exporter. Shipments made to Latin American ports should be fully 
insured against the risk of loss, damage, and pilferage. Many 
shippers are not aware of the fact that the liability of a steam- 
ship company is practically negligible. Almost any loss that oc- 
curs is sustained by the shipper of the merchandise or the owner, 
and it is only rarely that the steamship company itself becomes 
liable for damage or loss from any cause whatever. 

The Meaning of Marine Insurance. — Marine insurance covers 
the loss or damage to a shipment of merchandise during a voyage 
specified in the policy, from perils of the sea, the act of God, and 
any other causes that may be specified in the policy covering the 
shipment. 



\j 



168 EXPORTING TO LATIN AMERICA 

The Meaning of "General Average." — The laws relating to 
insurance greatly favor the steamship lines. Because of this, 
marine insurance is essential. When a steamship is sunk, burned, 
damaged in a storm, hurt in a collision, or is completely lost at 
sea, the owner of the vessel is not responsible to the shipper or 
consignee of the merchandise. The captain of a vessel is at 
times compelled to incur an unusual expense or to make a heavy 
sacrifice of a part of the cargo in order to preserve his ship and the 
remainder of the cargo therein. The expense of such a sacrifice, 
which includes the cost of the means taken to prevent a still heavier 
loss, is known as the **^general average." The theory upon which 
the general average is based is that such a loss is sustained for 
the benefit of all, to meet which the actual loss is assessed against 
the owners of the cargo in direct ratio to the value of their ship- 
ments. 

The fact that the shipper had an insurance policy issued for 
the shipment transfers this liability to the insurance company. A 
shipment, when not insured, may be legally held by the owner of 
the vessel and confiscated by him to protect any loss to the ship 
or cargo. This can only be avoided if the owner of the shipment, 
through his agent on the ground, can give a bond to guarantee 
the payment of the share of the loss assessed against the shipment. 
For this reason practically every shipment is insured, as the prin- 
ciple involved is that of protecting the best interests of all 
concerned. 

The Liability of the Insurance Companies. — It is absolutely 
essential that the exporter examine closely all marine insurance 
policies. This is due to the fact that many losses for which claims 
will be made against the shipper are not covered in such policies. 
The ordinary policies do not take into account by the term "perils 
of the sea," damage from breakage of cases or packages, the chafing 
of shipments, pilferage, damage by water in the homf etc. 

The actual protection of a marine policy is usually against only 
extraordinary occurrences, including the loss by fire while on the 
vessel, damage to the shipment by sea water or moisture (as a 
result of collision or like catastrophe), damage to the shipment 
by moving of the cargo because of bad weather conditions, etc. 
The shipper should see to it that all kinds of losses are carefully 
specified in the policy. 



MARINE INSURANCE 169 

Protecting Other Hazards. — As the usual policies do not cover 
many of the hazards to which a shipment is subjected before' 
being placed aboard, it is essential that this should also be taken 
into consideration. A shipment may be damaged by fire, water, or 
moisture while it is on dock at the port of departure, just as it 
may be' so injured before delivery to consignee after a safe ocean 
voyage. A shipment may also be pilfered before it is placed on 
the vessel, as it may likewise be robbed while on board and on the 
dock of the port of entry. Shipments may also be damaged by 
extremely rough handling. The rates will be quoted by the insur- 
ance brokers in proportion to the value and risk involved in these 
.hazards. 

Free of Particular Average under Five Per Cent. — This phrase 
means that unless the definite loss or damage to a shipment 
amounts to five per cent, or more of the sum for which the ship- 
ment was insured as specified in the policy, the insurance com- 
panies allow no claims for damage or partial loss. 

Necessity for Insuring under Particular Average. — ^Applications 
for insurance subject to a particular average must particularly pro- 
vide therefor in the applications for such insurance. 

The Meaning of "Open Policy" Insurance. — Marine insurance 
companies furnish "open" policies under which shipments may be 
insured at rates applicable to the various Latin American repub- 
lics. The method of using an open policy is as follows : 

The insurance company supplies a book of blank certificates; 
whenever a shipment is made the importer fills in the certificate 
which contains the detail of the shipment, including the rate, 
number of cases, value, etc., together with the number of the pol- 
icy. When shipments are made, applications are sent to the insur- 
ance company giving notice of the shipment, and for the premiums 
payments are made monthly. 

The certificates are generally indorsed in blank and attached 
to the remainder of the papers and forwarded to the consignee, 
who presents them in the event of loss. 

Precautions in Placing Marine Insurance. — Marine insurance is 
very flexible and the policies may be written to cover all hazards 
to which a shipment may be subjected from the monrent it leaves 
the warehouse or factory of the exporter until it is within the 
possession of the consignee at its ultimate destination. Under such 



170 EXPORTING TO LATIN AMERICA 

a policy all the risks to which a shipment is ordinarily sub- 
jected are guarded against; therefore the shipper should have a 
clear understanding with reliable brokers in order that no mis- 
understanding may arise in the event of losses, complete or par- 
tial. 

Lists of Insurance Brokers. — Although arrangements for marine 
insurance can be made through insurance agents in the interior, 
the largest and most experienced firms are naturally established 
in New York. A list of such brokers may be found in the Appen- 
dix. Freight forwarding agencies also provide insurance but must 
place it through brokers; hence when the business is of some vol- 
ume it is preferable to deal direct with brokers. 

The Cost of Marine Insurance. — Before buying a marine insur- 
ance policy the exporter should make every effort to obtain the 
lowest possible rates besides the most advantageous form of con- 
tract, since the policies vary materially and the rates are natu- 
rally in proportion to the character of the hazards covered. Gen- 
erally speaking, the cost of marine insurance varies from one- 
quarter of one per cent, upward, but it is naturally higher if 
the policy includes risk of theft, leakage, breakage, damage while 
on dock, etc. 

Provisions Made for Freight and Charges. — In making arrange- 
ments for marine insurance it is customary to add to the value of 
each individual shipment from 10 to 15 per cent, of its value. 
This is to protect the party insured against the loss of freight 
and handling charges which would have been incurred by the time 
the shipment reached its destination. When quotations are made 
F.O.B. and the amount of the duty is included, this should be 
authorized by the shipper, else payment may be refused by the 
importers. 

Insurance for Pilferage. — One of the hazards in shipping goods 
which are easily carried away is that of pilferage. This covers 
consignments of many articles such as neckwear, fancy goods, shoes, 
hardware, tools, implements, etc. Although it is possible to obtain 
insurance against loss, it is absolutely necessary to pack the cases 
with the utmost security and seal them against entry. Insurance 
at a reasonable rate against thievery can be obtained, but if many 
claims are presented the rate is likely to be raised or the insur- 
ance entirely withdrawn. Even though claims are paid; the cou- 



MAEINE INSURANCE 171 

signees in Latin America should be spared the trouble of making 
them. 

How to Collect a Claim. — When a loss occurs, the holder of the 
certificate may file a claim for the value of the shipment includ- 
ing the expenses of freight forwarding, the insurance premium, and 
other charges. As the insurance certificate is one of the documents 
indispensable to financing shipments, it is either in the possession 
of the bank through whose hands the documents are handled, or 
in that of the consignee who has accepted the draft or paid it. The 
papers that are necessary in addition to the statement of loss are 
as follows : 

1. The original and negotiable copies of bill of lading. 
These must be indorsed or made "to order" that they may be used 
by the underwriters. 

2. The policy or certificate of insurance. This must likewise 
be indorsed if made "to order." 

3. A document conveying the interest of the owner to the under- 
writer. 

Claims should be presented through the agent of the insurance 
company in the port of entry or forwarded direct to the company. 

4. A certificate of survey signed by a Lloyd's agent, one of whom 
is found in every port, will be of material assistance. 

Books Relating to Marine Insurance. — A number of important 
works which deal very fully with marine insurance may be con- 
sulted by the student. These are listed on page 465 of the Ap- 
pendix. _^.^ 



CHAPTER XI 

INVOICES, CONSULAR INVOICES, SHIPPING DOCUMENTS, 
FREIGHT FORWARDING, OCEAN FREIGHT RATES, INSUR- 
ANCE, BANKING DOCUMENTS 



INVOICES 

,--^Tlie Importance of Invoices. — One of the means of satisfying 
Latin American buyers is the making of proper invoices. The 
greatest care should be given them as they are vital documents. 
Every effort should be made to supply all possible information to 
insure the proper clearance of merchandise through the custom 
house and the payment of the lowest rates of duty. 

p.,-''<£ssential Features of Latin American Invoices. — The American 
manufacturer should insist that invoices receive the personal atten- 
tion of the employee charged with the care of export business. 
Invoices should be carefully checked and should be made as 

j follows : 

1. They should be written on a good quality of paper, prefer- 
ably with a typewriter. 

2. All invoices must bear the name of the shipper, the con- 
signee, the destination, the number of cases, and, without fail, the 
exact shipping mark. Invoices should clearly designate whether 
the packages are crates, baskets, barrels, boxes, bales, casks, 
etc. 

3. The gross, legal, and net weights should be stated. These 
■ should be expressed in kilograms (2.20 kilos equal 1 pound). 

4. The dimensions of each package must be specified. These 
should also be calculated -in the metric system.'* 

5. Good§ should be billed in the order they are packed; that 
is, Case 1, 2, 3, etc. 

6. The dollar sign should precede each price extensioh and 
footing. I 

7. The words "Gold Dollar" should (always be used. It should 

172 



INVOICES 173 

be stated on the invoices whether the charges for collection of drafts 
are for the shipper or the consignee. 

8. If prices are subject to a combination of discounts, they 
should be worked out for each item so that the net value may be 
shown. This is particularly necessary where an ad valorem duty 
is assessed. 

9. The use of general designations should be avoided. A con- 
crete example would be '^hardware/' when hammers or awls are 
shipped. 

10. Wherever it is possible, and can definitely be determined, 
especially where orders bear these instructions, each item should 
state the classification of the tariff of the country to which the 
goods are consigned. 

11. For each item should be specified the exact material used 
in making it, thus: hats of felt with ribbons of silk; sofas of 
birch with leather cushions, stuffed with moss; machinery of steel, 
with parts of brass. Every detail which can be furnished to aid 
the customs officials in classifying the article for assessment of 
duty will be found very valuable. All items packed in the ship- 
ment should be billed. 

12. If cloth is exported, the exact material of which it is made 
must be specified. For example, silk, cotton piece goods, percale, 
voile, etc. 

13. In exporting cotton goods or cloth, it is best to give thfe 
width, the total number of threads per six square millimeters, and 
the kilograms per 100 square meters. This should be determinl^ 
exactly as variations may make an important difference in the dtlty. 
;Much work and unnecessary handling at the custom house may 
thus be guarded against. 

14. When quantities of booklets, circulars, or advertising novel- 
ties are included in a case, they should be listed, together with 
weight and description, and a certain value specified. This value 
should be placed on the bill and accompanied by a corresponding 
credit memorandum. The use of the words "no value" or "no 
charge" should be avoided. Failure to do this frequently involves 
the consignee in difficulties with the custom house, and may even 
result in the seizure of the goods. 

15. When items such as prepaid freight, special cases, or cost 
of consular mvoices are charged, special invoices should be ren^ 



174: EXPORTi:t^G TO LATII^ AMERICA 

dered. Such items should never be included in bills for the goods. 

16. If machinery is shipped K.D. and divided among various 
cases, it should be so listed on the invoices, particularly where an 
ad valorem duty is assessed, else the cost to the consignee will be 
increased. 

17. No abbreviations should be used. 

Haw Many Invoices Must Be Made. — The exporter should be 
governed by conditions as to the number of invoices made. In 
many instances the Latin American importer insists upon copies 
for his own use and they should be willingly supplied. It is best 
to make for the use of the Latin American importer an original, 
duplicate, and triplicate. The original should be forwarded direct 
to the importer. 

Correspondence Relating to a Shipment. — When a shipment is 
made against a draft, it is customary to issue the draft in dupli- 
cate. In such cases the duplicate invoice accompanies the one draft 
and the triplicate the other draft. For the purpose of obtaining 
a consular invoice, another set of invoices should be made, identi- 
cal with the ones sent to the merchant, the original of which 
will be taken by the Consul of the Latin American country, to- 
gether with as many copies as may be exacted by the laws of the 
country; in some cases three or four copies are needed. 

The Numbering of Invoices. — Exporters to Latin America will 
find it desirable, not only for their own convenience but particu- 
larly as an aid to their clients, to number their invoices. This 
is particularly valuable where shipments are frequent, and will be 
found useful in obtaining duplicate orders. 

How Foreign Invoices Differ. — American manufacturers who 
have successfully established a demand for their products in the 
Latin American republics have found invoices an excellent means 
of developing trade. Conditions in the Latin American republics 
are in many ways different from those in the United States, and 
in the matter of commercial documents particularly there is a 
noticeable variation. Latin Americans frequently are unable to 
understand the almost utter lack of details when they are them- 
selves accustomed to furnish so many on invoices. As invoices 
are considered vital documents, every effort should be made to 
have them carry the information required for proper clearance of 
the merchgiiidise. This is a prime essential because of the fact that 



INVOICES in 

many customs officials are inclined to take advantage of the slight- 
est discrepancies in descriptions, weights, and declarations, to assess 
fines, by which they are often individually benefited. 

Invoices a Means to Business. — Accuracy and care in preparing 
invoices will result not alone in facilitating the clearance of a 
shipment but as a positive means of developing trade. The Latin 
American exporter prefers to do business with a concern that is 
careful, attentive to details, and watchful of his interests. If 
invoices are prepared with care and made easily understandable, 
with an accurate description of the goods in Spanish, it will be 
found that the time required is well spent and productive of 
definite results. 

The Proper Description of Goods. — In developing business with 
Latin America, the manufacturer making his first shipment to a 
country should exercise unusual care in applying a proper de- 
scription. When the invoice is sent the customer should be asked 
to say whether some other word than that used in the bill shall 
be written on future invoices as a means of expediting the clear- 
ance. In this manner the manufacturer, in the course of time, 
can accumulate a great deal of valuable information, and make 
more remote the possibility of his customer's being penalized or 
fined by the customs officials. 

The Importance of Correct Papers. — Before a shipment to a for- 
eign country is dispatched, the manufacturer should be certain that 
the invoices are correctly made according to the tariff schedule. 
If there is any doubt, application should be made to the Consul 
General of the republic, in New York, although it is best to 
ascertain from the customer the latter's desires and follow them 
to the letter. 

Signatures on Invoices. — ^When exporting to some of the Latin 
American republics, it is necessary to make a declaration regarding 
the origin or manufacture of the goods. These regulations must 
be signed by an official of the exporting concern and, in the case of 
a partnership or unincorporated company, by a member thereof. 
It is desirable in every instance that an export invoice shall bear 
the signature of a firm member, as it serves to create confidence 
and raise the firm in the opinion of the Latin American importer. 
It is also a custom to write on export invoices the letters "E.&O.E.," 
meaning "Errors and omissions excepted." 



176 EXPORTING TO LATIN AMERICA 

The Use of a Packing List. — As is frequently the case in domes- 
tic trade, a separate packing list is found of great advantage, and 
the custom of supplying such a list in addition to the other docu- 
ments covering a shipment for export to Latin America is often 
followed. This packing list should contain an absolutely accurate 
memorandum of the contents of every case, and should show, with- 
out possibility of any misunderstanding, the exact number of cases 
in a shipment, as well as the contents of each case. If there is 
any discrepancy in the packing list, the consular invoice, or the 
commercial invoice, delays are likely to occur at the port of entry 
in Latin America. In the packing list should also be specified the 
various kinds of articles that are packed together in one case, 
with the gross, legal, and net weight thereof. 

Attention to Details Indispensable. — ^Lack of attention to in- 
structions, or a superficial observance of them, leads to many mis- 
understandings. A concrete example of this is found in the case 
of the manufacturer who placed the packing list of a shipment in 
one of the cases instead of forwarding it with the shipping papers. 

The Use of Code Words. — The use of code words in the descrip- 
tion of articles will be found a material aid to foreign customers, 
as such words enable the client to duplicate easily by cable if the 
items are required quickly. When code words are used as applied 
to different articles, it will be found equally advantageous to sup- 
ply words for quantities and other details to make reordering easier 
for the dealer. The need for this feature is readily apparent when 
the great volume of domestic business now done by telegraph is 
considered. The code words thus used are supplementary to the 
elaborate codes obtainable in book form. 

Keg^stration of Cable Address. — The manufacturer should 
choose a word which will serve as his code address and register it at 
the offices of the Western Union and Postal Telegraph companies. 
This should be done in the city where his factory is located and 
also in the cities where he has established export offices. The regis- 
tration of a cable address costs nothing and the exporter should 
use the word on all his printed matter, particularly on invoices 
and letterheads. This precaution will enable his correspondent 
to cable in the most economical way. 

The Use of Cable Codes. — In addition to specifying on his state- 
ment the cable address, it is also advisable to print the cable codes 



INVOICES m 

that are used. Of these there are many, but those most frequently 
employed are the Western Union, the A.B.C., the A 1, the Samper, 
the Lieber, and the Veslot. These may be very easily obtained as 
indicated on page 466 of the Appendix. 

The Use of Consular Invoices. — The consular invoice is one of 
the most important documents in the forwarding of shipments 
from the United States to the Latin American republics as it is 
required by almost all the southern countries. Consular invoices 
serve officially to determine the value of the merchandise imported 
into the republics. The document is virtually a copy of the com- 
mercial invoice, being an itemized memorandum of the products 
included in a shipment, their exact value, and such other details 
as the name of the steamer by which the goods are carried, the firm 
or individual to whom consigned, and often the number and clause 
of the tariff under which the products are to be imported. These 
documents are generally made upon forms obtained in the offices of 
the Consulates General of the various republics and a specific 
charge is made for them. Not infrequently the necessary blanks 
may be obtained from printers or stationers, and as a rule from 
three to six copies are required. On page 520 are given full details 
regarding consular invoices and their requirements. 

The Details of Consulax Invoices. — The importance of the con- 
sular invoice is so great that in the case of large export firms the 
invoices are prepared under the direction of one employee thor- 
oughly acquainted with the conditions in the various countries, 
in order that every possibility of error may be avoided. The con- 
sular invoices, when prepared, are taken to the office of the Consul, 
together with the bill of lading covering the shipment, and in some 
instances a signed copy of the latter document must be left with 
that official. The conditions vary greatly with the different coun- 
tries and a recognized shipping guide should be consulted in order 
that all possibility of error may be avoided. It is because of the 
importance of the preparation of such a document that the services 
of export agencies and forwarding agencies are found so desir- 
able, particularly as consular invoices must be written in the lan- 
guage of the country to which the shipment is made. 

Export Bills of Lading. — The railroad companies, as a general 
rule, do not issue export bills of lading. There are certain com- 
panies which operate from Gulf ports as well as by way of the 



178 EXPOETING TO LATIiNT AMERICA 

Atlantic Coast and are in a position to issue through bills of lading 
to all points in the West Indies, Central America, Panama, and, 
in some instances, to certain places on the northern coast of South 
America in the republics of Colombia and Venezuela. Although 

I certain railroad companies issue export bills of lading at interior 
points for shipments to ports in South America, this is not the 
general custom, as almost invariably freight is dispatched by for- 
warding agents in New York City or other points through which 
it mores. When railroad companies forward the goods, they them- 
selves must contract with steamship agentis -^or the reservation, 
although it sometimes happens that the shipper, who has made his 
own contract with the steamship company, transfers his contract 
to the railroad company. 

/** ^Chief Obstacles to Interior Bills of Lading. — Among the objec- 
tions to bills of lading issued in the interior are the custom house 
requirements of the Latin American governments in the matter of 
documents. An indispensable detail is the name of the steamship 
line, the master of the steamer, the name of the vessel that carries 
the shipment, the date of sailing, etc. Most of the Latin American 
republics insist that at the time the consular invoices are issued, 

• the bills of lading likewise be certified by the Consul or signed 
together with the ship's manifest before the steamer sails from port. 
Another requirement is the payment of a Consul's fee for each 
individual bill of lading. This is paid to the Consul in the port 
of sailing, together with a fee for certifying to the correctness of 
the invoice. 

Documents of Forwarding Agents. — In handling the shipments 
of American manufacturers for export, the forwarding agents fre- 
quently issue private receipts in the shape of their own bills of 
lading to Latin American ports. As forwarding agents are not 
recognized common carriers, the bills of lading issued by them 
do not protect the ownership of the property nor carry the title, 
since the ocean bill of lading alone governs such ownership. As 
many of the forwarding agents, however, are concerns of the high- 
est responsibility, such documents are accepted without question 
by banks, particularly those familiar with the details of foreign 
trade. It may be stated as a general fact that the ocean 
bill of lading is usually delivered by the forwarding agent to the 
bank. 



FREIGHT FORWARDING 179 



FREIGHT FORWARDING 

^"'TLoYf Export Shipments Are Handled. — Shipments for export axe 

of various kinds, but may be grouped as follows : 

1. Those from manufacturers located in interior cities, who 
make shipments according to orders received from export houses 
and consign the goods to New York or other seaboard towns ac- 
cording to specific instructions. These shipments are handled in 
almost the same way as are domestic consignments. 

2. Shipments of manufacturers who ship direct to merchants 
in Latin America from whom orders have been received. It is 
the handling of these shipments that requires the greatest attention 
and care. 

Those Who Can Forward Goods in New York. — Most of the 
goods destined for Latin America are carried by steamship lines 
from ports in this country. Only a part of those to Mexico move 
by rail via the border. The great bulk of shipments are carried 
by way of New York. The forwarding of such shipments from 
New York City can be done by any one of the following means : 
i/1. Export agents or New York offices of the manufacturer. 
t^2. Forwarding agents; i.e., concerns who make it a business to 
forward shipments. 

^3. Railroad agents ; i.e., the foreign departments of the railroad 
companies. 

^. Drayage, transfer or trucking companies. 
^5. Express companies. 
wQ. Steamship companies. 

No matter which of these agencies is selected for the forwarding 
of the goods, the procedure in all instances is practically identical. 

Forei^ Freight Ag^ents. — With the development of the export 
business, the railroad companies have been forced by competition 
to lend every aid to the exporter, and for the purpose of controlling 
traffic have seen fit to establish their own export offices where they 
attend to the various details in connection with forwarding ship- 
ments. The official in charge is generally known as the "foreign 
freight agent." 

Drayage, Transfer or Trucking Companies. — Another result of 
the competitive conditions has been the establishment by trucking 



180 EXPORTING TO LATIN AMERICA 

companies of their own export agencies for the puujjse of obtain- 
ing the hauling of export shipments. From Jl*fscondition has 
grown the establishment of their foreign departments with expert 
service in the hauling of shipments forwarded by them. 

Express Companies. — A recognized service of the leading express 
companies today is the handling of foreign shipments, and this is 
done by departments organized similarly to the forwarding agen- 
cies. Their charges are practically the same as those of other 
agencies for handling this class of business. 

Steamship Companies. — ^While most steamship lines, particularly 
those plying from southern ports, are prepared to attend to the 
forwarding of shipments, they do not issue bills of lading until 
many details have been complied with. It is, therefore, advisable 
to make shipments in care of the other agencies indicated. 

Forwarding Agents and Their Work. — The freight forwarding 
agent is of great assistance to manufacturers, particularly where 
a large business is transacted. It is an easy matter to obtain a 
reliable agency, as there are many in New York and the larger 
firms maintain offices in the principal inland cities. The names 
of forwarding agencies may be obtained in city directories, from 
commercial organizations, from railroad agents, from export jour- 
nals in which they frequently advertise, and from foreign shipping 
guides. 

Reliable Forwarding Agencies Obviate Errors. — A freight for^ 
warding agency that can insure satisfactory service is able to 
obviate many errors, particularly when shipments must be trans- 
ferred from railroad to steamship lines. Where possibilities of 
mistakes are so great because of this fact, the manufacturer should 
have a thoroughly reliable agency, even if its charges for handling 
are slightly higher. A good agency will make it possible to avoid 
fines and disagreements with Latin American importers. 

Forwarding Combination Shipments. — By reason of the business 
transacted, many freight forwarders are enabled to combine numer- 
ous small shipments in carload lots, "consolidated cars,^' and ship 
them from the interior to ports in this country, from which they 
are forwarded to their ultimate destinations. In some instances, 
sufficient small shipments are available to consign beyond the 
ports of this country, in which case more favorable rates can be 
obtaiaed for the ocean haul. Even those shipments can be gent 



FREIGHT FORWARDING 181 



from the ports of this country under a combination bill of lading. 
The item of ^^ht from an inland city to the port is frequently 
of considerable importance, and it is therefore highly advantageous 
to obtain the rates of forwarders. 

Forwarding Agents Possess Advantages. — The freight forwarding 
agency, by reason of the volume of business it transacts, is en- 
abled to make contracts with railroad companies, both at home 
and abroad, for the use of entire cars which it obtains at such 
rates that it can contract for hauling freight at lower rates than 
if the freight were shipped on individual bills of lading. With 
steamship companies it has a particular advantage, as space, which 
must always be contracted for, is rented in smaller lots to indi- 
vidual shippers, generally at a considerably lower rate than the 
latter could obtain direct. By combining an inland freight serv- 
ice with foreign freight forwarding, lower through freight rates can 
easily be quoted. 

Principal Services of Forwaxdin^ Agents. — In addition to fur- 
nishing more reasonable rates, a good forwarding agent attends 
to all necessary shipping documents, including the shipping per- 
mit, consular invoice, and clearance certificate; provides transla- 
tions of invoices and sees to it that every technical requirement is 
satisfied, thus avoiding for the manufacturer and his customer fines 
and difficulties. 

Other Services of Forwarding Agents. — Other services of for- 
warding agencies include the following : effecting marine and other 
insurance, forwarding for collection drafts against documents, 
discounting documentary drafts, attending to importation of mer- 
chandise, and obtaining drawbacks. Caution should be observed 
in arranging with forwarding agents for the discounting of drafts, 
because of the possibility of loss by reason of carelessness on the 
part of the agency's correspondent, or the failure of the forwarding 
agent, which may cause complications. 

Foreign Freight Agents' Quotations. — As it often happens that 
a favorable rate which includes duty and other charges results 
in the capture of business from a foreign competitor, the service 
of responsible and skillful freight forwarders will prove extremely 
valuable. Such forwarders undertake not only to quote the lowest 
rate but likewise to arrange for the importation into a foreign 
country, the payment of duty, etc. Their experience in such mat- 



182 EXPORTING TO LATIN AMERICA 

ters justifies their making contracts of this nature, the risk of 
which the ordinary manufacturer, because of his inexperience, 
would not care to assume. 

Advantages in Combining Small Shipments. — The forwarding of 
a small shipment by an export agency obviates the necessity of 
carriage on a parcel receipt which is very commonly used in the 
case of small packages. However, the disadvantage of parcel re- 
ceipts is that steamship companies, as a general rule, exclude from 
this classification cases which measure two or three cubic feet and 
which can have the benefit of forwarding at the tonnage rate under 
one bill of lading if handled by a forwarding agent. There is no 
standard of measurement and the regulations regarding size are 
different in the case of each steamship line. 

Charges of Export and Forwarding Agents. — The charges made 
by export and forwarding agents vary, but when business is done 
with legitimate agencies or old established firms, the likelihood of 
overcharge is minimized. However, great care must be exercised 
as there are numerous unscrupulous agents who take advantage of 
the unwary and whose charges are often subject to much criticism. 
Although a nominal charge for the issuance of a bill of lading and 
the handling of an average shipment is $1.00, this does not repre- 
sent the profits of the forwarder whose further profits consist in 
charging more for drayage, transfer, etc., than is actually paid 
by him. It is safe to assume that very often the items for which 
bills are rendered by forwarding agents show more than actual 
expenditures. The abuses to which large shippers have been sub- 
jected have led them to establish their own offices in New York 
City or to make arrangements with an export agent, a portion of 
whose duties (as outlined in Chapter VI) corresponds to the wort 
of a forwarding agency in the dispatch of shipments. 

The Importance of Selecting Forwarding Agents. — A source of 
much complaint in the past has been the charges for forwarding 
shipments made by unscrupulous individuals who engaged in the 
business for the deliberate purpose of fraud. This is practiced by 
placing upon expense bills many needless or fictitious and excessive 
items which represent no actual or necessary outlay, as a result of 
which manufacturers receive claims from the importers which 
they must either allow or lose all opportunities for further business. 
The practices of fraudulent forwarders frequently take the shape 



FEEIGHT FORWARDING 183 

of heavy charges for cartage on very small lots which often weigh 
5 to 20 pounds each, as much as $1.00 being charged for dray age. 
Although the American manufacturer includes charges of the for- 
warding agencies in his invoices, it is to his advantage to insure 
the correctness of such items, and to minimize expenses. 

Obtaining Quotations from Forwarding Agents. — The manufac- 
turer can easily convince himself that proper charges are being 
made by obtaining quotations for services rendered by different 
freight forwarders and by the comparison of bills rendered by 
them. He should endeavor thoroughly to familiarize himself with 
conditions in order that no opportunity for overcharge may occur. 
i, — fostructions to Give Forwarding Agents. — No matter to whom 
instructions are given for forwarding a shipment, there are certain 
essential details which must be supplied. As a rule forwarding 
agents supply printed forms which can be filled in with the neces- 
sary directions. The form greatly simplifies the procedure. In any 
event the railroad bill of lading must be sent very promptly in 
order that the shipment may be handled expeditiously in port and 
storage charges avoided. With the bill of lading should be for- 
warded an invoice and manifest showing exactly the marks and 
numbers of the packages, and their weights (gross, legal, and net) in 
pounds and kilograms. It should also be definitely stated whether 
the shipment is to be consigned direct or to the order of the shipper. 
Full instructions as to whether or not freight is to be prepaid 
should be supplied; likewise, whether insurance (marine and pil- 
ferage) has already been effected or whether this is to be pro- 
vided by the forwarding agent. The letter should also state to 
whom the bills of lading and consular invoices are to be sent ; that 
is, whether they are to go to the consignee, to a bank for collection, 
or to be returned to the shipper. In the event that a draft for 
the value of the goods accompanies the shipment, the agent should 
be directed as to how to handle it; he should be told whether by 
broker, bank, or otherwise. 

The Basis of Ocean Freight Rates.— Ocean freight rates are a 
serious factor in the development of trade with Latin America, 
particularly when applied to commodities on which the freight 
charges are heavy, for upon the variation of such charges the 
placing of an order may depend. As a general rule, freight rates 
for ocean shipments are quoted according to measurements, al- 



1.84 EXPORTING TO LATIN AMEEICA 

though steamship companies reserve the privilege of determining 
rates which are usually quoted, "Weight or measurement, ship's 
option." The ocean ton is 2240 pounds, and this is considered the 
equal of 40 cubic feet. Coastwise traffic is based on the short ton 
(2000 pounds). The metric ton (2205 pounds) is now commonly 
used by European companies. Sometimes it is to the advantage of 
steamship lines to charge by weight, and this is especially so if the 
shipment weighs more than 56 pounds to the cubic foot. If the 
weight is less than this the freight is naturally calculated on the 
measurement basis. There are no definite rules, however, as con- 
tracts must invariably be made, and the law of supply and demand 
governs, to a very considerable extent, this phase of commercial 
intercourse. In order to make calculations easily and quickly, 
every shipping clerk should be supplied with a book containing 
computations of cubic measurements. Another requisite is a table 
for quick conversion of avoirdupois weights to the metric system, 
which is used in all the Latin American countries. 

How to Determine the Measurements of a Shipment. — The 
measurements of a shipment must invariably be calculated by 
the extreme length, breadth, or thickness. If battens or strips 
are nailed along the end of a case, the tape must be passed around 
the outside thereof. Accuracy is very essential as numerous meth- 
ods of calculation are involved, but the safest plan is to multiply the 
figure of the three dimensions as stated, after reducing them to 
inches by using 1728 (the number of cubic inches in a cubic foot) 
as a divisor ; the result will be the cubic contents. This, of course, 
can easily be reduced to feet. 

The Meaning of Minimum Bills of Lading. — All steamship lines 
fix a minimum charge for the freight carried on one bill of lading. 
In making this charge no account is taken of the amount of the 
weight or bulk of the freight. Because of this fact, forwarding 
agencies seek to combine several small shipments on one bill of 
lading in order that the freight on each individual shipment may 
be more reasonable. 

Rates Dependent upon Shape. — As the largest dimensions are 
taken for length, breadth, and thickness, great care should be 
exercised in planning the packing, as the steamship company is 
accustomed to make an extra charge for "dunnage." By this is 
meant the cost of using lumber carried on -the steamship to provide 



FEEIGHT FORWARDING 185 

for the proper stowing in the hold of the vessel of packages of 
this shape. This applies with particular force to an irregu- 
lar bulk. 

The Meaning of the Word "Mmage." — Beginners in the export 

business frequently wonder at the word "primage," which is used 
in most ocean freight rates. This is a survival of an old custom 
which permitted the master of the vessel, or his seamen, to re- 
ceive a payment for particular care in handling shipments in- 
trusted to them. While this naturally has long since been discon- 
tinued, the primage is still charged, and may be the profit to the 
steamship line itself, to its agents, or to its solicitors. Naturally 
to the shipper it is of slight interest to whom this payment is made, 
but it must invariably be figured as part of the freight rate. 

Unsettled Steamship Rates Compel Contracts. — Rates for carry- 
ing freight to Latin American ports fluctuate greatly and are 
governed solely by the law of supply and demand. In 1914, one of 
the results of the European War was the instant soaring of 
freight rates due to lack of steamship facilities. 
Sow to Obtain Rates. — Rates may be obtained from the follow- 



ing sources: 

1. The Commercial or Export Freight Agents of the Railroad 
Companies. Railroads with a large tonnage have established regu- 
larly organized foreign departments whose services will be found 
valuable. 

2. From Steamship Agencies. Many steamship companies have 
agents in interior points who are in position to give information 
relative to rates of freight, dates of sailing, etc. Such informa- 
tion may also be obtained by applying to the offices of the steam- 
ship lines at the seaboard. 

3. From Responsible Forwarding Agents. By reason of their 
volume of business, they are enabled to contract with steamship 
lines for space, which they in turn sell at a profit. By correspon- 
dence with several agents the best rates may be obtained. The 
question of ocean rates should be thoroughly investigated inasmuch 
as they are not fixed and there is no law which regulates them as 
in the case of railroad freight rates. 

Handling* of Shipments l;o Remote Points. — Shipments made to 
Latin America are not infrequently consigned to places very diffi- 
cult of access, to which neither railroad nor steamship agents are 



186 EXPORTING TO LATIN AMERICA 

in a position to quote rates. When a through rate is desired, the 
manufacturer can easily obtain it by communicating with reli- 
able freight forwarding houses in New York. The latter, by reason 
of their relations with customs brokers in the Latin American 
republics and other import agents, have unusual facilities for ob- 
taining a knowledge of local foreign conditions. 

Importance of Shipping Documents. — No matter where ship- 
ments originate, nor how they are forwarded, the necessity for 
proper documents remains the same inasmuch as shipments car- 
ried to Latin American ports by steamship companies must leave 
via a port. In the United States, the greatest volume of exports 
is via the port of New York, but shipments via other ports, such 
as Boston, Philadelphia, Mobile, New Orleans, and San Francisco, 
are increasing at a very rapid rate. No matter what agency is 
used for forwarding the goods, it is indispensable that documents 
should be in the possession of the consignee when the shipment 
arrives and as long before that as is possible in order that arrange- 
ments may be made for the payment of the duty, the disposal of 
the goods, etc. The failure of manufacturers to attend to the 
prompt forwarding of documents often leads to serious complica- 
tions, expenses for storage, and other items which are invariably 
charged to the shipper. 

For Shipments "in Transit." — When a shipment is consigned 
via a port in a country other than the ultimate destination, that 
fact should be specified. Thus a shipment for La Paz, Bolivia, if 
consigned via Mollendo, Peru, should be clearly marked on the 
papers, "Mollendo, in transit to La Paz." This will avoid diffi- 
culties with custom houses, likewise the payment of storage charges 
and other unusual expenses for freight and handling. 

Forwarding Documents for Shipments via Frontier Points.--^ 
Many shipments are made by American manufacturers direct to, 
Mexico. The importation of such shipments is attended to by 
custom house agents whose names are usually given by the im- 
porters. They may also be obtained from the railroad agents 
and directories. When forwarding shipments of this character, 
a copy of the bill of lading, together with copies of the invoice, 
should be sent to the customs agent at the particular port of entry 
through which it is necessary to consign the shipment, with the 
recj^uest that the iiecessary documents be obtained and the shipment 



FEEIGHT FORWARDING ISt 

cleared and dispatched to the interior with the least possible delay. 
The original invoice, together with the railroad bill of lading, is 
sent direct by the manufacturer to his customer. 

Payment of Inland Freight. — No matter to whom goods are 
consigned at the seaboard, whether to export agents, to freight 
forwarders, or to a steamship company, the inland freight should 
be prepaid, inasmuch as doing this obviates considerable delay in 
forwarding the shipment and simplifies its dispatch from the 
port. When the shipment has been placed on board the railroad 
and the bill of lading obtained, the latter, together with copies of 
the invoice, should be sent to whosoever will attend to the for- 
warding of the shipment from the port. Any instructions re- 
ceived from the customer should also be given. 

Avoiding Excessive Transfer Charges. — One of the charges 
against which many complaints are directed is that of transferring 
shipments from the freight station of the railroad company which 
hauls the shipment from the point of origin to the seaboard. This 
is particularly true when shipments are handled in the port of 
New York, inasmuch as local conditions make transfer charges 
necessarily very high. Because of the numerous and widely scat- 
tered terminals and steamship docks, it is of the highest importance 
that the inland shipper should consign his shipment to the railroad 
pier nearest to the steamship line which is to carry it. In such 
calculations the export freight agents of the railroad companies are 
of great assistance, as are also reliable forwarding agencies. Ship- 
ping clerks should be warned carefully to investigate this matter, 
inasmuch as shipments to Latin America are carried by different 
lines, and it should be determined in advance of the shipment 
exactly what steamship company shall handle it, in order that 
proper directions may be supplied. Transfer charges represent 
the expense of hauling or trucking and ferrying shipments from the 
freight depot of the inland carrier to the pier or wharf of the out- 
going steamer. Unscrupulous forwarding agents prey on the igno- 
rance of the shipper and make unwarranted charges for such 
services. 

How to Take Advantage of Free Lighterage. — The privilege of 
free lighterage granted to freight shipped in carload lots is an 
important factor to large shippers. In order to obtain the benefit 
of this privilege every bill of lading for freight in carload lots 



188 EXPOETING TO LATIN AMERICA 

should read very definitely, "lighterage free." If this is not done, 
extra charges are assessed for cartage from the railroad freight 
depot to the steamship pier. In the event that the latter is in 
Hoboken or Brooklyn, an extra charge for ferriage will also be 
added. Regulations relative to free lighterage in the port of New- 
York may be obtained through forwarding agents. 

The Use of Shipping Permits. — No matter if the shipper himself 
or his agent arranges for the. forwarding of a shipment from a 
port, it is indispensable that a shipping permit be obtained 
from the steamship company. This permit is gotten in the 
name of the shipper or the freight forwarder who has obtained 
from the steamship company a contract for the room. In a per- 
mit are specified the date that the shipment is to be delivered 
to the steamer, the exact place where it is to be delivered, and 
other instructions, all of which must be carefully complied 
with. 

How Goods Are Delivered. — Teamsters or truckmen carrying the 
shipment for which a permit has been issued must present it 
to the clerk of the steamship line on the pier before delivery is 
made or simultaneously with the shipment. It is highly important 
that merchandise shipped in bond shall not be delivered to the 
steamer until the latter is ready for loading. 

The Use of Shipping Keceipts. — The usual dray ticket will gen- 
erally suffice for obtaining a receipt from a steamship company. 
In such instances, however, it is essential to obtain special blanks 
which are supplied gratis by the steamship lines. As already stated, 
it is advisable to number packages and to mark them with the 
utmost care. Such numbers and marks must appear on the dray 
ticket or receipt issued by the steamship company. The exact con- 
tents of cases, barrels, or packages must be absolutely and correctly 
stated. Dray tickets or receipts must be arranged in the name of, 
or indorsed to, the individual to whom the steamship bill of lading 
is issued. The receipts are taken up by the steamship line at the 
time of issuing the bill of lading. 

The Use of Custom House Clearance. — One of the documents 
of greatest importance in the forwarding of freight from all 
American ports is the custom house clearance. This is a form 
which the collectors of customs are compelled to demand in order 
that steamers may be properly cleared. The steamship lines that 



FREIGHT FORWARDING 189 

carry freight to Latin American ports are among those which 
are most vigorous in their complaints relative to the failure of 
shippers to present proper custom house clearances when bills 
of lading are issued. The custom house clearance is a document 
which must be carefully filled out in accordance with certain 
official instructions and is filed by the steamship lines, together 
with its own manifests, in the United States Custom- House. A 
copy should be reserved by the shipper for use in special cases; 
for instance, in the event that shipments are returned to the 
United States, the custom house clearance serves absolutely to 
identify the goods and may obviate the difficulties of an assess- 
ment of duties. 

Proper Custom House Clearances Required. — It is difficult for 
the manufacturer in the interior, unacquainted with the regulations 
incident to the exporting of merchandise, to understand many of 
these requirements and exactions. It is, however, important to 
realize that when goods forwarded for export are not described 
to the satisfaction of the United States custom house authorities, 
not only in reference to description of the article but as to quantity 
and value, the sailing of a vessel may be delayed until these re- 
quirements are complied with. The need for this is obvious, as 
the shipment of contraband or articles forbidden because of certain 
international agreements might involve the United States in serious 
difficulties. 

Regulations to Supply Custom House Clearances. — The United 
States government insists that shipper's manifests or custom house 
clearances must be sworn to by the consignor in person, by the 
owner, or by a properly constituted and capable agent of legal age. 
When such an agent is appointed, the nomination must be made 
in writing by the principal, and the agent must possess a full 
knowledge of the value of the shipment. Railroad companies are 
not permitted to carry export shipments or consignments to non- 
contiguous territories of the United Sta,tes, such as Porto Rico, 
Panama, the Hawaiian Islands, the Philippines, etc., unless they 
first obtain a detailed description of the shipment, its actual cost, 
a memorandum of quantity, etc., all of which statements require 
the signature of the shipper or of his agent. 

Useful Publications in Shipping Problems. — ^There are several 
important publications which are valuable aids in the solution of 



190 EXPORTING TO LATIN AMERICA 

shipping problems. These are listed on page 490 of the Ap- 
pendix. 



BANKING DOCUMENTS, ACCEPTANCES AND THEIE 
COLLECTION 

Bankers' Credits and Drafts. — American manufacturers who- 
have received orders from Latin American countries have often, 
without investigation, informed their correspondents that no ship- 
ment would be made unless cash was sent. Not infrequently such 
refusals have been made to firms enjoying in their own countries 
the same or perhaps a better credit than the manufacturer. In 
view of the fact that many firms in Latin America have frequently 
been victimized by American manufacturers or export houses to 
whom they made remittances in. advance, they naturally hesitate 
to remit unless assured of the responsibility of the dealers with 
whom they wish to do business. These difficulties have been ob- 
viated by the establishment of what is known as "bank__cre^it," 
which serves to protect both the buyer and the seller. Its operation, 
which is very simple, merely consists in the payment by the bank 
(with whom the credit has been established for the account of the 
Latin American merchant) of a definite sum upon the presentation 
of the bill of lading, covering the shipment. When such credits 
are arranged the bank notifies the manufacturer, and by this means 
large importers of Latin America have been enabled to take ad- 
vantage of every discount obtainable by the payment of cash. 

What a Draft Is. — A draft is a document drawn either by a 
manufacturer or merchant on a debtor for value received. Drafts 
are of various sorts. They may be drawn either with or without 
documents attached. In the latter case the draft, which is usu- 
ally drawn at sight or payable at a certain definite time, must 
be accepted by the drawee before the documents are handed over 
by the bank, to enable the consignee to obtain possession of the 
shipment. 

These documents are the bills of lading issued by the railroad 
companies or by the steamship lines. When such documents are 
issued by the railroads, they are called "exportbills" and cover 
the carriage of the merchandise from poinTol oj-ighi to destina- 



BANKING DOCtJMENTS 191 

tion. The "original'' bills of lading are those issued by the steam- 
ship companies from the port of sailing. 

The Different Kinds of Drafts. — As a matter of convenience to 
dealer and banker, drafts on Latin American merchants should be 
drawn at a certain number of days sight (say 5 or 10), as the 
exact date on which they are payable is thus quickly seen. 

Drafts are of two kinds, "documentary," and "clean." The 
first is merely a draft which, after certain documents, including 
the bill of lading, are attached, is forwarded to a bank and subject 
to acceptance or payment. A "clean" draft is a draft drawn on 
a consignee without documents. The latter is frequently used 
as a spur to debtors whose accounts are not paid at maturity. A 
failure to pay a documentary draft often results in a serious im- 
pairment of credit, while but little attention is paid to the non- 
payment of a clean draft which may or may not represent an 
indebtedness. When drafts at sight are accompanied by bills of 
lading, payment on presentation is expected, but in most instances 
such documents are held by banks until arrival of the merchan- 
dise. When drafts are drawn payable at a given time they are 
known as D.A. (documents to be accepted), or D.P. (documents 
to be paid). 

Handling of Drafts "to Order." — Shipments to Latin America 
are made either direct on open account or "to order" against ship- 
ping documents. The first method requires no detailed explana- 
tion. The second means that shipments are made to the order 
of the shipper on a bill of lading which reads "to order," and at- 
tached to which is a draft payable at sight, or at a certain definite 
date, or at a certain number of days sight. In the latter instance, 
when the draft is accepted by the drawee (i. e., his name written 
across the face of the draft), it is known as an "acceptance" and 
handled as such. Most of the shipments made to the republics of 
Cuba and Mexico, to some points in Central America, and to the 
United States Territory of Porto Eico are on open account. The 
acceptance is of the greatest importance in international commerce, 
as it permits the houses of established reputation to use their 
credit freely in doing business and extending their sales. Ship- 
ments to order may be made with perfect safety to all the Latin 
American countries which protect the order bill of lading. This 
means that only with the bill of lading, consular invoice, and mani- 



192 EXPORTING TO LATIN AMERICA 

f est is it possible to obtain possession of shipments. The bill of lad- 
ing covering a shipment consigned to order is attached to a draft 
which must either be paid or accepted before the bank or corre- 
spondent of the shipper releases this important document. There 
are but four countries in Latin America where goods shipped on 
order bills of lading may be obtained without the original bill of 
lading. These are : Colombia, Panama, Santo Domingo, and Vene- 
zuela.^ "To Order" shipments are prohibited by Venezuela. >> 

Shipments made to t;hege Republics on the order bills ^^lading 
do not have the security of those shipped, to other Latin American 
republics, and consignees have frequently obtained possession with- 
out the bill of lading. It is, of course, possible to ship on order 
bills of lading and drafts can be forwarded for collection, with the 
bill of lading attached, through banks or other correspondents. 
While shipments made to houses of recognized standing run no 
risk whatever, it is important that unusual care should be taken 
in making investigation of applicants for credit. 

Handling Bills of Lading with Drafts. — On all documents relat- 
ing to the export business absolute accuracy is indispensable. This 
applies with particular force to bills of lading, especially when they 
become parts of credit transactions and are to be used in connec- 
tion with drafts which are discounted by banks. 

Following are particulars to be followed in preparing bills of ; 
lading: 

1. They should be issued to order of the shippers. The latter 
must place on them . an indorsement in blank that the title to 
the merchandise may remain as a lien to the holder of the 
draft. A ) 

2. \ All copies of the bill of lading must be furnished to the bank 
which discounts the draft. 

3. The number of copies of the bill of lading issued must al- 
ways be stated on the face of the bill of lading. These must be 
supplied in duplicate or triplicate. 

Other Documents to Be Attached to Drafts. — With every sh^'p- 
ment carrying drafts against documents it is highly important to 
nipply an insurance certificate. Like the bill of lading, it is made 
to the order of the shipper and indorsed in blank. This enables 
the holder to collect for loss of the shipment in case it should be 
necessary to make a claim. The certificate is for the amount of 



BANKING DOCUMENTS 193 

the shipment plus something in excess of the invoice value, usually 
10 per cent., to cover the freight and other charges. Another docu- 
ment that is desirable, but not indispensable, is an invoice covering 
the shipment of the goods. This serves to increase confidence in 
the reliability of the document. If desired, it may be inclosed 
in an envelope attached to the draft, being sealed to guard against 
publicity. 

Exaxjtions of Banks Regarding Bills of Lading. — In the fi- 
nancing of shipments for export, trouble sometimes arises with 
shippers who turn over to the banks drafts with only the domestic 
railroad bill of lading, and, in some instances, merely a dray 
ticket bearing the rubber stamp signature of a local freight agent. 
Banks invariably insist upon having attached to the drafts either 
all copies of the original bill of lading or the copies of the bill 
of lading issued by a railroad company. This is due to the fact 
that ownership of the property is vested in the bill of lading; 
consequently the freight carrier who issues it must accept re- 
sponsibility and likewise protect the shipment. From this reason 
an inland railroad bill of lading is superseded by an ocean bill 
of lading, inasmuch as two sets of documents cannot govern a single 
shipment. 

Making Bill of Lading "to Order." — It is almost the invariable 
custom in handling shipments to Latin America to use bills of 
lading which are consigned "to order.'' This is done by writing 
on a bill of lading, in the place where the consignee's name would 
be written, "order," or "shipper's order," and under this "Notify 
(the name and address of the consignee)." In handling such bills 
of lading before forwarding them they are signed by the shipper 
and on the back is placed an indorsement, this being usually in 
blank. 

How to Insure Prompt Forwarding of Documents. — ^When ship- 
ments are made to republics on the east coast of South America, 
all the documents relative thereto should be forwarded by the 
same steamer which carries the freight, thus assuring their 
prompt delivery to the consignee. As the lines which ply in the 
South American trade do not issue ocean bills of lading to the 
freight forwarders (or to the agents of the shippers) until the 
shipments are in the holds of the vessel, it usually happens that 
such bills of lading are probably not available until a day or two 



194 EXPOBTING TO LATIN AMERICA 

* 
before thQ sailing of the ship. For this reason also a responsible 

forwarding agent should be employed, the expense being relatively 
small in comparison to the service obtained. As many manu- 
facturers are at too great a distance inland, no time is left for them 
to obtain the ocean bill of lading, which they must sign and in- 
dorse that the shipment may be properly forwarded. By making 
special arrangements with interior banks, the correspondent of 
the latter, located in New York City, is enabled to furnish proper 
protection. The correspondent, having been granted written au- 
thority or holding the power of attorney of the manufacturer, can 
sign and indorse the bills of lading and mail them togethe)- with 
drafts, shipping manifests, consular invoices, and all other neces- 
sary documents, by the same steamer which carries the freight. 

The Sfending of Documents for Acceptance. — If it has been 
understood, in transacting business with the Latin American mer- 
chant, that a draft is to be made for the value of the merchandise, 
and the manufacturer either does not care to discount the draft 
or is unable to do so, the draft accompanied by the bill of lading, 
insurance certificate, invoice, etc., all properly indorsed, is sent 
forward for acceptance. The manufacturer frequently sends the 
documents direct to the foreign bank in order to minimize the 
charges for collection. If the draft is at 60 days sight the con- 
signee, upon notice that the draft is in the hands of the bank, 
personally Jjvrites across the face of the draft "Accepted,'' and 
the date/"*^ 

The documents covering the draft are then handed to him and 
the draft is held until maturity when it is again presented and 
collected. In the event 'that the draft is not paid the bank may 
cable for instructions or return it to the drawer. 

The Routine of Making Shipments to Order. — When a manu- 
facturer makes a shipment consigned to Latin America with draft 
attached to bill of lading, the following routine is observed : 

It must first be determined whether the shipment is to be 
made direct or in care of a forwarding agent. If a manufacturer 
instructs his agent to handle a shipment he must give full direc- 
tions as already outlined, and accompanied with instructions re- 
garding the draft. If the manufacturer forwards a shipment in 
care of a steamship agent and will himself attend to the forward- 
ing of documents for collection, he must direct that the consular 



BANKING DOCUMENTS 195 

> 

invoices, ocean bills of lading, etc., be forwarded to him. When 

these are returned, the original and duplicate bill of lading, the con- 
sular invoice (as many copies as may be required under the laws 
of the country), the shipping manifest, and the insurance policy 
are attached to a draft. The latter is made out in accordance with 
the terms granted by the manufacturer's representative, or as 
previously arranged. In the draft is stated at how many days 
sight it is drawn, or the exact date it is payable. All drafts are 
made in duplicate, and, in order to insure the payment of only 
one draft, the duplicate bears the clause that it shall only be 
paid in the event that the original is not paid. 

How Drafts Are Forwarded and Collected. — Drafts are always 
drawn to the order of the manufacturer and indorsed in blank. 
There are various methods of collecting a draft: (1) It may be 
placed with a manufacturer's local bank which forwards it to a 
New York correspondent which in turn sends it to its own cor- 
respondent in Latin America; (2) it may be sent direct by the 
manufacturer to the New York agent of a bank whose business 
is in Latin America; (3) it may be forwarded direct by the manu- 
facturer to the foreign bank. The factors which determine the 
method to be followed are these : the charges usually paid for col- 
lecting, or the relations of the manufacturer with the correspondent. 
Upon arrival of the draft at its Latin American destination, if 
all its documents are found in order, the draft is accepted payable 
upon the date to be specified in the body and thereupon the docu- 
ments including the original bill of lading, consular invoice, etc., 
are delivered. 

Important Detail in Making Draft. — Instructions concerning 
the handling of drafts should be very explicit. The banker or 
correspondent should be notified what course to pursue in the 
event of the nonpayment or nonacceptance, and what extension 
of time, if any, should be granted. If documents are to be de- 
livered only upon payment this should be clearly stated; otherwise 
they may be given to the drawee upon mere acceptance. Instruc- 
tions should also be given as to protest in case of the dishonoring 
of the draft. Drafts on South America are usually drawn in 
pounds sterling for the reason that by this method possible losses 
from bankers' charges in conversion and collection are avoided. 
Such drafts should always bear a clause, "Payable at th^ bank's 



196 EXPORTING TO LATIN AMEEICA 

selling rate for sight draft on London," or "For 90-day drafts on 
London," in accordance with the terms agreed upon. When drafts 
are drawn in dollars the following clause should be used: "Pay- 
able at the bank's selling rate on New York." 

The Documents Required by a Bank. — The utmost care is neces- 
sary in the preparation of documents for shipments upon which 
banks advance money against acceptance. The following papers 
are required by banks which discount drafts: 

^ 1. The original commercial invoice and bill of lading. 
V 2. The necessary number of copies thereof, in accordance with 
the customs regulations of the country to which the shipment is 
consigned. 

^3. Consular invoice, together with the necessary number of 
copies thereof. 

\/ 4. Marine insurance certificate. 
^ 6. Any other documents provided for in the regulations of the 
Latin American republics. When a shipment is carried by a steam- 
ship line, the original ocean bill of lading must be attached, to- 
gether with any negotiable copies that may be issued. Where an ex- 
port bill of lading is issued by a railroad company, the original 
and negotiable copies thereof are also required. 

Interest and Commission on Accepted Drafts. — As the granting 
of time by reason of a draft at a certain period sight is in reality 

/''a concession of credit, it is customary for the consignee to pay 
the interest on the draft. This is calculated from the date of 
the shipment to the maturity of the acceptance. It is almost 
always calculated before the amount is inserted on the draft, as this 
is for a definite sum to which interest is not added. In addition' 
to the time as specified in the draft a provision is jnade for the 
period during whieh the remittance is in transit. A shipment 
consigned via New York to a point in Chile would require on an 
avera^ about seventy-five days before the proceeds of the draft 
could re^ch the United States. Thus, if the draft were drawn 
at sixty days sight, there would be added thereto the period of 
vseventy-five days, a total of one hundred thirty-five days for which 
interest would have to be included. Before a draft is made it should 
be definitely ascertained for what time the interest should be 
figured. The best places to obtain this information are the banks, 
which are fully aware of the time required. Another charge that 



BANItlNG DOCUMENTS Idt 

is made is that for collecting. This may also be determined in 
advance by consulting the banks, which have a schedule of all 
the charges made by their correspondents. 

The Items Which Should Be Included. — There are certain 
charges for which invoices must be rendered, and which must 
be included in the total of the draft, but it is generally wisest to 
render a separate invoice for these charges rather than include 
them on the bill for the merchandise. These items should be: 
\/l. Inland freight. 
^2. Ocean freight. 

\/S. Consular fees, including the cost of the blanks, certification 
and the bills of lading, and invoices. 
^ 4. Forwarding charges of agents. 
^ 5. Marine insurance. 
W 6. Interest. 
ly 7. Collection charges. 

Understanding Regarding Collection Charges. — ^As many vexa- 
tious differences arise relative to the charges for collecting drafts 
(interest, postage, exchange, commissions for collection), the manu- 
facturer should have, at the beginning of business relations, a 
definite understanding as to who is to pay the cost of collection. 
Many exporters insist that the customer pay .these charges, and 
as the cost may reach a large total it is essential that the ques- 
tion be determined very early. 

The Theory Regarding Charges. — When a Latin American mer- 
chant places an order in the United States he arranges to make 
payment here or, in the contrary event, to have a draft drawn 
against him. In the latter case it should be definitely stipulated 
whether the draft is to be drawn in dollars or the money of the 
country to which shipment is consigned. The Latin American 
buyers are very prone to object to the charges for exchange and if 
the latter is unfavorable they will endeavor to place the expense 
on the shipper. In any event, as there will always be a charge for 
collection, this question should be definitely settled at the opening 
of relations. 

Charges Made for Collecting Drafts. — The charges made for 
collecting drafts vary greatly but when documents are sent direct 
to a foreign bank by the shipper the charge in the more important 
commercial centers is % to % per c6nt. When drafts must be 



m EXPORTmO TO LATIN AMERICA 

sent from the main office to the branches in the interior, the 
charges are larger, each handling incurring an additional expense. 
In the event that drafts are forwarded direct to remote points the 
charges are also lower, varying from % to 2 per cent., although 
the latter charge is very rare. 

Where Payments Are Usually Made. — Because of the fact that 
a credit of sixty days corresponds almost to cash terms in dealing 
with Latin America, the charges for interest and collection are 
calculated only when the acceptance reads at sixty or ninety days 
sight or at a longer period after the arrival of the shipment. 

How to Obtain Lowest Possible Rates. — Manufacturers who dis- 
count drafts may find it to their interest to take advantage of 
ban kers' sight exchange on Lo ndon. Whenever a manufacturer 
discounts a draft covering a shipment of merchandise, he is prac- 
tically negotiating a loan. When a draft is made at ninety days 
sight on a Latin American country, it is possible to obtain a ninety 
days sight exchange on London at a much lower rate. This is due 
to the fact that in Latin America the interest rate is extremely high 
and very much in excess of that of the United States and England, 
Germany, France, Italy, and Spain. 

Procedure in Event of Non-payment. — l^o matter with what 
care credit is extended to Latin American buyers, it sometimes 
happens that drafts drawn against documents are not accepted. 
When such drafts have merely been forwarded for collection the 
maker (if he indicated his desire to be notified) is advised by 
cable or mail and must arrange for disposition of his shipment, 
which can be done either by ordering its return or by ar- 
ranging with some other importer for its acceptance. When a 
draft that he has accepted is protested because of non-paymeiit 
the drawer may place the matter in the hands of a lawyer recom- 
mended by the bank to whom the documents have been forwarded. 
This is occasionally necessary in the case of responsible firms 
who find it impossible to meet drafts at maturity. 

How Drafts May Be Discounted. — It is possible for a responsible 
manufacturer, who makes his shipments with drafts attached to 
documents for definite acceptance, to realize cash immediately upon 
forwarding of the goods. The discounting of such drafts will 
become far more common than it has been in the past, particularly 
as the recently enacted National Banking Law makes available 



BANKING DOCUMENTS 199 

such a large sum of money for discounting. The discounting of 
such drafts is still considered a loan to a shipper, although it should 
not be so regarded. However, the accommodation should be easily 
obtained by a drawer whose credit is good. 

The means for discounting these drafts are as follows : 

1. The manufacturer's local banker. It will be somewhat easier 
in the case of banks which have foreign departments. 

2. Banking institutions in the port cities, particularly New 
York. 

3. Private banking houses in New York City. 

4. The branch offices of banks whose principal business is in 
Latin America. 

5. Responsible forwarding agents. 

It is naturally far easier to undertake such transactions with 
banks which are thoroughly familiar with conditions in the Latin 
American countries. As the trade develops and specialized knowl- 
edge increases it will become still more so, and the discounting of 
drafts will be regarded with less suspicion than it has been in 
the past. 

Discounted Drafts Represent Credit Transactions. — ^Where a 
manufacturer makes a shipment, documents attached to bill of 
lading, the draft to be accepted at a fixed period, even though he 
is successful in it and realizes the money his responsibility remains 
until the draft has been paid by the customer. It is even more 
important to the manufacturer to investigate thoroughly the credit 
standing of his customers and determine their responsibility when 
arranging the discounting drafts, as their failure to make pay- 
ments reflects upon his standing. Although there is no fixed cus- 
tom, the manufacturer frequently calculates the interest for the 
full period from the date draft is issued until returns therefrom 
are in his possession, compelling the consignee to pay it. 

Acceptance of Time Drafts. — One of the sources of loss to Amer- 
ican manufacturers has been the acceptance by them of drafts 
which seemed perfectly good documents but which developments 
proved to be worthless. The method employed in these swindles 
has been as follows: 

The house in Latin America ordered a bill of merchandise from 
an American importer. Accompanying the order was a draft at 
90 or 130 days si^ht on §ome firm in England, Germany, or 



200 EXPORTING TO LATIN AMERICA 

France. The manufacturer placed it in the hands of his local 
banker for collection; the latter forwarded it to his correspondent 
who obtained without any difficulty the acceptance of the drawee. 
Being satisfied that the draft would be paid, the merchandise was 
shipped. When the time specified in the draft expired and the 
draft was presented for payment, it was refused, and the American 
manufacturer realized too late that he had been victimized. Credit 
should not be based on drafts drawn in this manner unless the 
responsibility of the firm against whom the drafts are drawn is 
thoroughly investigated. 



(/^ 



CHAPTER XII 

CREDITS IN LATIN AMERICA. TERMS, FINANCING, COLLECTING 
PAST DUE ACCOUNTS 

Introduction. — One of the complaints most frequently made by 
American consuls and Latin American merchants who have sought 
to establish trade relations with American exporters is that the 
latter often refuse to grant credit and insist upon payment before 
shipment. When it is realized how difficult it would be to estab- 
lish a domestic business under such conditions, it is apparent why 
trade with Latin America cannot be built in that manner. The 
conditions affecting credit risks in most of the countries are 
such that if an effort is made to ascertain the standing of an im- 
porter very little risk is run. For this reason the importance of 
extending credit must be recognized and a competent credit man 
can as easily determine whether merchants in Buenos Aires or 
Bogota are entitled to credit as he can intelligently determine 
this question in the case of the small merchant in a neighboring 
town. 

Misunderstandings Reg-ardingf Terms. — The assertion is fre- 
quently made that European countries have been so successful in 
Latin America because. of the terms granted by them, and it has 
been urged by many American manufacturers that because of 
this they are unable to enter the markets^^^t is sometimes for- 
gotten that in certain lines of manufactures in the United States 
the custom still prevails of granting terms which, if extended to 
Latin America, would be considered very long. An instance of 
this practice is the datings granted by manufacturers who make 
shipments to their customers in the Western or Southern states, 
beginning early in May, with invoices payable October 1st to 
November 1st. It sometimes occurs that at maturity such accounts 
cannot be paid and even a further extension is necessary, although 
this is not usual. Manufacturers who can grant such accommoda- 
tions in the United States should find no difficulty in extending the 

^01 



202 EXPOETING TO LATIN AMEEICA 

same terms to Latin America. On the other hand there has been 
a noticeable effort in certain quarters to shorten the time granted 
Latin American buyers by European houses. 

Misunderstandings Regarding European Methods. — The credit 
methods of European exporters are frequently misunderstood. Gen- 
erally speaking, European manufacturers observe the same methods 
that a w6ll-managed American house would use in granting credits 
to clients. The traveling representative is an important factor, as 
he is expected to make personal investigation, which is regarded 
as of great value by his firm. 

European Terms in Latin America. — The terms upon which, 
importations are made from European countries vary, but 90 days 
credit is generally given. In addition there is an allowance of 30 
days for the arrival of the merchandise and 30 days for receipt 
of the payment of drafts, a total of 150 days credit, for which 
accommodation 6 per cent, interest is paid. In some instances, 
responsible houses discount their bills as in the United States,' 
while others find it desirable to take advantage of the longer credit 
terms of European houses. The European exporter, as a rule, 
draws drafts against acceptance, which he in turn discounts with 
his bankers. However, a considerable volume of business is trans- 
acted on open account with periodical settlements, interest at 6 
per cent, usually being charged for the time that the account 
is open. 

Why Dealers in Latin America Require Time. — An analysis of 
the commerce of Latin American countries makes it possible to 
account for the frequent requests for longer terms than are cus- 
, ■\ tomary in the United States. In practically every country and 
^' on almost all articles duties must be paid, and sometimes the 
latter, together with the freight charges, represent a cash outlay 
equaling 50 per cent, to 70 per cent, of the value of the goods. Be- 
cause of conditions, the stocks cannot be delivered as often as in 
the United States and frequently, in order to justify direct im- 
portations, larger quantities must be purchased than are actually 
needed for immediate requirements. The purchasing power of the 
people per capita is considerably smaller than in the United States. 

The Effect of Agriculture. — In almost all of the countries the 
credit system has grown out of conditions which the importers 
deplore but for which they are not responsible. The Latin Amer* 



CREDITS IlSr LATIN AMERICA 203 

ican republics are essentially argicultural and will continue to 
remain so indefinitely. The crops vary according to the countries 
but are largely seasonal. The importers frequently, like the gen- 
eral merchants in agricultural communities in the United States, 
must finance the natives, and are compelled to wait until returns 
can be had from crops. The lack of sufficient capital for local 
needs increases the necessity for credit. This does not apply to 
every concern, but even in the case of many business houses of 
high standing and large affairs a long credit is desirable because 
of the extent of business done. 

Infrequency of Bankruptcy. — The financial solidity which is a 
Latin American characteristic is naturally due to the conservatism 
of the business men. The commercial mortality is much lower 
in the Latin American countries than in the United States. 

Although failures occur, particularly in the rapidly advancing 
communities such as Buenos Aires, Rio de Janeiro, Santiago, and 
other large cities, they nevertheless are not more disastrous than 
failures in the United States. In almost all places, failure is 
regarded as a serious reflection upon the character and good faith 
o£ the merchant, and every effort is made to avoid it. 

Percentage of Losses by Bad Debts. — American manufacturers 
who have intelligently sought Latin American business have proved 
through their experience that by observing caution and by pur- 
suing the same methods as in the extension of credit at home, 
their losses in Latin America have been practically nil. However, 
under no consideration, should shipments be made without a thor- 
ough investigation — because of the swindles often attempted. 

How Credit Information May Be Obtained. — There are various 
means of obtaining credit information on houses in Latin America. 
Following are the principal means: 

1. Mercantile agencies; R. G. Dun & Co., and Bradstreet's. 

2. Business organizations, such as the National Association of 
Manufacturers, New York ; the Philadelphia Commercial Museum, 
of Philadelphia, Penn. ; the American Manufacturers' Export As- 
sociation, New York. 

3. Foreign departments of American banks and branches of 
foreign banks in New York City. 

4. Banks located in the city or territory where the order orig- 
inates. 



204 EXPORTIXa TO LATW AMERICA 

5. American or foreign concerns with which the Latin Amer- 
ican importer has done business ^nd whose names are given by 
him as references or are obtained by traveling representatives. 

6. Traveling representatives or local agents are often able to 
obtain at first hand the most reliable information upon which to 
base the extension of credit. 

7. Trade papers, export journals, etc., as a part of their service 
volunteer to obtain credit reports for their advertisers. 

8. Exchange Bureaus. Many manufacturers now use exchange 
service such as the Credit Clearing House and the National Asso- 
ciation of Credit Men. The latter organization conducts a foreign 
trade bureau similar to the domestic service. 

The Service of Mercantile Agencies. — The credit reports fur- 
nished by the two leading agencies of the United States on Latin 
American houses are almost invariably equal to those on domestic 
firms. Branch offices are maintained in the principal capitals, 
while agents and commercial correspondents in almost all com- 
mercial centers make it possible quickly to obtain detailed reports 
where none are on hand. The files of these institutions are being 
constantly enlarged and the cost of the reports has steadily de- 
creased while the efficiency has increased. The reports on Latin 
American firms cost more than those on domestic houses. 

The Reports of Business Orgunizations. — Membership in com- 
mercial organizations such as the National Association of Manu- 
facturers, the Philadelphia Commercial Museum, etc., entitle mem- 
bers to a certain number of credit reports. When the number is 
exhausted an extra charge is made. The information desired is 
frequently on file, but when not, it is obtained by correspondence 
with bankers, merchants, and business houses in general. 

Banks in New York City. — Manufacturers located in interior 
cities may ask their local banks to obtain for them reports on 
merchants in Latin America. These records are supplied by the 
foreign departments of banks located in New York, which in turn 
obtain them from their correspondents. 

Certain banks which make a specialty of Latin American busi- 
ness maintain very complete files and are constantly increasing the 
number thereof. A list of banks which are particularly interested 
in this subject will be found on page 504. 

Banks in Latin America. — Direct information may be obtained 



CKEDITS IN LATIN AMERICA 205 

by writing to banks located in the city where the merchant or 
importer who sends the order is in business. Such a report is. 
usually reliable and the mere statement of a btok that a merchant 
is worthy of credit is sufficient, even though no details are given. 
In this connection there should be noted a very marked character- 
istic of credit reports from Latin America. Replies of bankers 
are often laconic and confined to a bare statement that the person 
concerning whom the inquiry is made is worthy or unworthy of 
confidence. Because such reports are, as a rule, honest, they' are 
as valuable as more extended information. 

When making inquiry of a foreign bank an international post 
office coupon should be inclosed, and in the event that a charge is 
made for the report (which is not always the case), it should be 
promptly remitted by international post office money order. 

American or Foreign References. — Naturally in transacting 
business with Latin American merchants references should be ex- 
acted. The names of firms with whom business is done are espe- 
cially desirable. 

Inquiries may be addressed to such houses, but information 
should not be asked of a competing manufacturer. Letters to 
foreign manufacturers should invariably be accompanied by inter- 
national post office coupon to cover the reply, as United States 
stamps are useless. 

An Interchange of References. — It is of great value to obtain an 
interchange of references on merchants located in Latin America, 
as is now the case in the United States. This work is done by the 
National Association of Credit Men, through its branch offices. 

How Foreign Credit Reports Differ from Bomestic. — The credit 
report on the buyer in Latin America differs from that on the do- 
mestic merchant chiefly in that it is lacking in details. This is the 
result of the system that has obtained for many years, and must 
be taken into consideration. A report merely to the effect that 
the firm concerning whom inquiry is made is reliable and wealthy 
is sufficient to justify a reasonable credit. Reports may be ex- 
tremely terse but nevertheless dependable. 

The Necessity of Obtaining Many Reports. — It is equally as 
important, in passing on credits on merchants located in Latin 
America, that all available information should be obtained, and 
particularly where ^ large sum is involved. The various means 



206 EXPOETING TO LATIN AMERICA 

suggested should be utilized^ and the credit reports should be 
renewed from time to time. Conditions in Latin America, par- 
ticularly since the outbreak of the European War, have been more 
unfavorable than in recent years and it is therefore essential that 
records be kept up to date. 

The Advantage of Open Credit Dealing. — Many of the most suc- 
cessful American manufacturers who have established business in 
Latin America have done so by selling on open account. By this 
is meant the custom of granting credit to firms of recognized 
standing on the same conditions on which credit is extended to 
such firms in the United States. 

When and How Open Credit Is Extended. — ^Credit is only 
granted where a thorough investigation has resulted in definite 
knowledge of the unquestionable standing of the concern. It is 
based on absolutely reliable credit information and on the experi- 
ence of other houses. Where open credit is extended to firms of 
recognized standing, the experience of manufacturers is gener- 
ally pleasant, as most responsible Latin American concerns are 
disposed to fulfill to the letter any agreements that they make. 
The basis of settlement of accounts is definitely agreed upon, and 
the invoice must be paid within a fixed term, sixty, ninety, one hun- 
dred and twenty, or one hundred and fifty days as determined. At 
the outset it must be definitely agreed what allowance, if any, is 
to be made for the arrival at the destination of papers and mer- 
chandise, and likewise for the time the remittance is in the mails. 

Instructions to Salesmen Regarding Credits. — American travel- 
ers may profitably follow the custom of European traveling sales- 
men, who invariably make preliminary visits to the merchants 
whom they desire to sell, and then to banks or banking houses in 
order to obtain information relative to the standing of the mer- 
chants. Salesmen who are fortified with the proper letters of 
introduction are enabled to obtain information on which to base 
their efforts, and consequently do not spend their time obtaining 
orders which will be declined later. The methods of European 
commission houses and- importers in the matter of obtaining in- 
formation are practically identical with those followed by Ameri- 
can houses, with the exception that European traveling salesmen 
are a far more important factor in determining credits than 
American salesmen. This is because of the European belief that 



CREDITS IN LATIN AMERICA 20? 

a man on the ground is in a position to investigate the credit 
standing of a dealer much more quickly and thoroughly than can 
be done by mail. The losses of European houses as a result are 
insignificant. 

Time Needed for Gathering Informatian. — The American manu- 
facturer, particularly when not experienced in Latin American 
trade, is likely to expect his travelers to cover the ground too 
quickly. In the long run, a greater volume of business can be ob- 
tained, and far more satisfactorily, if enough time is spent in each 
place. Credit and general information gathered by the salesmen in 
this manner can be used in the future in the development of busi- 
ness. Furthermore, by taking sufficient time to obtain full data 
regarding the best methods of packing, custom house requirements, 
etc., they are enabled far more intelligently to serve their houses 
than otherwise. 

Extending Credit to Small Dealers. — Great care should be exer- 
cised in granting credit to small merchants from whom salesmen 
frequently send orders without proper investigation. Unscrupulous 
dealers seek to take advantage of American exporters, believing 
that because orders are small the credit will not be withheld. When 
shipments from such firms arrive, they are rejected and in many 
instances, when they cannot be successfully placed with other dealers 
but have to be sold at auction, the unscrupulous importers them- 
selves buy the shipments. Because of the difficulties surrounding 
the collection of small amounts, particularly w^hen it is necessary 
to resort to legal means, orders from firms of doubtful standing 
should be refused because, though small, the risk is even greater 
than in the case of large orders from known concerns. 

Unknown Firms Should Be Avoided. — Many salesmen also make 
the mistake of obtaining orders from individuals who have no 
credit standing and about whom it is difficult to obtain informa- 
tion. The American manufacturer should particularly caution 
his representative in this respect, as it is extremely difficult to col- 
lect such accounts in the event that payments are refused. 

Credits Extended to South American Governments. — American 
manufacturers sometimes lose valuable opportunities for the sale 
of their products to the governments of Latin America. In the case 
of most of the republics, when sales are made to the governments, 
settlements are arranged as promptly as in the case of orders 



208 EXPORTING TO LATIN AMERICA 

obtained from the American government. It is unfair to deal in- 
discriminately and to adopt "a strict rule against credit transactions 
with those states. Before cash is exacted every effort should be 
made to ascertain exact conditions that there may be a sound basis 
for refusal of credit, as countries like Argentina, Brazil, etc., have 
the very highest credit standing. 

Methods of Collecting Open Accounts. — It is customary, in ship- 
ping goods anywhere, definitely to fix a date of payment. Re- 
sponsible houses in Latin America, jealous of their credit stand- 
ing, endeavor, to the fullest extent of their ability, to meet these 
conditions. Payments are made in any one of the following ways : 

1. By remitting direct to the manufacturer draft on New York 
or London. If the terms agreed upon are ninety days from in- 
voice it should be definitely stated whether the payment is to be 
made by the merchant at the expiration of that period or whether 
the remittance is to be in the hands of the manufacturer within 
ninety days from the time of shipment. 

2. It may be agreed that the manufacturer shall make a draft 
to be presented to the merchant for acceptance. This draft may 
be either at sight or at a definite number of days sight and must 
be honored at maturity. In that event the draft must be mailed 
to the collecting bank a sufficiently long time in advance to permit 
of its being collected and proceeds remitted. 

3. It may be agreed that the manufacturer shall make draft 
at the time shipment is forwarded, attaching thereto the bill of 
lading, which shall be delivered to the consignee upon acceptance. 
Maturity is thus definitely fixed, and collection is made by the bank 
which retains the draft or to which it is returned for collection at 
the proper time. 

The Collection of Open Accounts. — When shipments are made 
without drafts, and with no definite understanding regarding dates 
of payment or the manner of settlement, the problems of the manu- 
facturer become more complex. While responsible business houses 
in Latin America regard their obligations with great seriousness, 
nevertheless the same difficulties confront the manufacturer in col- 
lecting his bills as are the case in the United States. It is ex- 
tremely important that this question be approached from the 
proper standpoint, as accounts which have cost a great expendi- 
ture of time and money to open may easily be lost. The following 



CREDITS IN LATIN AMERICA 209 

suggestions relative to this phase of the export problem may prove 
helpful : 

1. Maturity Should Be Definitely Fixed. The consignee should 
be tactfully informed at time of shipment how remittance is ex- 
pected and when payment should be in the hands of the manu- 
facturer. If the terms are ninety days, the consignee should know 
whether this means that he is to make remittance ninety days 
from date of invoice, in which event (from the more remote points 
in South America) at least four weeks must be allowed by the 
manufacturer to receive the draft. 

2. The Sending of Statements. When statements are mailed 
they should be accompanied by polite, tactful letters. The average 
Latin American merchant is extremely sensitive and if such let- 
ters are not properly couched they will act as a cause of ex- 
traordinary irritation. If the manufacturer is especially desirous 
of increasing his business, he should invariably make the letter 
serve as an invitation for further orders. If the terms agreed 
upon, for instance ninety days, mean that remittance must be 
made at the end of that time a statement may be mailed sufficiently 
far in advance to reach the customer at maturity. 

3. First Steps in Collections. If an account becomes overdue 
and sufficient time has elapsed for the remittance to have been re- 
ceived, another reminder, also polite, may be sent. The im- 
portance of waiting a sufficient length of time for replies to be 
received to letters of this nature cannot be overestimated. Many 
manufacturers fail to take into consideration the time that is re- 
quired, and by following the routine of American collection methods 
a series of three or four letters, many of them of a very harsh 
nature, are often received by the customers (sometimes on the 
same steamer) before they have time to reply. This is a most 
vicious failing of many manufacturers and a certain means of 
nullifying intelligent work on the part of the sales department. 

Jf.. Attitude in Collections. The business man who is serious in 
his efforts to establish a business in Latin America must exercise 
the utmost patience. In no phase of the business is this more 
essential than in the matter of correspondence. A willingness to 
overlook the delays incident to this feature will be of the greatest 
value in creating trade. If, however, an account has become con- 
siderably overdue and there is no immediate prospect of collec- 



210 EXPOBTI^a TO LATm AMERICA 

tion, a draft may be made. This can be forwarded either througk 
the manufacturer's local bank for collection, or may be sent by 
the manufacturer to a bank in the city where the customer in Latin 
America is established, or to the nearest available institution. 
Private drafts of this nature often serve to expedite collections. 
They must invariably be accompanied by letters of the right sort 
and unless properly written from the standpoint of the Latin 
American they may destroy chances for further business. 

5, Collection of Accounts Long Overdue. As in the case of 
domestic business and despite all precautions, some accounts in 
Latin America become so long overdue that harsh measures must 
be resorted to that collection may be enforced. The taking of legal 
action (except in the most extreme instances) is strongly dis- 
couraged. This is simply because the procedure in Latin American 
courts is both expensive and exceedingly protracted. There are, 
however, means of collecting accounts from concerns without legal 
action. When it is desired to make collections of claims, there are 
several organizations whose experience, developed as a result of 
many years' business dealings in Latin America, is very valuable 
and may be taken advantage of. The Philadelphia Commercial 
Museum, for the benefit of its members, handles such claims. The 
foreign department maintained by the National Association of 
Manufacturers of New York likewise undertakes the collection 
of such accounts. 

Work of Collection Agents. — The American Manufacturers' Ex- 
port Association is still another means. It is not unreasonable to 
expect that as a result of its effective dealing with this problem in 
the United States, the National Association of Credit Men, through 
its bureaus, will extend its valuable work to Latin America and 
serve its members as successfully in that field as it has in the 
United States. The commercial agency of R. G. Dun & Company 
also maintains a collection bureau. In the large Latin American 
cities are organizations similar to the collection agencies in the 
United States, the names of which are easily obtainable. The 
cost of collections through such organizations and of lawyers is 
somewhat high, being usually not less than 15 per cent, and fre- 
quently running even higher. This is due to the fact that the 
correspondents (usually lawyers) in Latin America exact a higher 
fee than here and often insist upon a retainer before undertaking 



CREDITS IN LATIN AMERICA 211 

any collections. It is highly important that the credit man should 
exhaust every possible means of making collection before placing 
his accounts in the hands of a collection agency, and where delay 
is apparently caused by local temporary embarrassment or as the 
result of the fluctuation of the rate of exchange it will prove far 
more advantageous to wait a reasonable length of time than to 
make collection through an agency. 

How Legal Action May Be Taken. — It may be laid down as a 
general principle that the American manufacturer is at a dis- 
advantage in bringing suit in Latin xlmerican courts. The costs 
as a rule are excessive, the time involved is considerable, delays are 
frequent, and altogether it is far more difficult to obtain results 
by legal means than in the United States. If such action is in- 
evitable, only the very best lawyers should be consulted, and claims 
should not be placed with foreign attorneys unless their reputation 
and responsibility has been looked into. To safeguard his interest 
in that direction a manufacturer forwarding a claim requiring legal 
attention should do so through a reliable bank, requesting that 
the matter be handed over to an attorney of recognized standing. 
Where the name of a lawyer is not available for the manufacturer, 
this will quickly result in his claim reaching the hands of a 
reputable attorney. 

The Importance of Adjusting Claims. — In building a business 
with Latin America, it is inevitable that claims of various sorts 
should arise. Notwithstanding all precautions that are taken, mis- 
understandings and claims, both fair and unfair, will be made. It 
frequently happens that the customer files a claim for the purpose 
of obtaining additional time and thus delaying payment, or in 
order to avoid payment indefinitely. 

In handling the adjustment of claims, the American merchants 
should show a spirit of the utmost liberality. Where the exporter is 
himself responsible because of a failure to follow certain directions, 
he should not quibble but allow proper credit. Much can be done 
even with a dissatisfied customer in Latin America by the proper 
sort of correspondence. When the manufacturer proves to his 
customer his willingness to do what is right by being profuse in 
his apologies and showing great fairness, he can ofttimes strengthen 
his claim to a share of the dealer's patronage and be more firmly 
iutrenched in the buyer's favor than if no claim had been made. 



212 EXPORTING TO LATIN AMERICA 

A shortsighted policy in the adjustment of claims with Latin Amer- 
ican merchants is found to result disastrously. In the adjustment 
of claims the American manufacturer may use the good offices 
of correspondents and if his relations with banking institutions have 
become particularly close the aid of such banks may also be in- 
voked. If it is manifest that claims are made for the purpose of 
deceit, fraud, or unfair advantage, the manufacturer has the op- 
portunity of proceeding to collect through any of the means ordi- 
narily open for the adjustment of such accounts. 

Means of Obtaining More Detailed Information. — There are sev- 
eral valuable publications which treat very exhaustively the foreign 
credit problem. These aie listed on page 493 of the Appendix. 



u 



CHAPTER XIII 

BANKING SITUATION. FINANCIAL CONDITIONS IN LATIN 
AMERICA. STERLING AND DOLLAR EXCHANGE 

Introduction. — The topic of financial relations with Latin 
American countries has received much attention from business 
men. The lack of adequate banking facilities between the United 
States and the southern republics has often been urged as a 
drawback to more intimate relations, but so far as the average 
transaction is concerned, this may be said to be without founda- 
tion. The business man whose products are salable in Latin Amer- 
ica has rarely been at a loss to obtain payment therefor because 
of lack of banking facilities. On the other hand, from a broader 
aspect, the extension of the American banking system to the Latin 
American countries was obviously important for greater conven- 
ience in financial transactions. 

Financial Conditions in General. — The financial conditions in 
the twenty Latin American republics differ almost as widely as 
their climates. Some of the republics, as indicated in the first 
chapter, enjoy excellent financial conditions while in some of those 
less developed the situation is unsatisfactory. As a result, it is 
necessary to differentiate and to analyze the conditions peculiar 
to each of the countries. Such an analysis must concern itself 
not only with the currency, but also with the local banks and the 
banking institutions of other nations. 

Character of the Currency. — The student of economic condi- 
tions in Latin America will quickly realize that in many of the 
countries a_dra wback to their development jsJihfi^uiXfincy:, system. i, 
} Some of the republics, like Costa Rica and Uruguay, are on a 
/ sound financial basis, but in others the currency, which is paper, 
I is greatly debased. It is interesting, in this connection, to note 
that in those countries with which our relations are particularly 
close, or where American protectorates, nominal or actual, have 
existed, American money is used and circulates very widely. 

213 



214 



EXPOETING TO LATIN AMERICA 



\ 



\- 



Among such countries are Cuba, Haiti, Nicaragua, Panama, and 
Santo Domingo. 

The Difference of Monetary Systems. — In general there are four 
kinds of currency: viz., "metallic," "representative," "asset" and 
"fiat." These are based* on the four different monetary systems , 
which are in use in various republics. The gold standard has been V!) 
adopted by Bolivia, Cuba, Costa Rica, Ecuador, Haiti, Nicaragua, 
Peru, Santo Domingo, Uruguay and Venezuela ; in these countries 
the sole legal tender is gold. The gold exchange standard is used A) 
by Argentina, Brazil, and Panama; in these republics the legal 
tender is gold as well as other forms of money. The silver standard i ^^x 
is in use by Honduras and Salvador and in these two countries 
silver is legal tender. Inconvertible paper is used by Chile, Colom- ic^ 
bia, Guatemala, and Paraguay and its currency values change 
greatly from day to day. 

The Cause of the Fluctuations. — The monetary values, even in 
those countries with a sound system, have been disturbed by the 
European War. The exact causes need not be discussed here. On 
the other hand, it should be pointed out that in almost all of 
the republics, and especially in the four last mentioned, the fluctua- 
tions are very wide. The principal factors which effect these 
changes are: the J)alanca of trade ; the- demand^ f^ exchange on 

London or other nations; speculation (which is important) ; and 

general business conditions. In consequence of fluctuations, mer- 
"chants sometimes delay remittances while waiting to take advan- 
tage of more favorable rates. 

The Latin American Units of Value. — The following is a list 
of the units of value in Latin America. The face value is subject 
to change for the reason given in the preceding paragraph, but will 
serve to illustrate the point: 

'CoxTNTRT Unit Face Value Country Unit Face Value < 



Argentina 


Peso. 


Brazil 


Milreis 


Chile 


Peso 


Colombia 


Peso 


Costa Rica 

Cuba 


Colon 

Peso 


Ecuador 

Guatemala 

Haiti 


Sucre 

Peso 

Gourde. , . . 



42-44 cents 
39 cents 
33-H cents 
15-35 cents 
01 cent 
46-M cents 
1 Dollar 
487 cents 
02-}4 - 5 cents 
96-1^ cents 



Honduras 

Mexico 

Nicaragua 

Panama 

Paraguay 

Peru 

Salvador 

Santo Domingo. . 

Uruguay 

Venezuela 



Peso 

Peso 

Cordoba . 
Balboa. . . 

Peso 

Sole 

Peso 

Dollar. . . 

Peso 

Bolivar . . 



39 cents 

(Indefinite) 

1 Dollar 

50 cents 

02-1^-5 cents 

48 cents 

44 cents 

$1.00 

1.034 Dollars 

194 cents 



The Domestic or Local Banks. — The banking situation must 
I studied in connection with the currency systems, being inter- 



FINANCIAL CONDITIONS 215 

dependent. In all of the republics are found banks dominated by 
local capitalists, sometimes entirely controlled or owned by the 
governments or closely identified therewith. There are numerous 
private banking institutions and as a general rule they have been 
extremely profitable with comparatively few failures. In Brazili&ne 
of the chief institutions is the Banco do Brazil, which is a semi- 
governmental institution, while in Bolivia the Banco de Bolivia is 
of much the same character. In Cuba, Costa Rica, and other 
republics there are numerous private banking institutions with 
large capital. These institutions are described in detail in reports 
which are listed on page 493. 

Dollar Exchange. — The substitution of "dollar exchange*' for 
the 'Ijill on London" has been suggested as the most important 
step in the plan to secure proper recognition for American com- 
merce in Latin American countries. It is universally conceded 
that the establishment of American banks will be of enormous help 
to American commerce both in their direct and indirect benefit, 
although business of great volume has been already established 
without such help. It is reasonable to assume, therefore, that 
the growth of American exports would be more rapid if there were 
more American banks in the southern republics. The plan of 
establishing branch banks is already being widely attempted. 

Influence of Foreign Banks. — The astonishing development of 
European commerce in the Latin American countries has in a 
large measure been due to the assistance furnished to the business 
men of those nations by their bankers. This aid has not alone 
taken the form of the discounting of drafts covering shipments to 
Latin America but also the financing of projects of almost every 
conceivable nature. Through the branch banks established through- 
out Latin America, capital was supplied to industrial concerns, 
railroads, electric light and power plants, irrigation and water 
power projects, mines, plantations, etc. When the capital for these 
enterprises was furnished by the European banks the purchase 
of materials from their otvn manufacturers was naturally insisted 
upon. 

Foreigpi Banks in Latin America. — As a direct result of this 
policy the most commanding influence in Latin American finances 
is the banks of England, Germany, France, Spain and Italy. Some 
of the other nations, notably Switzerland and Portugal, are also 



216 EXPOETING TO LATIN AMERICA 

represented. In addition to the foreign banks there are very im- 
portant native financial institutions dominated by the capital of 
their nations. Thus the most important bank of South America 
is the Banco de La Nacion Argentina, with a capital of $100,- 
000,000 currency which with a reserve fund amounts to over 
$122,000,000. In Brazil the largest bank has a capital of 
$100,000,000. 

European Domination of Finance. — Students of Latin Amer- 
ican financial conditions will immediately be impressed with the 
preponderating influence of Great Britain in the settlement of 
international debts. By far the greatest number of drafts in set- 
tlement of purchases of American goods are drawn in pounds 
sterling, as are also bills of exchange drawn by American shippers 
on their customers. 

For this reason it has long been realized that if the business 
interests of the United States in Latin America were to have 
adequate recognition, some plan would have to be found of re- 
placing sterling exchange, recognized as the most stable instru- 
ment of international banking. The center of the world's financial 
operations for hundreds of years has been London and commercial 
transactions have invariably been calculated on the basis of the 
pound. Despite the desirability of furthering the use of the dollar 
exchange the fight will be a difficult one for the reason that it 
has always been more profitable for Latin Americans to purchase 
sterling exchange than bills on New York. 

The Bill on London. — That the importance of the bill of ex- 
change on London has not been exaggerated is demonstrated by 
an article which appeared in the London Economist. The follow- 
ing is a quotation therefrom: 

The Bill on London is the currency of the World. It is the only 
currency of the world. It represents gold, but is greater than gold, 
and is preferred to gold because transferrable with greater rapidity, 
less risk and loss. It has therefore become the universal world cur- 
rency which, and which alone, the producer and handler and all 
nations will accept as wholly satisfactory and sufficient. There 
is nothing like it elsewhere. No such function is performed by a bill 
on Paris, or Berlin or on New York. 

The foreign exchange brokers of London have accepted drafts to 



FINANCIAL CONDITIONS 217 

such an extent that these bills were always in demand. For this 
reason even German and French banks have established branches 
in London for the purpose of obtaining a share of the business. 
Within the last ten or fifteen years the Germans in particular have 
been making strenuous efforts to replace the bill on London with 
their own drafts, and the establishment of their branch banks in 
the principal Latin American cities was a part of this plan. 

New York Drafts at Discount. — The sale of London bills of 
exchange has always proved advantageous whereas bills on New 
York usually brought from^l JiQ !>$ per cent. less. The branches 
of the foreign exchange houses in New York City have been in 
a position to discount the drafts of American exporters on South 
America. The export houses of New York which have been forced 
to depend upon European bankers for the financing of their trans- 
actions with Latin American countries have had no difficulty in 
doing so, as drafts drawn against shipments have been readily ac- 
cepted. The houses presenting them are usually perfectly re- 
sponsible and in most instances the same may be said of the 
drawees. 

European and American Banking Methods. — American manu- 
facturers who analyze the financial conditions in Latin American 
countries readily understand why the bill on London has been 
accepted as almost the standard settlement of commercial transac- 
tions not only in Latin America but throughout the world. A 
comparison of the banking methods used in European countries 
with those of the United States makes this easily understood. 
Abroad the bill of exchange has been the usual means of settle- 
ment of business transactions. This bill, because of its general 
character as prime commercial paper, has always been recognized 
by banking institutions as highly desirable, and discounted with- 
out question. In the United States the method of financing a 
business has been by notes. These, it has been customary for the 
bank which made the loans to hold until maturity. Until the enact- 
ment of the Federal Reserve Act, which permits rediscount, they 
have not been made use of as have been the accepted bills of ex- 
change in Europe. 

The Direct Bill of Exchange. — Exchange transactions have been 
so generally misunderstood that the following examples may serve 
to enlighten the reader. 



218 EXPORTING TO LATIN AMEEICA 

An importer in the United States decides to make a purchase 
of hides in Uruguay but is informed that the seller expects pay- 
ment when the hides are shipped. The American importer objects 
to making payment until the hides have arrived or until he has been 
enabled to resell them to his own clients. The importer therefore 
arranges with the bank through its branch or correspondent in 
Uruguay to discount the Uruguayan shipper's bill of exchange at 
say three to four months, providing that the bill is accompanied 
by the bill of lading, consular invoice, insurance policy, and other 
documents in which the ownership of the hides is vested. In 
accordance with this arrangement the Uruguayan dealer makes 
a draft on New York City at four months sight. This draft is de- 
posited with the bank in Montevideo, which, having received ad- 
vice from the New York bank, purchases the bill at the current 
rate of exchange and sends it to the New York bank for acceptance. 
In the meantime the hides are shipped and arrive in New York 
City, whereupon the New York bank allows the importer to obtain 
the hides and deliver them to his clients who pay the importer, 
enabling the latter to repay the bank before the maturity of the 
bill of exchange. Meanwhile, the bill of exchange which still 
has time to run, having been drawn at four months sight, can be 
rediscounted with the Federal Reserve Board, making the money 
immediately available. Such a bill of acceptance can also be sold 
in the open exchange market. 

The Opportunities for Dollar Exchange. — One of the direct re- 
sults of the establishment of branch banks in accordance with the 
provisions of the recently enacted Federal Reserve Act will be 
the creation of a permanent market fo r dollar ex change. As the 
branch banks will be branches of powerful American institutions, 
they will be enabled to sell drafts in dollars on the head institution. 
As a result, at least one of the commissions which merchants have 
heretofore had to pay in the form of a collection charge on a Lon- 
don bank will be wiped out, and the value of the dollar in inter- 
national banking will be definitely estayished. The money speci- 
fied in the drafts is dollars and the exchange is payable only in 
dollars. 

Furthermore, the advantage to the purchasers of such bills is 
a saving of interest for ten or twelve days; the commission is also 
more reasonable than in the past and tliQ risk of fluctuations in 



FINANCIAL CONDITIONS ^1^ 

the exchange is eliminated. The influence of this method of doing 
business will be of phenomenal importance. 

Necessity for Cooperation. — The difl&culty of replacing the bill 
on London with the direct dollar exchange emphasizes the neces- 
sity for the cooperation of business interests generally. No op- 
portunity should be lost to make more common the discounting of 
drafts and accepted bills on Latin American countries, in order 
that the international discount market may grow in importance. 

Provisions of the Federal Reserve Law. — The Federal Eeserve 
Board issued on November 11th, 1914, the rules concerning the 
definition of commercial paper that is eligible for discount. Cer- 
tain of the rules which have an interest for the export and import 
trade are as follows: 

Regulation of Acceptances. — Any Federal Eeserve Bank may dis- 
count acceptances which are based on the importation or exportation 
of goods and which have a maturity at time of discount of not more 
than three months, and indorsed by at least one member bank. The 
amount of acceptances so discounted shall at no time exceed one- 
half the paid-up capital stock and surplus of the bank for which 
the rediscounts are made. 

The aggregate of such notes and bills bearing the signature or 
indorsements of any one person, company, firm, or corporation, re- 
discounted for any one bank, shall at no time exceed ten per centum 
of the unimpaired capital and surplus of said bank, but this restric- 
tion shall not apply to the discount of bills of exchange drawn in 
good faith against actually existing values. 

Any member bank may accept drafts or bills of exchange drawn 
upon it and growing out of transactions involving the importation 
or exportation of goods having not more than six months sight to 
run; but no bank shall accept such bills to an amount equal at any 
time in the aggregate to more than one-half its paid-up capital stock 
and surplus. 

Section 19 of the Federal Eeserve Act, relating to reserves, reads 
in part as follows: 

Any Federal Eeserve Bank may receive from the member banks 
as reserves, not exceeding one-half of each installment, eligible paper 
as described in Section 14 properly indorsed and acceptable to the 
said reserve bank. 



220 EXPORTING TO LATIN AMERICA 

While Section 13 provides that the Federal Reserve Board shall 
have the right to determine or define the character of the paper 
thus eligible for discount within the meaning of the act, the sec- 
tion referred to defines in general terms the elements which such 
paper must possess in order to be eligible. 

Paper Offered for Discount. — All paper offered for discount 
under this section to any Federal Reserve Bank must conform 
to the following requirements : 

\/l. It must be indorsed by a national or state bank or trust 
company which is a member of the Federal Reserve bank to which 
it is offered for rediscount. 

^. Such bank must with its indorsement waive demand notice 
and protest. ^^ 

L^S. Paper so offered shall be in the form of notes, drafts, or bills 
of exchange arising out of commercial transactions; that is, notes, 
drafts, and bills of exchange issued or drawn for agricultural, 
industrial, or- .commercial purposes, of which the proceeds have 
been used or are to be used for such purposes. 
/^ 4. If in the f omrbf acceptances they must be based on transac- 
M;ions involving the importation or exportation of goods and must 
have a maturity at the time of discount of not more than at least 
one member bank and the total amount offered shall in no event 
exceed one-half the paid-up capital stock and surplus of the bank 
offering same. 

5. The aggregate of notes and bills bearing the signatures or 
indorsement of any one person, company, firm, or corporation, re- 
discounted for any one bank, shall at no time exceed 10 per cent, 
of the unimpaired capital and surplus of said bank ; but this restric- 
tion shall not apply to the discount of bills of exchange drawn in 
good faith against actually existing values. 

Subject to these limitations it devolves upon the Federal Reserve 
Board to determine or define for the several Federal Reserve banks, 
(1) notes, drafts and bills of exchange eligible for rediscount; (2) 
bank acceptances eligible for rediscount. 

How the Federal Reserve Act Works. — The working of the Fed- 
eral Reserve Act as applied to transactions with Latin American 
countries may be shown thus: 

A manufacturer in St. Louis receives an order for agricultural 
implements to be shipped to Paraguay. The importer in the Latin 



FINANCIAL CONDITIONS 221 

American country has arranged for credit which is made available 
through his own local bank with some institution, probably a bank 
in New York. The manufacturer of implements in St. Louis 
makes a draft at four or five months sight, which, after having 
run for ninety days, can be rediscounted with the Federal Ee- 
serve bank or sold in the open foreign' exchange market. 

Financing Foreigfn Shipments. — While the Federal Eeserve Act 
makes possible the rediscount of drafts on Latin American coun- 
tries, other means of obtaining cash for shipments have long been 
used by numerous firms who have achieved success in Latin Amer- 
ica. In this they merely followed the customs of European ex- 
port houses or manufacturers and sold their bills of exchange ; that 
is, drafts drawn at a certain number of days sight on dealers in 
Latin America were sold to bankers dealing in foreign exchange. 
In many instances such institutions maintain offices in New York 
and in discounting drafts drawn for a stipulated length of time 
they exact the indorsement of the shipper who is then advanced 
the cash. This is done even in the case of manufacturers who 
do not enjoy the best credit standing but who are able to demon- 
strate that they are doing a legitimate business with responsible 
houses in Latin America who pay the drafts at maturity. 

Discounting of Foreign Drafts by Local Banks. — A matter of 
great practical assistance to manufacturers — which should receive 
the earnest attention of trade bodies — is that of encouraging local 
banks to discount the drafts of their members on foreign coun- 
tries. This should be done without counting such a draft against 
the usual credit of the manufacturer, since the draft, bearing the 
indorsement of the shipper and accompanied by the bill of lading 
and other necessary papers in which the ownership of the shipment 
is vested, should be sufficient security for the bank. Only in rare 
instances are such drafts refused when proper shipping directions 
have been followed. Banks in interior cities should also be en- 
couraged to establish direct relations with banks in foreign coun- 
tries in order that drafts may be sent direct, minimizing the cost 
of collection. If this is not done, the local bank may be com- 
pelled to send the draft through a New York institution which 
may or may not have a foreign exchange department. If it has not, 
it is compelled to pass on the draft to an institution having such 
a department, thereby incurring extra commissions. 



\i 



S22 EXPORTING TO LATIN AMERICA 

Effect of the Federal Reserve Act. — ^A direct benefit of the Fed- 
eral Reserve Act will be the opening of a vast well of credit to 
American manufacturers, who will no longer be compelled to 
depend upon the London or other European exchange firms. The 
law directly authorizes banks to accept bills on shipments of 
merchandise drawn at six months' time, and when such bills are 
within ninety days of maturity they may be rediscounted by the 
Federal Reserve banks. As the capital of the National banks is 
almost $1,800,000,000 and as the total amount of such bills which 
are subject to discount may reach this amount, the importance to 
the American export interests, of the new law, may be readily ap- 
preciated. Another feature of the Reserve Act is the permission to 
establish branches of large American banks in Latin American 
cities, already taken advantage of by several institutions. 

Why European Banks Succeed. — As almost every European bank 
that has been established in Latin America has achieved success, 
analysis of the reasons therefor is interesting. Their prosperity 
may be attributed in large measure to the following: 

1. Absence of detrimental competition of native banks. 

2. Advantages of a system of branch banks widely scattered, 
each of which does business on a comparatively small capital. The 
main banking house is usually located in the capital of the re- 
public with small branches throughout the country. 

3. Profits on commissions, exchange, etc., resulting from ne- 
gotiating the business of steamship lines, railroads, and financial 
interests of all sorts established by capitalists of various na- 
tionalities. 

4. Intimate cooperation with banking houses of the country from 
which the capital of the bank is derived. 

5. Profits of handling through London, Paris, and Berlin in 
preference to New York, drafts, bills of exchange, and letters of 
credit, etc. 

6. Competent management by men thoroughly acquainted with 
the language, customs, and laws of the people or sections in which 
they are located, as a result of their long residence. 

7. The high interest rates because of limited capital in the 
country. 

8. Profits from the sale of the local, state, and national securities, 
which were underwritten by them. 



FINANCIAL CONDITIONS 223 

9. No opportunity for profit was lost. Almost every legiti- 
mate commercial transaction was underwritten. 

Banking Practices in Latin America. — Banking in the Latin 
American countries has been one of the most lucrative businesses 
that has engaged capital. Generally speaking, thp banks have 
been well managed, and while often very liberal in their accom- 
modations they have been exceedingly successful. The character 
of the loans has been such, however, that in some countries there 
is an insistent demand for greater supervision. Banking failures, 
notwithstanding, have been very infrequent and the great demand 
for capital has made for the highest interest rates. 

Commercial Banking in General. — In the Latin American re- 
publics, banking practice differs somewhat from banking as car- 
ried on in the United States. One of the chief sources of difference 
is in the_^ianner^jif_excha£gg_^erations^d to the fact that in 
some of the republics the variations _are_so^ra^d that extreme 
care must be taken to avoid losses. The foreign banks, whose home 
offices are in Europe, work very closely with those offices, espe- 
cially in the matter of exchange. They also make it possible for 
the main institution intelligently to conduct operations in the pur- 
chase of drafts on merchants located in the various Latin Amer- 
ican countries. This is accomplished by supplying to the home 
office credit information, etc. The financing, in jiannectioa_^th 
drafts is an important function; the making of loans to jnexcjiants 
and importers in general is the-^most profitableL.branck As a 
bank increases in importance and capital, the sale of securities, 
not only of private enterprises but of governmental issues, is looked 
after. Other features of American and foreign banking, such as 
the savings departments, the placing of mortgages, and under- 
writing operations in general, are undertaken. 

Loans and Discounts. — The custom of giving credit freely pre- 
vails generally throughout Latin America and has unquestionably 
contributed in part to the financial depression which became so 
marked during the latter part of 1912-1913. The rates of interest 
vary, but are often from 8 per cent, to 12 per cent. The time 
also varies but loans are frequently for longer periods than are 
granted in the United States (six and twelve months). 

Other Practices. — The banks of Latin America are accustom/^ 
to permit overdrafts, charging for this privilege 8 per cent, to I'v; 



224 EXPORTING TO LATIN AMERICA 

per cent. The usual method in overdrafts is as follows: Business 
men who are possessed of a good standing are accustomed to open 
accounts in a number of banks, this varying in proportion to the 
volume of business, being often with as many as ten or twelve 
banks. A credit is accorded by each bank, the customer being 
permitted to overdraw from $5,000 to $20,000. By this means it 
is possible for a merchant with a much smaller capital than in the 
United States (provided he has a good reputation) to obtain a 
larger accommodation. Efforts are now being made to change 
this practice and to provide for more careful methods, although 
this business has proven very successful and excellent dividends 
have been declared on most bank stocks. 

Government Supervision. — In almost all of the countries there is 
certain governmental supervision but only in some of them are the 
provisions for examination exacting. The result is that the paper 
that protects loans is often of a very questionable character. 

Collection Charges,. — One of the chief sources of profit of Latin- 
American banks has been the collection of commercial documents. 
The charges range from % of one per cent, to 1 per cent., the 
former usually applying to the large cities and the latter to places 
that are more remote. As branches of native or European banks 
are found in practically every commercial community where there 
exist opportunities for business, this is of enormous advantage to 
American exporters. 

Why European Influence Has Waned. — The European War thor- 
oughly demoralized financial conditions in Latin America and 
completed the depression which had adversely affected business 
generally in the Latin American countries during 1913-1914. 
This climax was due to the fact that the finances of these coun- 
tries has been dominated by European bankers, and the extraor- 
dinary extent to which Germany alone was interested, through 
its great banking houses and banks, caused little less than a ca- 
tastrophe. Not only were the markets of the southern coun- 
tries temporarily closed and the capital investments shut off, but 
the exchange dropped so sharply that in many quarters the severest 
crises were felt. 

The seriousness of the situation crystallized the sentiment which 
had been developing in the United States for more intimate finan- 
cial relations with the southern countries. It was realized in 



FINANCIAL CONDITIONS 225 

all quarters that if advantage was taken of the opportunity the 
United States might obtain rightful representation in the finan- 
cial interests of the Latin American countries. 

The enactment of the Federal Eeserve Law provided the neces- 
sary machinery for strong financial institutions to enter that 
field. 

The Opportunities for American Banks. — The opportunities for 
American banks in Latin America are based on the following 
reasons. 

1. The need for capital to finance projects of all sorts, including 
industrial, agricultural, and other loans. 

2. To enter the exchange market and encourage the purchase 
of dollar exchange. 

3. To supply information regarding trade opportunities, credit 
reports, and information of general use in the development of 
business. 

Particularly in the financing of large projects are the oppor- 
tunities desirable, inasmuch as the domination of American in- 
terests in such financing would insure the purchase of American 
supplies. This policy is typical of that which has made the Euro- 
pean nations so powerful in the business of the Latin American 
countries. 

American Branch Banks in Latin America. — The Federal Ee- 
serve Act authorized the establishment of branch banks by Na- 
tional banking institutions with a capital of $1,000,000 or more. As 
a result branch banks are now being established by the powerful 
financial interests of this country, notably the National City Bank 
of New York, which has opened branches in Buenos Aires, Rio 
de Janeiro, Santos, and Montevideo. These banks will not only 
enter actively into the banking business but will render much as- 
sistance which is usually only extended by commercial organi- 
zations. A commercial bureau will be maintained in connection 
with each branch, to investigate and study thoroughly trade oppor- 
tunities in the districts of the, various branches. Manufacturers 
desiring to do business in these countries will be advised of 
the possibilities for the sale of their goods and efforts will be 
made to provide specific aid in obtaining local or general agents. 
Information will also be given regarding the necessities for pack- 
ing and shipping articles, after they have been properly prepared, 



^26 iEXPORTING TO LATIN AMERICA 

to meet the requirements. Other advantages will naturally fol- 
low the establishment of such branches and will aid in the scien- 
tific development of American export business. 

Supplying Credit Information to American Manufacturers. — 
While the American banks which are established in Latin America 
would naturally be more disposed to supply the information re- 
quired by American manufacturers than would the banking insti- 
tutions of competitive nations, nevertheless there is but very little 
difficulty in that respect today. Almost every bank in Latin 
America, no matter of what nationalit}'^, will courteously answer 
inquiries of American business men regarding the financial stand- 
ing of merchants of their district, provided an international post- 
office coupon is inclosed. Furthermore, American traveling men 
properly provided with letters of introduction, when presenting 
them to the managers of such banks, will almost invariably be 
given frank and fair estimates of the worth of the dealers con- 
cerning whom they may make inquiry. It is, nevertheless, to 
the advantage of American exporters to send their documents 
and invoices to an American institution friendly to their inter- 
ests. It is not unreasonable to expect that they will be more 
closely guarded than in the case of a competitive nation. 

Other North American Banks in Latin America. — In addition 
to the branches of the National City Bank, other banks of the 
United States are extending their activities to Latin America. 
Among these are the following: ' 

The Mercantile Bank of the American of New York; authorized 
capital, $5,000,000; paid-in capital of $400,000 cash and surplus 
$100,000. Its field includes Central America, and Northern South 
America, including Venezuela, Colombia, Ecuador, and Peru. Its 
service, in general, is similar to that of the National City Bank. 

The Continental Banking and Trust Company of Panama. This 
organization, representing West Virginia capitalists, has estab- 
lished branches in David, Bocas del Toro, and Chorillo, Panama, 
also in Santa Marta, Colombia. 

The Commercial National Bank of Washington, D. C, has es- 
tablished a branch in Panama. 

W. R. Grace and Company of New York have branches in many 
cities of South America, and in connection with their other affairs 
conduct a general banking business. 



FINANCIAL CONDITIOlSrS 227 

Future Opportunities. — It is not alone in the conduct of gen- 
eral mercantile banks that opportunities for North American 
bankers exist in Latin America. Especially promising are the 
possibilities of financing the numerous enterprises in the rapidly 
developing countries. Very profitable will undoubtedly be the 
sale of the bonds and stocks of Latin American enterprises in the 
United States. This work is logically that of American banking 
institutions. The greater returns from investments in the Latin 
American republics, when properly administered, will make it 
possible to obtain much capital from the United States, and to 
direct such investments will be the work of financiers from the 
United States who are trained to this end. 

The American International Corporation. — As a significant 
feature in the extension of American financial influence to Latin 
America may be cited the organization of the American Interna- 
tional Corporation. This institution was founded in the fall of 
1915 with a capital of $50,000,000. Its purpose is not alone to 
develop trade with the Latin American republics but to transact 
business of many kinds and of vast importance. This includes the 
construction of public w^orks, the development of enterprises of 
all sorts, the acquisition and operation of railroads, steamship lines, 
etc. This company was organized by interests closely associated 
with the National City Bank and the International Banking Cor- 
poration, both of New York. 

Useful Publications Concerning Banking. — A number of publi- 
cations of value to the student of Latin American banking and 
finances will be found listed on page 465 of the Appendix. 



CHAPTER XIV 

TARIFFS, CUSTOM HOUSE REGULATIONS, AND TAXES IN 
LATIN AMERICA 

Introduction. — In considering the development of business in 
Latin America, one of the first essentials is an investigation of the 
tariff laws of the different countries in which it is sought to market 
a particular product. Such an investigation need only be con- 
fined to determining whether the ultimate consumer will still buy 
the article after it has been imported and the duty has been paid; 
the importer, of course, will in the meantime have paid, in addi- 
tion to the duty, the freight and other charges. 

Tariff Systems in Latin America. — In order to understand thor- 
oughly the tariff systems of Latin America as they exist today, it 
is important to remember that they were not definitely created but 
have had a gradual development and growth. The duties vary, 
being either ad valorem or specific ; in certain of the republics both 
are charged. In some of the countries the duty is calculated in 
silver; in others in gold. In the latter case, while the calculation 
is made in gold, paper money is accepted at a fixed rate. In three 
countries a mixed gold and paper method of payment is allowed. 
In most of the Latin American states the duty is required to be 
paid in gold or in National currency equivalent thereto. 

How to Study Tariff Systems. — The importance of studying the 
tariff affecting a product which it is desired to export is obvious. 
The possibility for its sale may be absolutely nullified by the tariff 
as applied by one of the republics, and yet in other Latin American 
countries more favorable tariff legislation may make possible a 
large business. It is only by a very careful analysis that the manu- 
facturer can decide whether it is possible for him to export to one 
or more of the republics. The analysis of the tariff situation should 
have as its basis the following: 

1. The exact tariff charged. 

2, Whether, in spite of the tariff, a sale would be possible. 

22S 



TARIFFS AND TAXES ^2d 

3. The relation of the tariff, if specific, to packing the product, 
its safe arrival, handling and sale. 

4. How European or other competitors overcome tariff handi- 
caps on particular articles by packing, sales methods, advertis- 
ing, etc. 

The Relation of Weight to Tariff.— When a tariff schedule is 
based on weight and a specific weight is assessed, the question of 
packing becomes instantly important. In this connection the ex- 
porter must remember that the metric system is used exclusively 
in Latin America and the unit is the kilogram (2.2 pounds), not 
the hundredweight or the ton. The schedules by which the tariff 
is assessed are very numerous and only a thorough examination 
will determine the class to which goods are to be assigned. For 
the purpose of supplying the proper invoices and to enable the 
exporter to obtain the very lowest tariff rate, it is desirable that 
the exporter request the buyer in Latin America to supply with 
the order an exact memorandum of the declaration he desires. 
This declaration should be furnished by the importer in Spanish 
or Portuguese, and should be copied to the letter. This will save 
a great deal of trouble besides simplifying the question for the 
importer. In every order sheet should be left a column under 
which the customs description of the article imported is to be 
specified. 

The Basis of Latin American Tariffs. — The tariffs of Latin 
America are not calculated exclusively from the commercial stand- 
point. They are generally governmental measures, to produce 
revenue or to afford protection. In the more rapidly developing 
countries, many of the important political struggles of the fu- 
ture will have as a basis the principle of protection, inasmuch 
as certain classes are benefited by this policy while other classes 
will oppose such laws because of their disadvantages to them. In 
any event, the rate of duty, even on the same article, may be differ- 
ent in each of the twenty republics. This applies not only to 
the specific rates charged but. also to the classification and, par- 
ticularly, to the principle of a specific or ad valorem tariff. 

The Theory of Latin American Tariffs. — ^With the exception of a 
very insignificant number of articles (not to exceed five per cent, 
of those imported), the importations into Latin America repre- 
sent goods which cannot be manufactured or are not produced 



^36 EXPORTING TO LATIN AMEEICA 

by the country into which they are imported. Even when there 
is a native production, the importations are usually of an en- 
tirely different grade or quality from those produced in the repub- 
lic. The tariffs which are charged are almost invariably for 
the production of revenue and are but rarely designed to act (as 
in the case of the American tariff) for the protection of a home 
industry. 

How the Tariff Laws Work. — The application of a specific tariff 
in Latin America results in the payment of identical duties on 
the same articles, even though of a wide range of quality. As 
a concrete instance may be cited the following: 

Suppose two different articles, one worth $200, the other $700, 
were imported into the United States. The duty, if calculated 
on an ad valorem basis of 40 per cent, would be respectively $80 
for the first and $280 for the second. If these should be imported 
into a South American republic, Chile for example, the duty 
would be assessed regardless of the difference in quality. The" 
definite effect is to encourage the importation of high-priced 
articles, and to discourage the importation of those not so ex- 
pensive. 

Because of these conditions, the European manufacturer fre- 
quently is enabled to outsell his American competitor. It is not 
that he has an advantage in a lower tariff rate but simply that 
by reason of his close study of the tariff laws he makes such 
changes in his product that he is enabled, without altering its 
appearance or durability, to place it in a lower category and ob- 
tain the benefits of the new schedule into which it then naturally 
falls. The use of ornamentation upon an article, a special trim- 
ming, or an erroneous description frequently compels the customs 
house authorities to apply a schedule calling for a higher rate. 

Proper Classification Indispensable. — It is not alone important 
that the manufacturer study the intricacies of the proper declara- 
tion of materials, but he must also realize the necessity for accu- 
racy in description. He should make every effort to ascertain by 
what name an article should be termed in order to place it in 
the most favorable classification that it may obtain the lowest 
possible rate of duty. This can be done in two ways : 

1. By insisting that traveling or local representatives obtain defi- 
nite instructions from the client. 



TARIFFS AND TAXES 231 

2. When business is done, direct that the merchant indicate 
exactly how a particular article is to be described on the invoice. 

When an article, if trimmed, pays a higher rate of duty than 
if untrimmed or when adorned with certain decorative materials, 
the manufacturer should ascertain whether he may not ship the 
articles separately; that is, whether he may pack them in dif- 
ferent packages and so describe them on his invoice. In the mat- 
ter of declarations for tariff purposes, the necessity for painstak- 
ing care and attention to detail are of transcendent importance. 

The Interpretation of Descriptions. — Upon the proper descrip- 
tion and designation of goods depends the duty assessed, and the 
use for which certain merchandise is intended should therefore 
be specified. As a definite example may be cited the case of ma- 
chinery. In some countries, where this is for use in mining it is 
entirely free of duty, but if defined as ordinary machinery would 
be subject to duty. 

The Meaning of Surtaxes and Exemptions. — In addition to the 
tariffs which affect specific rates according to weight or value 
in customs duties, a number of the republics exact a surtax, vary- 
ing in percentage, the proceeds of which are used for definite 
purposes. An example is a tax to overcome loss in revenue, another 
is a fund to assist the development of the country. Certain 
articles are exempted both from the tariffs and surtaxes, or, in 
other instances, from the latter only. While the subject at first 
may seem complex, the application of simple principles will save 
the manufacturer much trouble, particularly if a definite declara- 
tion is asked of the customer. 

The Value of a Preferential Tariff. — In some countries, notably 
in the Republic of Brazil, there exists a preferential tariff on 
American products which enables the American manufacturer to 
enjoy advantages over European competitors. In Brazil the list 
of articles on which there is a preferential tariff of 20 per cent, 
includes the following items : 

Paints and inks, except writing fluid, and varnishes; wheat, 
flour, pianos, condensed milk, scales, windmills, refrigerators, 
watches, clocks, manufactures of rubber, and typewriters. Manu- 
facturers of these articles will be enabled, because of the rebate, 
to obtain a considerable volume of business if proper efforts are 
made. 



23^ EXPORTING TO LATIN AMERICA 

Certain Articles Exempt from Duties. — Many Americans are 
unaware of the fact that in certain of the Latin American coun- 
tries there is no duty upon many manufactures. This is par- 
ticularly the case in Chile, where important elements which make 
for industrial development, such as tools, machinery, fuel and 
other materials, are allowed to enter without payment of any duty. 
In other countries the same policy prevails. By ascertaining in 
which of the countries such benefits may be derived the alert manu- 
facturer will greatly profit. 

The Equality of the Tariff as Affecting Imports. — ^Another fac- 
tor which is often overlooked and which is a basic principle is 
that the American manufacturer is on an equality with the manu- 
facturers of the entire world. Therefore, even though a tariff is 
changed or extremely high, he is at no disadvantage as compared 
with the manufacturers of other countries. As the tariff laws are 
interpreted differently in the case of each country, manufacturers 
should consider this fact before having goods packed. 

Principles of Tariff Regulations in Latin America. — The basis 
on which the duties are assessed in the various Latin American 
countries is outlined in the following paragraphs, and naturally 
only the general laws can be stated and each shipment must be 
considered individually : 

Argentina. — Most articles mentioned in the tariff are dutiable 
on legal weight; that is, on gross weight with a reduction for tare, 
fixed in accordance with the nature of the packing. The shipment 
of merchandise of different classes in one case or package is to 
be avoided, as the customs authorities may apply to the entire 
shipment the duty of the highest taxed article included in the 
shipment. 

Bolivia. — There is no general rule for the application of the 
tariff to articles dutiable by weight, some of them being dutiable 
on net weight, some on gross weight, and some on the weight 
of the merchandise together with that of the immediate packing, 
such as a cardboard box or paper, but exclusive of barrels, wooden 
or tin boxes, or any material serving as a covering for the outside 
containers. There is no penalty for mixed packing, provided such 
packing is not intended as a means to defraud the customs. 

Brazil. — Of the articles dutiable by weight in Brazil, some pay 
duty on gross weight, some on legal net weight, and some on 



TARIFFS AND TAXES 233 

actual net weight. By gross weight is meant the weight of the 
goods together with that of the packing, except rough wooden 
containers. By legal net weight is meant the gross weight less 
the tare allowances indicated in the tariff for different merchandise 
and containers. By actual net weight is meant the weight of 
the merchandise without any packing. When goods dutiable on 
legal net weight and actual net weight are imported in the same 
package, both pay duty on actual net weight. The same rule ap- 
plies when the package contains only merchandise dutiable on net 
weight, but with different tare allowances. When goods subject 
to different duties, but all dutiable on gross weight, are im- 
ported in the same package, the weight of the packing is dis- 
tributed proportionally among the different kinds of merchan- 
dise. 

Chile. — Merchandise subject to duty by weight may be dutiable 
on net weight, gross weight, weight including packing, or weight 
including containers. There are so many definitions and rules 
imposed for the application of the customs tariff that a study 
of each is required. 

Colombia. — Duty is levied on gross weight. Merchandise sub- 
ject to different rates of duty may be packed in the same con- 
tainer, provided the gross and net weight of each kind of mer- 
chandise is indicated. If the weight is not indicated separately, 
the rate of the highest taxed article is applied to the entire 
shipment. 

Costa Rica. — Duty is levied on gross weight. In the case of 
goods subject to different rates of duty, packed in the same con- 
tainer, the net weight of each kind of merchandise must be indi- 
cated, so that the weight of the packing may be distributed pro- 
portionally among the different classes of merchandise. In the 
absence of such information the duty on the highest taxed article 
in the shipment is applied to the entire contents. 

Cuba. — Articles are dutiable on gross weight, actual net weight, 
or legal weight, as indicated in the tariff for each item. The legal 
net weight is calculated in accordance with a schedule of tare 
allowances annexed to the tariff. 

Dominican Eepublic. — Under the Dominican customs rules mer- 
chandise is dutiable either on gross or net weight. No duty is 
collected on the tare except in the case of certain specific packings 



234 EXPORTING TO LATIN AMERICA 

which are subject to tariff. There are numerous rules which should 
be consulted by the exporter. 

Ecuador. — Merchandise imported into Ecuador is dutiable either 
on gross or net weight. No penalty is imposed for packing in 
the same container merchandise subject to different rates of duty. 
In such cases it is required that the shipper state in the consular 
invoice the net weight of each kind of merchandise, as well as 
the gross weight of the entire package. 

Guatemala. — The duty on merchandise may be levied on net 
weight, on weight including packing, except outer containers, or 
on gross weight, according to the provisions of the customs tariff. 
In the case of merchandise dutiable on weight including pack- 
ing, imported loose in an outer container, the weight of the latter 
is not included in the dutiable weight. When merchandise duti- 
able on weight including packing is imported in the same re- 
ceptacle with merchandise dutiable on gross weight, the duty on 
the latter merchandise' is levied on the weight including packing, 
with the addition of one-fourth thereof, to compensate for the 
outer container which is not included in weighing the merchan- 
dise. Cloth used for wrapping merchandise must be declared for 
duty, only oilcloth and tarpaulin being considered as part of the 
packing. A fine is imposed by the customs authorities for packing 
in the same receptacle merchandise subject to different rates of 
duty. , 

Haiti. — Goods subject to duty by weight are dutiable on the 
net weight. No fine is imposed for packing in one receptacle 
articles subject to different rates of duty, provided that the mer- 
chandise is properly declared. 

Honduras. — All merchandise subject to duty is dutiable on gross 
weight. No fine is imposed for packing in one receptacle mer- 
chandise subject to different duties. 

Mexico. — The duty on merchandise dutiable by weight is levied 
on net, legal, or gross weight, according to the provisions of the 
tariff. No penalty is imposed for mixed packing, if the merchan- 
dise is declared properly. Mexico has its own interpretation of 
legal and gross weights " which should be studied by the shipper. 
It is important to declare the weights of different items packed 
in the same case. 

Nicaragua. — All duties are levied on gross weight. It is not 



TARIFFS AND TAXES 235 

permitted to pack more than ten kinds of merchandise in one re- 
ceptacle. When different kinds of merchandise are packed in one 
container the weight thereof should be carefully specified. 

Panama. — Practically all imports into Panama are dutiable ad 
valorem, and the question of packing is therefore of little im- 
portance. 

Paraguay. — The rules given for Argentina apply also to 
Paraguay. 

Peru. — ^In the case of articles dutiable by weight, the basis for 
levying duty may be net weight, gross weight, or legal weight. 
The net weight is obtained by deducting from the gross weight 
the tare allowance indicated in the table of tares. Legal weight 
includes the weight of the merchandise with that of its packing, 
but not including the outer container. When merchandise dutiable 
on gross weight is imported in the same container with merchan- 
dise dutiable on a different basis or subject to different rates of 
duty, or with samples without value, 25 per cent, is to be added 
to the weight of such merchandise weighed with its immediate 
packing and its share of the straw, shavings, or similar packing 
material. In the case of pianos and beds 60 per cent, is to be 
added. Receptacles dutiable at a higher rate than the contents, as 
well as those containing free goods, are dutiable separately. 

Salvador. — The duty on imports into Salvador is levied on gross 
weight, and there is apparently no objection to mixed packing, 
provided that the merchandise is properly declared. 

Uruguay. — The basis for levying duty on goods dutiable by 
weight varies, some articles being dutiable on gross weight, some on 
legal net weight, while in some cases the weight of the inner re- 
ceptacle is included in the dutiable weight. There is no provi- 
sion in the tariff regarding a penalty for mixed packing. 

Venezuela. — The duty on imports into Venezuela is levied on 
gross weight. When articles subject to different rates of duty are 
imported in the same packing, the rate of the highest taxed article 
is applied to the entire shipment. 

How Tariff Information Is Obtained. — Many manufacturers who 
are sincerely desirous of aiding their customers and wish to obtain 
information relative to tariff laws in the Latin American republics 
are unaware of the means of getting the required information. 

Membership in certain commercial and exporting organizations 



236 EXPOETING TO LATIN AMERICA 

entitles the member to tariff information. Letters are often ad- 
dressed to the consular officers of the United States, but this method 
is the cause of much delay and should be avoided. Export journals 
are also accustomed to furnish information when it is asked. 

The Work of the Bureau of Forei^ and Domestic Comnierce. — 
One of the features of the Bureau of Foreign and Domestic Com- 
merce has- been the work of the Division of Foreign Tariffs, from 
which information may be obtained very quickly regarding the 
following subjects: foreign customs duties, customs regulations; 
internal revenue laws in foreign countries; regulations for com- 
mercial travelers; requirements of foreign countries for consular 
invoices, law relating to trade-marks, laws relative to standards 
of purity (pure food laws), etc. 

When information concerning these subjects is desired, the Bu- 
reau will be found valuable. Application should be made through 
the local offices, which are listed on page 547 of the Appendix. 

How to Insure Promptness. — Manufacturers within the districts 
of the branch office of the Bureau of Foreign and Domestic Com- 
merce should address their inquiries regarding tariff information 
to such offices. If the information is not on hand it will be ob- 
tained more quickly than the manufacturer can get it, by addressing 
American Consuls who may already have supplied the information 
that is solicited. 

Other Sources of Information. — Much information relative to 
the tariffs of Latin America is contained in the publication Pack- 
ing for Export, Miscellaneous Series, Government Printing Office. 
The data contained in that publication have particular reference 
to tariffs as affecting packing. Another useful volume is Kelly's 
"Customs Tariffs of the World.'' These will be found listed on 
page 464. 

How Requests for Information Should Be Made. — The customs 
and tariffs laws, in addition to the rules and regulations applying 
thereto, are subject to so many changes that where dependable 
information is desired, frequent inquiries are essential. In order 
to serve his own best interests the manufacturer should be ex- 
tremely careful to give the fullest possible details relating to the 
inquiry he makes. These should be as follows : the particular coun- 
try involved; the nature of the article, that is, its component ma- 
terials, its trimmings or adornments, if any; the nature and use 



TARIFFS AND TAXES 232' 

of the product ; the character of the packing employed, etc. The 
more detailed the description, the more complete and reliable the 
information to be gotten. 

The Publications of the Bureau of Foreign and Domestic Com- 
merce. — In the course of the work of the Bureau of Foreign and 
Domestic Commerce, many valuable publications have been issued 
and are available. Tariffs for the more important commercial 
countries have been published and duties for a particular class 
of articles, either in a selected list of foreign countries or for 
all foreign countries, are also to be had. The Bureau has con- 
stantly in course of preparation publications showing the rates and 
duties on products of many different characters and descriptions. 
In the "Daily Commerce Eeports," under the heading of "Foreign 
Tariffs,^' there are reported proposed changes in the tariff laws, 
and other legislations of foreign countries. 

Information Obtainable from Foreign Consuls. — ^As the prepara- 
tion of papers covering shipments for export is highly technical, 
and may involve serious consequences in the payment of duties, 
etc., American manufacturers, when in doubt, should obtain fullest 
information from the local Consul of the country to which the 
shipment is to be made or from the Consulate General in Xew 
York City. The list of foreign consulates will be found on page 5221 
of the Appendix. 

Other Means of Obtaining Information. — The underlying prin- 
ciples of foreign tariffs are also found in the publication "Export- 
ers' Encyclopedia.'' This information is printed at the beginning 
of each chapter relating to the individual countries. 

Custom House Eegulations. — The custom house regulations in 
Latin American republics have been the subject of much criticism 
on the part of American exporters who have taken exception to 
the strictness wdth which they are enforced. To many shippers 
they seem far too exacting, but those who have had business with 
the American custom houses realize that the conditions imposed 
by customs officials in Latin. America are often far less difficult 
to comply with than those which obtain in the custom houses of 
the United States. Those American houses who transact both 
an import and export business rarely complain in this particular. 

Need for Compliance with Regulations. — One of the factors 
which contribute to the rapid development of a business with Latin 



238 EXPORTING TO LATIN AMERICA 

America is the observance of custom house regulations in the dif- 
ferent countries, not alone in regard to the packing of the goods 
and their declaration but especially in the matter of documents 
which are exacted. These are different in each of the republics, 
but there are certain general principles which govern their mak- 
ing. These include : absolute accuracy in declarations ; promptness 
in supplying the necessary papers; a willingness to give all the 
information required; absolute cooperation with customs officials. 
If a proper spirit is manifested in this regard, there is very 
little likelihood of difficulty. The preparation of documents cov- 
ering export shipments can be greatly facilitated by consulting 
technical works devoted to this subject issued annually. Among 
these may be mentioned the "Exporters' Encyclopedia.'' 

The Working of the Drawback Laww — Many manufacturers who 
export to Latin America do not know that they may find a source 
of considerable profit in the drawback law. "Drawback" simply 
means the obtaining of the rebate of the tariff duties paid on all 
imported material used in the manufacture of goods which are 
exported. The law provides that upon the exportation of articles 
manufactured or produced in the United States by the use of 
imported merchandise or materials on which customs duties have 
been paid, the amount of such duties less one per cent, shall be 
refunded as drawback. There are certain qualifying clauses but 
the principle of the law is embodied in the preceding sentence. 

How to Obtain the Drawback. — All that is necessary in order to 
obtain the drawback is for the manufacturer definitely to trace 
the origin of the various raw materials used in the manufacture 
of his product, and to prove that they have been imported. There 
are a number of firms who make a specialty of collecting draw- 
backs and to these should be referred the question of details. The 
names of those best qualified to investigate drawbacks and to look 
after the collection may be obtained from business organizations 
or from the New York City directory. 



CHAPTER Xy 

CATALOGS, PRICE LISTS, QUOTATIONS, DISCOUNTS. STANDARDS 
OF MEASURE AND VALUE 

Introduction. — So much has been written on the subject of the 
right and wrong sort of catalogs suitable to Latin America that 
further discussion seems useless, yet the catalog will in the 
future have such an important bearing on the business with Latin 
America that this work would be incomplete without some obser- 
vations regarding its essentials. 

The Use of Catalogs. — Despite the fact that the use of the cat- 
alog as applied to Latin American business is often discouraged, 
it occupies a very important place in trade development. It 
may be used in any of the following ways: 

1. To create prospects in a virgin territory either for direct 
relations or for the purpose of supplying leads to local or general 
agents. 

2. To precede the visit of the traveling salesman whose work 
is made easier by the advance distribution of a good catalog among 
the proper merchants. 

3. To serve as a means of direct trade relations between the 
manufacturer and the Latin American buyer in those places where 
business by means of salesmen or agents is not practicable. 

4. To be used as a medium to obtain business through export 
houses and for the development of a market not previously en- 
tered before salesmen are sent. 

5. To aid dealers in placing 'duplicate orders after initial pur- 
chases have been made. 

This is the most effective use, especially if catalogs are properly 
compiled. 

Some Latin Americans Are Disinclined to TTse Catalog. — Many 
American houses are responsible for the disinclination of Latin 
American dealers {o use catalogs more freely. In innumerable 
instances their experiences in ordering from catalogs have been 

239 



240 EXPORTING TO LATIN AMERICA 

very unsatisfactory. Because of erroneous or misleading descrip- 
tions, as well as outright substitutions, merchandise has often 
proved undesirable, and despite the fact that heavy outlays had 
been made for duty and freight, the American shipper has failed 
to make reparation when called to account. 

A House Judged by Its Catalog. — When a catalog is decided 
upon, the importance of adequate publication cannot be too 
strongly emphasized. The Latin American, with his keen apprecia- 
tion of business methods, bases his opinion of a manufacturer upon 
the appearance of his printed matter and particularly of his cata- 
log. If the latter is compiled with great care, he will be much 
more easily influenced to place an order. It is for this reason that 
the appearance of the book should be attractive and substantial 
enough to win the confidence of the Latin American merchant. 

The Use of Spanish, Portuguese, or French. — Obviously a catalog 
for circulation in Latin America should be in the language of the 
country to which it is sent. With the exception of Haiti where 
French is spoken, and Brazil where Portuguese is the language of 
the people, Spanish should be used in the preparation of catalogs 
mailed to the Latin American republics. The average American 
manufacturer would not be inclined to buy of a French or German 
manufacturer from whom he received a catalog in French or 
German, containing not only technical terms with which he was 
absolutely unfamiliar but also language which he did not under- 
stand, a system of measurements which he did not use, and quota- 
tions in money which was absolutely foreign to him. This is cited 
as an example of the effect of the average American catalog on 
a Latin American buyer, and is one of the reasons why catalogs 
so compiled are extremely inefficient. 

What a Catalog Should Contain. — The manufacturer who 
desires to build a business with Latin America and is conscientious 
in supplying details should be certain that his quotations are 
perfectly clear on the following basic points, in order that the 
Latin American merchant may not have to waste time in corre- 
spondence or indulge in guesswork: 

1. Exact prices in American gold. These should be accompanied 
by the equivalents in the money of the country to which the catalog 
is sent. If in a currency subject to fluctuation, the rate of ex- 
change at which the calculation is made should be stated. 



CATALOGS AND QUOTATIONS 241 

2. Simple discounts, preferably from a general price list issued 
separately; one to wholesalers, one to retailers. 

3. If the quotation is made free on board vessel, it should be 
stated at what port the quotation is effective. 

4. If quotation is made f.o.b. factory, it should be accompanied 
by an exact memorandum showing cost of freight from interior 
point to port, cartage, lighterage charge (if any), and other ex- 
penses to which the shipment may be subjected. 

5. All calculations relating to measurements, dimensions, 
weight, and values should be reduced to the metric system. This 
is a very simple matter and requires only slight effort. It is par- 
ticularly desirable because of the confusion resulting from the 
various conflicting standards. The simplicity of the metric system 
and its employment in all Latin American countries makes this 
essential. 

6. The terms on which goods are offered should be given, and if 
offered on open account, details regarding the manner and date of 
payment should be embodied in a letter sent separately. 

7. Prices should preferably include charges for packing. If 
an extra charge for this item is essential, it should be stated in 
detail. 

8. It is desirable that quotations, particularly of commodities 
whereon freight charges are a serious consideration, be made c.i.f. 
port of entry in the Latin American country. This applies par- 
ticularly to specific quotations asked on certain articles. 

9. The exact shipping weights, including the weight of the 
article itself, plus packing, must be stated. 

10. Weights should be given both net and boxed. The cubic 
measurements of the cases should also be included. 

11. Each article should be furnished with a code name. This 
will save time and money when the cable or telegraph is used for 
orders. 

12. The merchant should be assured that packing and shipping 
directions will be followed to the letter. 

13. The catalog should have a proper index. This should be in 
Spanish with the English equivalents to permit easy and quick 
reference. 

Full information regarding the means of obtaining weights, 
measures, and values for Latin America will be found on page 527. 



V 



242 EXPORTING TO LATIK AMERICA 

The Use and Value of a Supplement. — Many manufa<3turers who 
contemplate doing" business with Latin America find that at the 
outset a translation of their entire catalog would involve too great 
an expense. This difficulty may easily be overcome and good 
results achieved by the use of a key or supplement. The number 
of articles described may be limited or extended as circumstances 
dictate. The manufacturer by a preliminary study can determine 
upon the particular items among his products which will prove 
most salable, and confine his supplement or catalog thereto. The 
supplement may even be in skeleton form with limited descrip- 
tion of the principal features of the catalog given in Spanish and 
accompanied by the prices. 

Catalog Making a Science. — The development of export trade 
has become highly specialized and in no department is it more 
marked than in that of obtaining business by means of the catalog. 
No matter whether a supplement or an entire catalog is translated 
it is a wise policy to employ only translators who know their 
business perfectly. For instance, in the case of technical goods, 
only men with technical experience should be engaged. If a cata- 
log of electrical specialties is desired it is highly important that a 
man absolutely familiar with trade names in the electrical field 
be engaged to do the work. This should not be left to a translator 
who perhaps is familiar only with the dry goods or other business 
entirely distinct from the electrical field. 

Features to Emphasize. — The same general principles govern 
the making of catalogs for Latin America as in the United 
States. The catalog should not contain merely statements of price 
and technical description. It is important that the strongest, most 
convincing detailed selling arguments shall be used. As the use 
of articles listed in a catalog varies so greatly, the selling points 
should be those which are pertinent to the different countries. 

The following are concrete examples : 

If the manufacturer is able to supply a product in the sale of 
w^hich the weight and transportation are important factors, they 
should be dwelt upon. If the packing is different from the ordi- 
nary (for instance, adapted to peculiar tropical conditions), this 
advantage should be emphasized. These are features which will 
be of interest to the prospective buyer and must be brought to his 
attention forcefully. 



CATALOGS AND QUOTATIONS 243 

Necessity for Stating- All Advantages. — A catalog, to be a sales 
producer, should fulfill the functions of a salesman. It should 
state clearly and logically the advantages and selling features of 
the' article illustrated. The care with which this feature is worked 
out will determine its success or failure. The greatest stress should 
be laid on the quality, efficiency, or individuality of the goods, and 
not upon cost. This is so essential because in almost every in- 
stance articles imported into Latin America are used by the classes 
that can afford to pay for them, and foreign business can far more 
easily be established on the basis of quality than on mere cheapness. 

How to Feature Selling Points. — In the preparation of catalogs 
sent to Latin America it will be found profitable to insist upon 
the very highest sales efficiency in order to stimulate the importer's 
interest. It is necessary to state in simple but convincing terms the 
"talking^' points of the article illustrated, that the prospective 
buyer may visualize it and understand thoroughly its superiority, 
durability, workings, or other features. It is desirable to give such 
a complete, accurate description that there may be no need for 
fvirther inquiry and correspondence, which is time consuming and 
expensive. 

Letters Tliat Accompany Catalogs. — No catalog should be mailed 
to Latin America without an accompanying letter and it should be 
planned that both arrive simultaneously. If properly constructed 
the letter will gain the attention of the recipient and insure the 
opening of the catalog. Many of the features embodied in the 
successful domestic sales letters, if skillfully adapted to the 
Latin American viewpoint, will prove even more successful in 
that field than at home. However, it is absolutely essential to 
include all details necessary to a clear understanding of the 
proposition. 

Avoidance of Misleading Terms. — It is not alone upon the gen- 
eral preparation of a catalog that its success is based, but it is of 
equal importance that it be easily understood. For this reason 
the use of American trade terms or business expressions should be 
avoided. The compiler should have in mind the attitude of the 
Latin American, and the greater the simplicity and the more 
forceful the manner in which the strong selling points are empha- 
sized, the greater will be the results achieved. Enough care should 
be taken to iocliide every bit of detailed information that will be 



244 EXPORTING TO LATIN AMERICA 

of value. Generalities should be avoided. Conscientiousness in 
the preparation of a catalog will pay for itself many times over. 

The Importance of Details in Catalogs. — With every article 
should be stated the exact quality, size, colors, finish, capacity, and 
weight of commodities that are packed in a case or package. The 
weights of the packing should also be stated in order that a mer- 
chant may make his calculations of duty intelligently. If extra 
charges of any nature are to be made, they should also be men- 
tioned. 

The Use of the Metric System. — Since the standard of measure- 
ment and value in Latin America is the metric system, the Eng- 
lish or American system makes it extremely difficult for the Latin 
American business man to understand quotations unless made in 
the metric system. This is fully outlined in a pamphlet listed on 
page 493 of the Appendix. 

Reasonable Prices Advisable. — Many business men look upon 
Latin American trade as a means to larger profits than the domes- 
tic market affords. The law of supply and demand naturally gov- 
erns transactions with the southern republics, but the principle 
of a fair profit in order to insure the very largest consumption 
possible should influence the making of prices. Under all condi- 
tions the exporter must consider competition, not only American 
but European, and must remember that the Latin Americans are 
excellent judges of values. 

Other Essentials in Quoting Prices. — Prices should invariably be 
quoted to appear most attractive. Even when the manufacturer 
adds an additional percentage of profit to his foreign prices, he 
should endeavor to make his quotations seem the most reasonable 
possible. Only by so doing can he enlist the interest of the Latin 
American buyer. His European competitors understand these de- 
tails and it is frequently this competition which is the most diffi- 
cult to meet. 

Meaning of Currency Signs. — In correspondence with dealers 
in Latin America, American manufacturers who use the dollar 
sign should specify that it is the American dollar sign which is 
meant. The dollar sign as used by Americans, particularly those 
who make quotations in foreign money, is sometimes misleading. 
The quotation $4.00, for instance, sent to a Peruvian merchant, 
luay, unless otherwise specified, be interpreted by him to mean four 



CATALOGS AND QUOTATIONS ^46 

soles, just one-half the value of five American dollars. Where 
quotations are in gold, the fact should be so stated, and followed 
by the word "American," Oro Americano. If at all possible, quo- 
tations should be made in the currency of the country wherein trade 
is desired, but if this is not feasible the aforementioned system 
should be followed. 

The Importance of Durable Catalogs. — Catalogs should be thor- 
oughly practical for continued use and reference and constructed 
to withstand the ravages of varying climates. Particularly is this 
so of catalogs to be circulated in the tropics, which should be strong 
durable books printed in large clear-faced type on a good quality of 
paper. The use of fancy designs and very faint ink should be 
avoided because of the difficulty of reading them in the glaring 
sun. 

The Value of a Convenient Catalog. — In order to be most useful, 
catalogs should be of a size which will make them available for 
reference and filing. Odd shapes, lengths, and dimensions should 
be discouraged, as the catalog most likely to be preserved is one 
that can be easily filed. Whenever possible catalogs should be 
bound in cloth. The back should be sufficiently stiff so that when 
stood on edge it may be kept upright. 

The Value of Good Illustrations. — As the chief means of giving 
the fullest information regarding a manufacturer's products is the 
illustrations, the necessity for proper display is apparent. Only 
a shortsighted policy would influence the manufacturer to use 
cheap or inadequate cuts, since the expense of printing a page is 
equally great no matter what the efficiency of the illustrations. The 
most perfect illustrations which show the article quoted to the best 
advantage should be used. This will, in the long run, prove by 
far the most successful policy, for notwithstanding a heavier initial 
outlay the results will easily compensate therefor. 

The Importance of the Wrapper.^-No matter how carefully a 
catalog is compiled and how tastefully it is printed, unless it is 
inclosed in a proper wrapper to withstand the rough usage to 
which it is subjected in the mails, it is likely to fail in its purpose. 
It is for this reason that the outer wrapper or covering should 
be of the most substantial sort. A return card, printed in Span- 
ish, providing for the return to the sender in case of nondelivery, 
should invariably be printed on the envelope. When valuable, 



2-^ EXPORTING TO LATIN AMERICA 

cloth-covered catalogs are dispatched to interior points which are 
difficult of access, the use of oilcloth wrapping is advisable. This 
will serve to protect the book against possible damage from rains, 
or immersions in water when streams are forded. 

Why Prices and Terms Should not Be Printed. — It is not alone 
in the advertising matter but in the catalogs also that retail prices 
and terms should not be stated. Particularly should the retail 
prices common in the United States never be placed on the goods 
themselves. The reason for this is apparent when it is considered 
that the tariffs are high and the freight likewise an extremely 
important item, especially for interior points. This makes the 
prices of articles to the consumer vary greatly, not alone in the 
different republics but even within one country. As an instance 
may be cited Brazil, with a coast line of 5000 miles, and interior 
places three and four weeks distant from Eio de Janeiro. The 
terms should be stated only in individual communications to the 
importers. 

Prices and Discounts Indispensable to Consuls. — Many American 
manufacturers find it desirable to send their catalogs and printed 
matter to the American Consuls in the Latin American countries. 
This has sometimes led to business, and it at least serves to make 
it possible for the Consul to know of the existence of a manu- 
facturer, should it come to his knowledge that the particular class 
of manufacture is required. When catalogs for this purpose are 
forwarded, they should invariably be accompanied by a letter in 
which the Consul is given full information regarding the exact 
net prices or discounts. Otherwise it may happen that at least two 
months' time may elapse before a definite quotation can be made. 

Necessity for Maintaining Prices and Discounts. — It is er- 
tremely important, in trading with Latin American dealers and 
in cataloging goods, to fix prices which may be maintained for a 
considerable length of time. While it is desirable in many in- 
stances to furnish separate price sheets, if conditions necessitate 
this they should be so fastened in the back or front of the catalog 
that they may not be easily lost. Because of the fact that price 
lists are misplaced so frequently, many merchants prefer to give 
in the catalog a price which is subject at the most to two dis- 
counts — one to the wholesaler, and one to the retailer. 

Separate Price Sheets Advisable. — Because of the numerous 



CATALOGS AND QUOTATIONS 247 

classes of dealers in the Latin American countries it is advisable 
that prices and discounts be printed separately. To insure the 
minimum risk and least possible embarrassment to the recipient, 
such sheets should be mailed apart from the catalog and care 
should be taken to provide for several profits to different classes 
of dealers, importers, or distributors, local agents, etc. Manu- 
facturers who must meet this condition at home will have no diffi- 
culty in doing so in the Latin American republics. 

Other Essentials in Quoting^ Prices. — If it is desired to expedite 
trade with Latin America, prices should be quoted f.o.b. (free on 
board ship). This is particularly important on some commodities, 
inasmuch as the Latin American dealer has no means of knowing 
the cost of freight from the point of origin in the interior to the 
port of embarkation, the cartage to the ship, the lighterage, etc. 
In some instances merchandise is loaded direct from freight car 
to vessel, and in other instances lighterage charge must be paid. 
The manufacturer who simplifies calculations for his clients will 
find it possible to increase his business materially. 

Precautions Necessary in Quoting Prices and Discounts. — It is 
very important, when quoting prices and discounts to inquirers, that 
they be given only to bona fide prospective buyers. If a catalog 
is used, the discounts should be quoted in a confidential letter with 
instructions that they be used with the utmost reserve. No cata- 
logs should be mailed to merchants who make inquiries without 
very definite prices and discount quotations, as otherwise they are 
utterly useless. 

Offers with Time Limits not Desired. — Many American manu- 
facturers fail to take into consideration the time required for 
correspondence to reach their Latin American customers, and for 
the latter to consider the advantages of a quotation. For this rea- 
son, when a time limit is placed in circulars which contain special 
offers, the time should be calculated very carefully with reference 
to the places to which it is sent. 

Simple Discounts Preferable. — One of the complaints most fre- 
quently made against American manufacturers is the use of an 
involved system of discounts. The Latin American dealer, because 
of the necessity of making calculations for freight, duty, surtaxes, 
and agent's charges incidental to the importation of goods, objects 
to receiving a quotation based on a discount of 30, 25, 10, 10 and 



248 EXPOETING TO LATIN AMERICA 

5, or similar discounts. In making a quotation, the greatest sim- 
plicity should be encouraged, and the dealer should not be expected 
to accustom himself to the intricate American system of arriving 
at net prices. 

The English and other shippers to Latin America generally have 
not more than two discounts, and usually only one. When the same 
catalog is to be used for circulation among wholesalers, retailers, 
and consumers, the utmost care should be taken in the preparation 
of the price list. This should be so arranged that one discount 
from the price will indicate the cost to the wholesaler, another 
the discount to the retailer, and the third, or list price, the price 
to the consumer. 

Need for Care in Preparing Price Lists. — The annoyance caused 
by multiplicity of discounts is increased by the differences in 
quotation from a standard set of prices on the same class of 
merchandise by two or more manufacturers. This is particularly 
exasperating to dealers who receive a quotation at a certain time 
and ascertain upon forwarding an order, only a short time there- 
after, that an entirely new combination of discounts has superseded 
the former one. 

The Use of Codes in Catalogs. — The importers of Latin America 
will be greatly aided by the publication in the manufacturer's cata- 
log of a simple code which not only refers to items described but 
likewise provides a series of word combinations which make easy 
the placing of orders or duplicate orders. Such combinations can 
be worked out by code experts, or code words relating to items 
illustrated can be easily used in connection with the more promi- 
nent cable codes, which are very voluminous. 

Proper Distribution of Catalogs. — It is not alone in the careful 
compilation of a catalog that its success consists. This will be 
dependent largely upon its distribution. No matter how care- 
fully compiled and translated, nor how beautifully illustrated, 
the value of a book may be lost if it fails to reach the proper mer- 
chants. The distribution of a catalog, particularly if heavy and 
expensive, should be considered with the greatest caution and care. 

In many cases catalogs have been sent at the mere request of 
a consumer to whom were given the quotations that should only 
have been allowed to the dealer. Every inquiry should be care- 
fully weighed and catalogs should never be sent indiscriminately. 



CATALOGS AND QUOTATIONS 249 

The rules outlined in Chapter IX, relating to mailing, should be 
absolutely adhered to. 

The Distribution of Technical Catalc^fs. — Manufacturers of 
technical machinery and apparatus will find it advantageous to 
place their catalogs, booklets, and advertising matter in the hands 
of practical engineers and technical experts of various lines. 

Organizations of such experts exist in the more important cities, 
and to them should be sent the matter, as heretofore suggested. 
An association of this character is the Institute of Engineers of 
Chile, whose address is Instituto de Inginieros de Chile, Santiago, 
Chile. Another is the Society of Mining Engineers, Sociedad 
Nacional de Mineria, also at Santiago. Names of similar organi- 
zations may be obtained from the Department of Foreign and Do' 
mestic Commerce. 

Duty Exacted on Catalogs. — In some of the Latin American 
countries, for instance Brazil, catalogs in bulk that are destined 
exclusively for advertising purposes and are imported for free 
distribution are compelled to pay a duty of 3^ cents per pound. 
When catalogs are sent singly by mail they are exempted from this, 
unless the number sent by the consignor in any one mail is suffi- 
cient to be considered a shipment in commercial quantities. For 
that reason a mailing should be distributed over a sufficient length 
of time to insure its carriage on separate steamships. 

Why Catalogs Are Often Detained. — Lithographed advertising 
matter is likewise subject to duty when weighing more than four 
ounces. Catalogs for Brazil should be printed in as small a form 
as possible, preferably in separate sections rather than in one bulky 
volume. On the outside label they should be marked Catalogo sem 
valor. 

Proper Quotations Aid Sales. — The development of business with 
Latin America can be greatly aided by painstaking attention to 
details. In no other phase of export business is this more essential 
than in the matter of price quotations. This emphasizes the neces- 
sity for a thorough understanding of the terms used. The tech- 
nical abbreviations are the following: c.i.f., f.o.b., f.a.s., c.i.f.&e. 

Much correspondence and time can be saved if quotations are 
made c.i.f. destination, inasmuch as merchants are not inclined 
to waste their time with propositions which they cannot under- 
stand and which do not show them some particular advantage. 



250 EXPORTING TO LATIN AM^ICA 

In many places it is very difficult for importers to obtain informa- 
tion regarding the cost of freight, while on the other hand, it is 
easy for American manufacturers to make quotations for merchan- 
dise "laid down/' Where freight is an important factor and prices 
are only quoted f .o.b. at an interior American point, they are given 
scant consideration. 

The Meaning of Quotations Made C.I.F. — The generally ac- 
cepted definition of the abbreviation c.i.f. in the Latin American 
trade is, "cost, insurance and freight/' When a price is quoted 
with this abbreviation it is understood that the price includes the 
value of the product plus the freight to the place stated and plus 
the cost of insuring the goods against marine risk. The necessity 
for obtaining this quotation is apparent for the reason that marine 
insurance covers the loss of goods while on shipboard, inasmuch as 
the steamship lines, when issuing a bill of lading, disclaim there- 
upon any liability for loss of the property. This is in contradis- 
tinction to the responsibility of a railroad coinpany which is liable 
except for "acts of God." Thus in c.i.f. quotations the shipper 
pays the charges or freight and insurance but assumes no other 
responsibility. 

The Desirability of C.I.F. Quotations. — The advantages of 
c.i.f. quotations are obvious, as the Latin American exporter is at 
a loss to determine freight charges, particularly the cost of trans- 
portation from an inland port to the port of embarkation. In mak- 
ing these quotations there should be taken into account the mini- 
mum rates of steamship companies, which are excessive for small 
shipments. The manufacturer must also take into consideration 
the gross weight of the article on which he quotes, besides the cubic 
measurements. The former determines the railroad freight, the 
latter the ocean freight. It is desirable in quoting c.i.f. that the 
manufacturer ascertain the unit that is covered by the minimum 
bill of lading issued by the steamship company. By this means the 
cost of an article to the dealer is easily arrived at. When a quota- 
tion is made c.i.f. port of entry, the manufacturer should be care- 
ful to state whether the quotation includes the duty. If he is 
unfamiliar with the tariff assessed and if he wishes to be perfectly 
safe, his quotation should read: "Cost of goods, c.i.f., port, duty 
for account of purchaser." 

It should always be made clear whether the quotation is made 



CATALOGS AND QUOTATIONS ^61 

"delivered at a given port/' or whether this is to be interpreted 
."c.i.f. to the port." In this respect nothing should be left to the 
imagination, as misunderstandings easily arise and losses are often 
placed upon the shipper. 

The quotation c.i.f. and e. means "and exchange/' being used 
when the shipper assumes the expense of the exchange. 

The Meaning of F.O.B. Quotations. — In this quotation the 
shipper pays all charges and is responsible until delivery of the 
shipment has been made^ In quoting to a Latin American dealer 
f.o.b. (freight on board), the manufacturer should be careful to 
state whether the price is based f.o.b. freight cars at the interior 
point of origin or f.o.b. steamship at port of embarkation. When 
a quotation is made f.o.b. interior point, the merchant should also 
be advised of the exact cost of freight from factory to port, the 
charges for getting it on board the steamer, including the transfer, 
lighterage, etc. 

F.o.b. quotations are frequently desired by Latin American 
importers who have their own agents in the port, generally New 
York City, and are fully aware of the charges that will be made 
for handling a shipment. In order that the Latin American buyer 
shall have every advantage, the manufacturer should seek to obtain 
from various sources (freight forwarders, foreign freight agents of 
railroad companies, etc.) competitive quotations, and furnish not 
only quotations f.o.b. port but also f.o.b. steamer. This applies 
with equal force to quotations made c.i.f. port of entry in Latin 
America. 

The F.O.B. Quotations Via New York. — In shipping goods to 
Latin American countries by way of seaboard in the United States, 
the rates quoted by railroad companies include the placing of the 
merchandise on board the steamship. They also include the re- 
moval of freight from the cars to the steamship itself and apply 
to practically all classes of freight except certain tonnage which 
can only be lifted by cranes and for which specific charge is made. 

The same custom is followed in New York City in the case of 
carload shipments which come from interior points, and no charge 
is made for the cost of carrying them from the railroad stations 
to the steamship in lighters. 

The complaints made by many Latin American buyers concern- 
ing the items specified on invoices received from the manufacturers 



25^ EXPORTING TO LATIN AMERICA 

for preparation of bills of lading, drayage or cartage, handling, cost 
of ferrying, expense of lighterage, etc., can be obviated if the 
shipper in the interior will give personal attention to the forward- 
ing of shipments in less than carload lots. The advantage of a 
reliable forwarding agent, with whom definite arrangements can 
be made, here again is apparent. 

The Meaning of F.A.S. duotations. — The quotation "freight 
along side" is rather uncommon and requested very rarely. It 
is sometimes asked by Latin American importers, particularly those 
dealing in very bulky or heavy tonnage, who find it advantageous 
to have their own representative in New York to look after the 
loading. Certain classes of freight require special machinery for 
the purpose of getting them aboard steamship. The machinery is 
usually a large crane and when packages weighing in excess of two 
to five tons are raised, a charge for this service is made in addition 
to the railroad rate. When a quotation is made f.a.s. it is under- 
stood that the Latin American buyer will pay this charge, which 

in contradistinction to a quotation f.o.b. 

The responsibility of the shipper is limited to the delivery to 
steamer, lighter, or pier as may be agreed. No other risks are 
assumed by him. 

How Cluotations Should Be Made. — It is of the utmost impor- 
tance in quoting c.i.f. to obtain exact figures. These can be gotten 
by the various means outlined. No shipment should be made with- 
out a definite request for a rate, and if application is made through 
various sources (i.e., foreign freight agents of railroad companies, 
freight forwarding agencies, forwarding departments of express 
companies), the result will be to the advantage of the shipper. 
This is due to the fact that at certain periods some steamship 
lines are in a position to quote better rates than competitors be- 
cause of a greater amount of room ; besides which competition may 
likewise cut an important figure. 

Almost invariably steamship lines fix a minimum charge for the 
issuance of a bill of lading, charging $5.00, $7.00, or $9.00 each, as 
the case may be. In &uch instances the charge is made regardless 
of the size of the case, provided it is less than the minimum of cubic 
feet fixed by the officials of the steamship lines for a minimum bill 
of lading. Thus, if this minimum is 55 cubic feet, and two cases 
are tendered, the cubic contents of which measure only 30 cubic 



CATALOGS AND QUOTATIONS 263 

feet, the charge will remain the same. It is highly essential, there- 
fore, that manufacturers, when making foreign shipments, should 
seek to obtain the lowest possible minimum bill of lading and 
should endeavor to make shipments that at least measure up to 
the minimum in order that excess freight may be avoided. 

The Advantage of Quotations. — Although time, patience, and 
careful attention to details are required in order to furnish c.i.f. 
or f.o.b. quotations to Latin American buyers, the painstaking 
manufacturer who is willing to make this effort will find that his 
business will grow much more rapidly as a result. Such quotations 
can now be made more easily than in the past because of the 
numerous means of obtaining rates. 

An Aid to Quotations C.I.F. — A publication of great value to 
American exporters, which will enable them to quote prices c.i.f. 
to inland points in the republics on the west coast of South Amer- 
ica, is described on page 495 of the Appendix. 



CHAPTER XVI 
LATIN AMERICAN TRADE LISTS AND DIRECTORIES 

Introduction. — Perhaps the greatest source of loss in attempts 
to win Latin American trade has been the indiscriminate circu- 
larizing of Latin American dealers by American manufacturers. 
Proportionately the loss in Latin America has possibly been even 
greater than in the United States, not only because dealers do not 
use printed matter to the same extent as in this country, but also 
because the cost of mailing letters is five cents for each half -ounce 
or fraction thereof. 

The demand for reliable trade lists increases in direct ratio to 
the interest of American manufacturers in export trade. Very 
often manufacturers conclude that they have a desirable article 
which could be sold advantageously in Latin America and to in- 
troduce it they require competent local or general agents. In other 
instances, such manufacturers are unable to make profitable expr)rt 
house connections and decide to try direct effort. The possibiu 
ties of extending the mail order business to Latin America like- 
wise serve to create a demand for lists of the names of possible 
buyers. 

The Sources of Names for Lists^ — There are many sources of 
obtaining names of dealers and individual buyers in Latin Amer- 
ica; the most common of these are: 

1. United States Consuls. 

2. Local foreign directories. 

3. Directories of the world. 

4. Lists supplied by companies engaged in supplying such 
names. 

5. Names furnished by export trade journals. 

6. Lists compiled by business organizations. 

7. Foreign banks. 

8. Foreign custom house agents. 
df Traveling or local salesmen. 

254 



TRADE LISTS A^D DIRECTORIES 255 

10. The various directories issued by the Bureau of Foreign and 
Domestic Commerce. 

A consideration of each of these methods, their advantages and 
disadvantages, is essential. 

United States Consuls. — One of the means most frequently used 
to obtain lists of names is for manufacturers to write to United 
States Consuls, and such requests usually meet with prompt re- 
sponse. Conscientious efforts to supply only dependable names are 
made by the average Consul, yet he is at a serious disadvantage, 
for he is generally unfamiliar with the conditions which govern 
the manufacturer's efforts to secure foreign trade. The custom 
of writing American Consuls for this information should be dis- 
couraged, inasmuch as the Bureau of Foreign and Domestic Com- 
merce at Washington, in cooperation with American Consuls, has 
obtained a revised and detailed list of the principal importers and 
merchants of Latin America. By making application through the 
nearest branch office of the Bureau the desired names may be 
gotten. 

In some instances the lists thus obtained may prove inadequate 
and letters to American Consuls may be necessary. When such 
requests are made (and they should be sent through the Bureau 
of Foreign and Domestic Commerce at Washington), the manu- 
facturer should state definitely his requirements. He should be 
particular to say whether he wishes to deal with general importers, 
to establish agencies, or to sell at retail. By giving the Consul 
the fullest details the latter will be able to act far more intelli- 
gently than if left to guess at the information desired. 

Local Foreign Directories. — There are available in almost every 
city of importance local directories which can be had as indicated 
on page 498. However, the disadvantages of such directories are 
obvious, the publication often being too old to be accurate or com- 
plete and merchants usually being classified regardless of standing 
or responsibility. Furthermore, indiscriminate circularizing is both 
expensive and dangerous, inasmuch as the manufacturer's prices 
and discounts may fall into the wrong hands. 

In the event that it is desired to use names thus obtained for 
circularizing, a list should be made thereof and submitted to local 
banks or individuals in a position to know something of the stand- 
ing of dealers, with the request that the names of those unworthy 



256 EXPORTING TO LATIN AMERICA 

of credit or no longer in business shall be removed. This plan will 
serve to minimize waste. In making such a request the letter 
should be very carefully worded and accompanied by an interna- 
tional postal coupon (cost, six cents) for the reply. 

Directories of the World. — There are several directories pub- 
lished by European firms, giving lists of dealers in almost every 
important place in the world. These are frequently the source of 
much waste circulation, because of lack of sufficient revision and 
also because they are incomplete. Before the cards made from 
such names are placed in a permanent file for frequent use, the 
accuracy and responsibility- of the names should be verified by 
letters to local banks or to United States Consuls who may also 
be of service in the correction of these lists. 

Lists Supplied by Companies That Sell Names. — Addressing com- 
panies who have a list department are accustomed to advertise the 
sale of foreign trade lists to which may be made the same general 
objections as those in the preceding paragraphs. If such names 
are obtained they should be verified by the methods already 
suggested. 

Lists Furnished by Export Trade Journals. — The names of deal- 
ers furnished by export trade journals are more likely to be 
reliable than those selected arbitrarily from directories. This 
is due to the fact that the names are obtained from reliable corre- 
spondents of the publishers, and in many instances they are the 
names of actual subscribers. Furthermore, by means of lengthy 
experience, the publishers are likely to recognize the importance 
of verified lists. Names obtained from this source will serve as 
a good check for lists gotten otherwise. 

Lists Compiled by Business Org^anizations. — Membership in a 
business organization, a feature of whose work is assistance in 
foreign trade extension, may entitle the manufacturer to certain 
trade lists. Names thus supplied are usually gathered by means 
already described. However, an efficient secretary of such a trade 
body can render valuable service in the checking of lists by submit- 
ting names for revision to the officers of the Chambers of Com- 
merce and other commercial organizations of Latin America. In' 
any event when names are supplied by commercial organizations, 
the manufacturer should insist upon knowing how they were com- 
piled. 



TRADE LISTS AND DIRECTOBIES 25'}' 

The Assistance of Foreign Banks and Bankers. — ^Another means 
of obtaining names is that of writing banking houses in Latin 
American cities, stating in detail the requirements. This is usually 
effective but particularly where it is desired to establish agencies. 
In the event that lists are requested of banks, it may prove advis- 
able to submit names obtained from other sources, which will 
enable the bank to run over them quickly and check those not 
desirable. 

The World's Trade Directory. — Several years ago the Depart- 
ment of Foreign and Domestic Commerce in Washington compiled 
a "World's Trade Directory" which included the names of commer- 
cial houses and importers in general located in various parts of 
the world. These names were gathered by United States Consuls 
and were classified according to industries. If used, as all trade 
directories should be used, in a limited way, they can be made to 
assist materially in the formation of a mailing list. 

The Revised Trade Directories of South -^nerica. — Because of 
the insistent demand for a revised directory of Latin America 
exclusively, and one more complete and reliable than the first 
edition, the Department has published several volumes of directo- 
ries. These contain a detailed list of South and Central American 
importers and merchants, and as the revision has been made in 
cooperation with American consular officers, the names were 
brought up to date of publication. These directories are listed on 
page 504 of the Appendix. 

How Names Are Listed. — As far as the information could be 
obtained, the names of American and other foreign agents of 
South American importing firms were listed; and importing firms 
and branch houses located in various South American cities also 
appear therein. In the preparation of the directories there were 
included only the names of such merchants or other individuals 
who seemed likely purchasers of North American materials or 
merchandise. The directories are bound in buckram in octavo 
form. 

Requisites for Latin American Mailing Lists. — 1. System is the 
first requisite in the formation of any list and is especially im- 
portant in establishing a mailing list for Latin America. The 
care and preparation of such a list should be delegated to one 
person on whom the responsibility for its upkeep may be de£- 



258 EXPORTma TO LATIN AMERICA 

nitely placed. This person should preferably have some knowl- 
edge of Spanish and of conditions in Latin America. 

2. The lists should be divided into at least two classes, the 
unverified and verified. As fast as a name has been definitely 
proved a desirable prospect it should be placed in the verified divi- 
sion with full data regarding the basis on which it is verified, that 
is, whether approved by bank, consul, correspondent, or by a defi- 
nite letter or order from the merchant himself. 

3. The foundation of the verified list should be the names of 
dealers who have answered advertisements; made inquiries for 
goods; asked quotations; or those to whom shipments have been 
made; names supplied by local agents, etc. 

4. When information is obtained, its source should be noted on 
the card. A good method is the use of two checks; that is, con- 
sulting the American Consul as well as banks or other sources. 

5. Traveling salesmen or local agents should be supplied with 
lists of all names obtained from the various sources, and they 
should be compelled, after visiting a town, to furnish a revised 
list with notations relative to each name. Careful attention to 
this detail will result not only in an immense saving but like- 
wise in the utmost efficiency in the distribution of printed matter. 

The Classifications in Latin American Lists. — Trade lists as ob- 
tained from directories are often inadequate, inasmuch as im- 
porters frequently handle all sorts of commodities and may be listed 
only under one heading. 

For this reason they may not be circularized unless information 
has been obtained to indicate exactly what goods they sell. In 
this connection the value of personal investigation by local or 
traveling agents is apparent. 

Although the immediate results obtained by a traveling sales- 
man may not be in proportion to his expenses, the gathering of 
names with which correspondence can be carried on will prove 
very valuable. 

Factors to Consider in the Use of Lists. — No matter with what 
care a list is compiled it should be constantly revised. Changes 
occur in the mercantile world of Latin America as in the United 
States and unless these changes are noted on the cards much use- 
less and expensive circularizing may be done. When lists are ad- 
dressed, the utmost care should be taken to use the correct pre- 



TRADE LISTS AND DIRECTORIES 259 

fixes, and, in the larger cities, street addresses, post-office boxes, 
or names of stores. These are absolutely indispensable details, as 
the possibility of loss in the mails is much greater than in this 
country. 

Trade Lists for Mail Order HausesN — The rapid development of 
the mail order business with Latin America and the opportunities 
for mail order houses in that field have aroused a great interest 
in the means of obtaining names of possible buyers. In the chapter 
devoted to the mail order business are given concrete suggestions 
as to whom to approach. The names are available in the local 
directories, of which a list is given in the Appendix. The most 
reliable source of names of consumers is the latter themselves, as 
they frequently submit long lists of possible users of American 
products. The method of obtaining these is indicated in Chapter 
XYIII. 

List of Local Directories. — For the information of those requir- 
ing local directories a list of those of the principal cities is given 
on page 498 of the Appendix. The names and addresses of the 
publishers are also given, together with the cost of the directories. 
Naturally revisions and additions are continually being made. 



CHAPTER XVII 

ADVERTISING IN LATIN AMERICAN NEWSPAPERS AND 
MAGAZINES 

Introduction. — Advertising, in its broadest sense, is an all-im- 
portant factor in developing business with Latin America. Not- 
withstanding the scientific basis upon which advertising has been 
placed in this country, the standard as applied to Latin America 
S/ is still very low . Taking as an example the v^,piLfl]7]f>^]p t of mongy 
which is bei ng expended w astef ully. advertising may well be said 
to be in its infancy in the southern republics. 

The uses of advertising in Latin America are as diverse as in 
the domestic field. It can be used for the purpose of opening 
markets, creating demand among dealers or consumers, influencing 
direct orders, and for all other purposes which have made it such 
a powerful influence in American business. 

Adapting American Ideas. — Advertising may be employed in 
Latin America in practically every form that is known in the 
United States. Fundamentally, the principles which govern its 
successful use are identical, although the methods of application, 
because of conditions, are different. Experience has proved that 
many excellent advertising campaigns have been equally success- 
ful in Latin America when the necessary changes to adapt them 
to the Latin American viewpoint were made. In the southern 
countries, as in the United States, it is merely a question of th« 
right appeal, not only to the dealer but particularly to the ulti* 
mate consumer. In many instances the failure of advertising 
campaigns has been due solely to a neglect of the latter factor. 

The Essential of Advertising Helps. — A piece of advertising 
matter which proves effective in the United States may be alto- 
gether valueless in the Latin American countries. An error which 
is extremely frequent, and which should be guarded against, is 
that of inserting in advertisements the same prices as those current 
ift the United States. The manufacturers who do this fail to take 

^60 



ADVERTISING IK LATIN AMERICA ^61 

into consideration differences in monetary standards, besides duty, 
freight, and other charges. An advertisement with prices quoted 
in United States gold, even if properly translated, will be useless 
in the interior of Peru or Argentina, and the merchant who re- 
ceives it will be prejudiced against the manufacturer, instead of 
using the advertisement. 

Definite Purpose Needed. — No matter what form of advertising 
is decided upon, the manufacturer must have in mind a very defi- 
nite idea of the purpose he means to accomplish by its use. Care- 
ful planning and analysis in advertising for Latin America are 
even more essential than in the case of domestic publicity. 

The Various Kinds of Advertising. — The various forms which 
advertising may assume in the development of Latin American 
trade are many, but may be roughly classified as follows : 

1. Specific sales literature such as circulars, catalogs, letters, 
etc. 

2. Distribution of novelties. 

3. Advertisements in export papers and trade journals. 

4. Advertisements in the Latin American local papers. 

5. Advertising by means of signboards, posters, window dis- 
plays, etc. 

The Use of Advertising Helps. — Advertising helps in the great 
majority of cases are highly appreciated by dealers, particularly 
when properly prepared and printed. However, as in the case of 
similar matter in the United States, the waste in distribution is 
so great that before extensively undertaking their use the American 
manufacturer should inform himself definitely of the exact require- 
ments of the dealers in different countries and the desirability 
of supplying such helps. In preparing advertising helps, the fol- 
lowing factors should be carefully considered: 

1. Their suitability to conditions, not alone to one country but 
to- the different places in Latin America where they are to be 
sent. 

2. The cost to the merchant; that is, whether duty will be col- 
lected thereon. 

3. Whether any prices are to be printed on the advertising mat- 
ter and, in the event they are, whether these prices will be suitable 
ones for the countries in which they are used. 

4. "Layout" designs, copy and translation to suit requirements. 



^62 EXPORTING TO LATIN AMERICA 

Different Advertising Helps. — In order to be useful, selling 
helps must have an effective sales appeal. Those which have 
been found very successful are circulars, booklets, pamphlets, etc. 
When well illustrated and attractively printe(|, dealers have often 
found them even more successful in attracting trade than in the 
United States, for the Latin Americans have not been surfeited 
with printed matter of this character as have domestic merchants. 
Other forms of publicity such as *^cut-outs," window displays, 
posters, hangers, and newspaper cuts (electros) are also valuable 
when prepared with the Latin American viewpoint in mind. It 
is, however, very essential to insure the use of such helps, and 
to that end dealers should be particularly urged, in general letters 
from the advertising department, to lend their cooperation. 

Duties Sometimes Assessed. — In some of the republics duties are 
assessed on advertising matter, particularly if packed in quanti- 
ties and if the articles are of a useful character. Because of the 
duty and freight charges, the manufacturer should inform the 
customer of his willingness to pay them; if he is unwilling to do 
so, he should either omit the advertising matter or obtain the 
consent of the importers to pay the charges. This is a question 
about which there should be no doubt, as it is a fruitful source of 
misunderstanding. Furthermore, in the event that the advertising 
matter is not used, a needless expense will have been incurred. 

Souvenirs and Novelties. — The matter of duty applies with par- 
ticular force to advertising novelties and souvenirs, which are gen- 
erally very popular and useful in development of trade. These are 
of various kinds, but particularly fans, mirrors, pencils, etc. Oc- 
casionally customs officials will permit advertising matter to enter 
without the payment of duty, but it is a matter which the idiosyn- 
crasies of the customs officials alone determine. 

Window Displays. — This form of advertising, especially when 
included in an organized campaign, has been found quite as suc- 
cessful in Latin America as in the United States. An increasingly 
large number of stores are adopting modern show windows per- 
mitting adequate displays. To be effective, the displays must be 
in the language of the country in which they are exhibited. Be- 
fore these are shipped the manufacturer should ascertain the duty 
thereon, and should make it clear to his customer that the charges 
for freight and duty (if any are incurred) will be for his account. 



ADVERTISING IN LATIN AMERICA 263 

Metal and Other Signs. — Posters, hangers, and signs, when at- 
tractively designed, prove a valuable means of securing publicity. 
The keynote, however, should be the use of a distinctive trade-mark 
which can easily be remembered, and all other advertising done 
should likewise be based upon this idea. Signs are frequently dis- 
played by merchants along highways, on walls, etc. Much waste 
can be avoided if the^ manufacturer will draw particular attention 
to the shipment of this material, with a request for its proper 
use. As an example of the value of signs may be cited the in- 
stance of an English company which manufactures ink. A sign 
properly painted in Spanish was placed at every railway station of 
the Argentine Republic with the result of a large increase in 
business. The signs of a well-known sewing machine which has 
world-wide distribution may also be mentioned, as they are to be 
found in the most obscure hamlets of Latin America. 

Electric Sig^s ajid Novelties. — In all places where electricity has 
been introduced, and especially in the larger cities, its use for 
advertising is rapidly increasing. Lighted signs and attractively 
illuminated windows are appreciated particularly, as in many of 
the Latin American cities the main streets or plazas are the cen- 
ters of community life and the streets in which the stores are 
located are more generally thronged than is the case in the United 
States. In the preparation of all advertising great care should 
be taken that it does not conflict with the religious beliefs or 
practices. By far the largest percentage of the population of Latin 
America is Roman Catholic and all prejudice should be studiously 
avoided. 

The Value of Moving Picturesu — The development of the mov- 
ing picture industry in Latin American cities has been as impor- 
tant as in the United States, and cinematograph films may be used 
to great advantage, as exhibitions, even in the smaller places, 
are as frequent as in this country. ^Hien an appeal to the ulti- 
mate consumer is to be made, this form of advertising can be used 
very extensively and many important successes have already been 
achieved in this field. 

Taxation of Advertisements and Their Regulations. — ^As in all 
other forms of business in Latin America, taxation is an important 
factor in advertising. This is particularly so in the large cities, 
and a tax is collected on every outdoor sign, whether in the form, 



264 EXPORTING TO LATIN AMERICA 

of a poster, of a billboard or an advertisement on an advertising 
kiosk, which is a structure partaking of the nature of a billboard. 
Full information regarding these taxes may be obtained from 
the advertising agencies located in the large cities, as they are 
an expense which must be considered in making an appropria- 
tion. 

Latin American Advertising Prospects. — Many Americans re- 
gard the Latin American republics as extremely undeveloped. 
This is only partially true, for while there is a far greater per- 
centage of illiterates such as the peon classes, the development of 
the better educated and well-to-do classes is akin to that of the 
United States. The heaviest American advertisers in Latin Amer- 
ica at the present time are the patent medicine manufacturers. By 
the use, not only of newspapers but of street cars, almanacs, and 
the other mediums usually employed, many have succeeded in 
building up a considerable business. In advertising in the Latin 
American republics, the class to whom the appeal is to be directed 
must be carefully considered. Most of the articles that are im- 
ported are used exclusively by the upper or educated classes, which, 
generally speaking, form but a small proportion of the popu- 
lation. 

Other Requisites to Success in Advertising. — ^^Some American 
merchants desire to take a ^^short cut" in establishing a Latin 
American trade and seek to accomplish their purpose by adver- 
tising campaigns. Such campaigns have been successful and can 
be utilized. However, a campaign of any magnitude, particularly 
one addressed to the ultimate consumer, must be based on a serious 
consideration of the factors on which are based the essentials of 
advertising success in the United States. These are: (a) definite- 
sales possibilities ; (b) distribution; (c) a thoroughly efficient plan ; 
(d) dealers' cooperation. 

What to Avoid in Latin American Advertising. — In the prepara- 
tion of advertising matter there are certain essentials which must 
be observed. They are so vital that the success or failure of an 
advertisement may be determined thereby. American ideas, 
phraseology, and above all, slang phrases and strange or misleading 
words should be studiously avoided. A translator should be in- 
structed to render his version in such a manner that the adver- 
tisement may be easily intelligible. Translations made literally 



ADVERTISING IN LATIN AMERICA 265 

from the English into the Spanish or Portuguese will fail of re- 
sults; therefore the wording, arrangement, and translation are as 
important as, if not more so than, the choice of the medium in 
which the advertisement appears. 

The Importance of Technical Translations. — The manufacturer 
who contemplates building a business with the Latin American 
republics should find no detail too insignificant for attention. It 
has been a marked feature of much American publicity that busi- 
ness men who otherwise were perfectly willing to pursue a liberal 
policy in the development of export trade, in the matter of their 
translations were inclined to niggardliness. 

How Technical Translations Should Be Made. — ^It is not only 
essential that translation s shoul j b^ ^flmTnafirfll but that the 
technical phrases should be those tha t can be understood by Latin 
A merican buyer s. Technical dictionaries areTisted on page 46^7" 

The development of commerce, especially in manufactured arti- 
cles, implements, and machinery of highly scientific nature, makes 
it essential that care should be taken; this is particularly true 
where it is necessary to give instructions for the setting up or the 
operation of machinery that is shipped in parts. 
""" Technical Translator Requires Freedom. — As the most pains- 
taking technical translator frequently is unable to find in any dic- 
tionary the proper words for parts which have lately come into 
use, he should be allowed the utmost freedom to express himself 
so that his meaning will be intelligible to anyone. Under no cir- 
cumstances should such translations be made hurriedly or care- 
lessly for the purpose of merely getting the work done, as the 
investment of money in a highly efficient catalog will frequently 
pay for itself many fold. The translator should preferably have 
a knowledge of the art, science, or industry for which he is trans- 
lating. He should be urged to visit the shop or factory where 
the machines are made or are in operation that he may see the 
purpose of the various parts and the complete mechanism. By 
painstaking, earnest cooperation between workmen, salesmen, and 
translator, the most highly involved machine can be made thor- 
oughly understandable to a novice. 

The Payment of Technical Translators. — The greatest drawback 
to the employment of technical experts is the expense, and here 
again is extreme economy unwise. The business man must realize 



266 EXPORTING TO LATIN" AMERICA 

that in the acquirement of his knowledge the translator has spent 
time and effort and should be paid accordingly. 

Technical translations should always be carefully checked and 
the manufacturer should invariably insist, before the printing of 
a technical catalog, on submitting it to correspondents in various 
cities of Latin America for approval. The expenditure of two or 
three months' time for this purpose will have good results and he 
will be able to proceed far more vigorously with an intelligent sell- 
ing campaign if assured that his literature is of the right sort. 

How Technical Translators May Be Employed. — If a technical 
translator is not available in the city where the manufacturer is 
located, he can easily arrange to have his work done in New York 
where there are numerous excellent translation bureaus. By read- 
ing the advertisements in the export trade journals he will find 
the addresses of expert translators; with the leading export jour- 
nals he can also make satisfactory arrangements. The latter, by 
reason of their volume of business, are able to employ men of 
ability and the results are almost certain to be satisfactory since 
they are continually engaged in translating the advertisements of 
technical articles which are advertised in the columns of their 
journals. 

Even though the manufacturer is a member of a business or- 
ganization equipped with a translation bureau, he should be very 
careful to ascertain that its translator is not merely a clerk with 
a superficial knowledge of Spanish and of technical matters, €lse 
results are likely to be unsatisfactory. 

The names of export journals will be found on page 495. 

The Cost of Translations. — Manufacturers who insist upon the 
utmost efficiency should not pursue a niggardly policy in the mat- 
ter of paying for their translations; the cost of having letters or 
other translations made varies materially. In some instances trans- 
lators are willing to translate short letters for 10 cents or 15 cents 
per letter; in other instances 25 cents is charged. A higher charge 
is usually made for translating English letters into the language 
of the country from which the letter comes. The translations of 
the ordinary business communications from Spanish or Portuguese 
into English varies from 25 cents to 35 cents for 100 words, and 
from English into these tongues from 25 cents to 45 cents. The 
copy of technical translations is naturally much higher, Incom- 



ADVERTISING IK LATIN AMERICA tel 

petent translators may make lower rates but they should be 
avoided. 

Character of Export Papers. — The growth of North American 
exports to the southern republics is due in no small degree to 
export journals. Exports have not only been due solely to the 
fact that orders followed the publication of advertisements in these 
journals, but to the efforts made by their publishers to interest 
American business men in the possibilities of Latin American trade. 
The modern export paper aids its advertisers by supplying special 
lists of buyers, translations of letters, preparation of advertising 
matter, etc. It supplies credit reports and gives what informa- 
tion is asked in regard to such subjects as shipping facilities, proper 
methods of packing, financing, etc. 

The Readers of Export Journals. — The export paper has no 
counterpart in the home field. This is due to the fact that its 
readers are far more general than is the case, for instance, with 
trade papers in the United States. An explanation of this con- 
dition may be found in that so many of its subscribers in Latin 
America handle a variety of lines of merchandise or products. 
The importer is very frequently interested in other activities, par- 
ticularly farming, and sometimes small manufacturing enterprises, 
and in those countries where there is mineral wealth his interests 
may extend to the development of mines. Several of the export 
journals appeal more particularly to the owners of large plantations 
or farms, but in this instance also the number of business men in 
general who read them would be far larger than in the case of 
agricultural magazines in the United States. 

Export and Technical Journals in Latin America. — An interest- 
ing feature of Latin American trade development has been the 
influence of export and technical journals. There is no absolutely 
proven means of obtaining foreign trade, and the methods that have 
been followed to achieve success have been as varied as the number 
of manufacturers who have attempted to gain it. It is not strange, 
therefore, that manufacturers in certain branches, particularly of 
specialized articles, have restricted their initial efforts in the Latin 
American fields to advertisements in export journals. This has 
resulted in both success and failure, but the fact that a number 
of such export journals continue to carry the advertisements of 
the same manufacturers for many years in succession indicates 



g6d EXPOETING TO LATIN AMEEICA 

that the merits of this form of advertising have been definitely 
proved. 

American manufacturers who have found it advantageous to 
place advertisements in export journals did so with very definite 
objects in view. They were: (1) general publicity; (2) to obtain 
^^ definite inquiries which might be developed intoord'ers. The 
effectiveness of advertising for general publicity cannot be doubted. 
The advantages to the manufacturer of an advertisement in such 
journals while trade is being developed are indisputable. In this 
book there is no place for the discussion of the principles of adver- 
tising except as they apply to Latin American trade conditions. 
Therefore, it will suffice to say that the c onstant appearance of the 
manufacturer's name in journals circulated in Latin America 
"^ proves of bot h direct and mcLirect value . " -"*" 

The Various Types of Export Journals. — In discussing this prob- 
lem the various kinds of export journals must be considered. Gen- 
erally speaking, they may be divided into four classes as follows : 

1. Journals devoted exclusively to commercial matters and con- 
taining articles which make an appeal to the Latin American 
dealers or importers. 

2. Journals that are intended for circulation largely among agri- 
culturists. 

3. Journals partaking of the nature of magazines, contain- 
ing literary articles, etc., and with the principal appeal to the 
consumer. 

4. Technical papers circulated exclusively among the buyers of 
a particular trade or profession. 

In considering the advertising value of these various mediums, 
the uses of the last mentioned are obvious. To appreciate fully 
the principle underlying the distribution of the first three it is 
necessary to note the difference between conditions in the United 
States and those in the Latin American countries. Generally 
speaking, the lines of division are not so strongly drawn as in 
the domestic field. To a far greater extent than in this country 
the importer will be interested in various industries, and as 
the number of journals received in the Latin American countries 
does not approximate that of the United States, an export paper 
would have a greater number of general readers than would a 
paper of the same nature in the American field. Because of this 



ADVERTISING IN LATIN AMERICA 269 

fact, a number of the heaviest and most persistent advertisers, 
whose advertisements are ostensibly directed to dealers, make a 
very strong appeal to consumers. Inquiries from the latter class 
are used for the purpose of obtaining agents in places where no 
selling arrangements exist. 

How to Determine the Values. — An appropriation for advertis- 
ing in Latin America must be governed by the same principles 
that govern similar expenditures for the home market. The ad- 
vertiser should insist on definite information on the following 
points : 

1. Proof of circulation. 

2. Analysis of distribution. By this is meant obtaining defi- 
nite facts and figures relative to the users of his product among 
the readers of the publication. 

3. The cost of obtaining inquiries. 

4. The percentage of inquiries that result in business. 
Unless an appropriation is made with this fact clearly in mind, 

loss or waste is likely to result. Many swindles have been perpe- 
trated under the guise of journals published to foster trade with 
Latin America. Either the paper has no circulation or the facts 
regarding it were distorted and misstated. 

An export journal which may have been productive of great 
results for the manufacturer of hardware specialties may be a 
flat failure as a producer of business for a clothing specialty. The 
principles of efficiency as applied to advertising in general should 
be used in judging the advertising value of export papers. 

The Use of a Test Key.-— Advertisements inserted in export jour- 
nals must be carefully keyed. This is particularly essential when 
direct orders or inquiries are expected and when advertisements 
are placed in more than one paper. It is also desirable, in adver- 
tising certain lines in which the use of a catalog is essential, and 
when it is desired to avoid a loss of time, to announce in the adver- 
tisement that the catalog of the advertiser may be consulted in 
all American consulates. In this manner, merchants who are in 
immediate need of the article may easily find the catalog and avoid 
the delay of correspondence. 

How the Value of an Export Journal Is determined. — When 
direct inquiries are essential, a careful report must be kept that 
the cost of each in(][uiry may be definitely determined, Iii studying 



270 EXPORTING TO LATIN AMERICA 

the possibilities of the various journals it is desirable to consider 
certain facts. These are as follows: 

1. The relation of the article advertised to the character of 
the publication. 

2. The number of possible buyers among its subscribers or 
readers. 

3. The cost of the advertisement in relation to its circulation 
and possible interested persons. 

After an advertisement has appeared, the results can be meas- 
ured vrith almost absolute accuracy by the use of the key. 

A Proof of Circulation Imperative. — The alert manufacturer 
should subject all claims of circulation, etc., to the most rigid in- 
vestigation. This should apply not only to the number of copies 
circulated but also to the character of subscribers, the country in 
which the publication appears, etc. This is essential because of 
the possibility of a large waste circulation in the sale of certain 
articles. As a concrete example may be cited merchandise which 
is subject to climatic conditions. Articles which would sell ex- 
clusively in the temperate zone and would be too warm for use 
in the tropics would thus appeal only to those merchants or con- 
sumers in Latin America who are located at such an altitude 
or at such a degree of latitude that they would be interested. 
Merchants or consumers located in those places having a tropical 
climate would represent so much waste circulation. 

Other Factors in Advertising. — In considering advertising in 
either an export or technical journal, several conditions must be 
considered when studying circulation. These are: (1) unfavor- 
able tariffs; (2) inaccessibility; (3) competitive articles. In 
some countries such tariffs are in effect that the importations of 
certain products are impossible; in others, even though the tariff 
may be favorable, local or foreign competition may make a sale 
out of the question; and in still other countries, the subscribers 
to a journal may be located in such remote places that they may 
be quite negligible. In judging the value of journals severe tests 
must be applied, for by a careful analysis of the facts the manu- 
facturer may learn that journals with a much smaller circulation 
in reality are often better adapted to his needs and will produce 
inquiries or orders at a lower individual cost than other publi- 
cations. 



ADVERTISING IN LATIN AMERICA ^11 

The Value of Advertisements in Trade Journals. — Success in the 
use of trade journals by some advertisers has been based on the 
following reasons: 

1. The general publicity was linked with its sales campaigns 
and contributed to the success of the latter. This was due to the 
fact that the buyer in Latin America placed a higher valuation 
on the catalogs, letters, and circulars received from the American 
manufacturer because the latter's advertisements appeared in re- 
liable export papers of wide circulation. 

2. The definite inquiries which were thus obtained were devel- 
oped into orders. 

Obtaining Greatest Efficiency. — The merchants and manufac- 
turers who have been most successful in the use of export jour- 
nals have found it desirable to employ them in connection with 
other means of obtaining trade. They have often been the means 
of hastening the introduction of an article which it has been sought 
to introduce into Latin American countries. However, the export 
paper alone, as all other methods of selling, should never be de- 
pended upon exclusively to develop a trade with Latin America. 
On page 495 will be found a list of the principal export journals of 
the United States, together with their circulation, advertising 
rates, etc. 

Technical Papers and Their Use. — The increase of export trade 
with Latin America makes specializing more essential. As a result 
there are now being published export editions of trade journals 
devoted to certain particular industries. Examples of this kind 
of trade journal are found in the mining industry, hardware, dry 
goods, clothing, shoes, etc. The principles applicable to the plac- 
ing of an advertisement in these journals, both as regards character 
and circulation, are the same as with export papers. In the case 
of certain industries, no matter what may be the circulation in 
a particular country it may be considered absolute waste, because 
of the impossibility of overcoming tariff restrictions and com- 
petitive or local conditions. As a concrete example may be cited 
the circulation of a shoe and leather journal in the republic of 
Salvador. Shoe manufacturers whose advertisements appeared 
in such a journal would find the percentage of waste in direct pro- 
portion to the circulation in that country, because of the impos- 
sibility of selling imported footwear in that republic. On the 



2^2 EXPORTING TO LATIN AMEBICA 

other hand, manufacturers of leather, machinery, findings, etc., 
could count definitely upon the circulation in Salvador, as in also 
practically every other Latin American country, because they are 
not handicapped as are the manufacturers of shoes who must cal- 
culate both with regard to tariff and local competitive conditions. 

The Use of Advertising to Open Accounts. — Many American 
business men wish to duplicate North American successes in the 
quick establishment of relations and in the opening of accounts, 
but they must act with much caution. Conditions are quite dif- 
ferent in Latin America and, as has already been pointed out, 
the extreme conservatism of the people will at all times make 
necessary an ample modification of a well considered plan. If prop- 
erly conceived and executed with the advice and guidance of a 
reliable agency, a selling campaign may be effective, but frequently 
it will be found desirable first to obtain partial distribution and, 
in connection with such distribution, plan a campaign of pub- 
licity to increase the demand. 

The use of newspapers will often prove highly successful in 
assisting local agents to obtain a greater sale. But again, the 
expenditure should not be made at long range since experts with 
a thorough knowledge of local conditions can more intelligently 
do this work than it could possibly be directed from the United 
States. 

Effective Advertisements in Export Journals. — When advertise- 
ments are inserted in export trade papers they must be prepared 
with even greater care than is accorded similar advertising in the 
United States. The necessity for frequent changes, both of copy 
and illustrations, is imperative, and any space, no matter what 
the size, should be used in the most intelligent and scientific man- 
ner. A rational use of ^'^reason why'' argpiment s, in addition to 
good illustrations and effective translation, will be productive of 
results, when the mere insertion of a firm's name or an inade- 
quate advertisement will result in failure. A prime essential is to 
win the buyer's confidence and this cannot be done when sensa- 
tional or extravagant statements are made. Facts relating to the 
selling points of articles advertised should be strongly emphasized. 
The profits either in the sale or in the utility of an article are of 
far greater interest to the importer than the photograph of the 
large factory in which the articles are manufactured. 



ADVERTISING IN LATIN AMERICA g^S 

The Necessity for Frequent Kepetition. — The success of an ad- 
vertising campaign, particularly if well planned and persistently 
and intelligently executed in connection with a proper system of 
follow-up, is almost certain. On the other hand, scattered or in- 
frequent advertisements in export journals should never be used. 
The occasional insertion of an advertisement is almost certain to 
result in loss. This has been so thoroughly established that some 
export papers refuse to accept contracts for advertisements unless 
for a definite length of time (the minimum usually six months), 
that their value may be thoroughly established. Even the repeti- 
tion may prove useless unless the copy is effective, for most Latin 
American dealers are very conservative, and it is unreasonable to 
expect that satisfactory connections will be broken by them because 
of the occasional advertisement of similar merchandise in an 
export paper. 

The Use of Inquiries. — When a campaign of advertising in Latin 
America is undertaken, no matter what the medium, all inquiries 
that result should be carefully "nursed'' and referred to local 
or general agents or to traveling salesmen, when it is not feasible 
to employ local agents. The display of interest on the part of an 
inquirer is even more significant than in the United States, and 
if properly handled, such an inquiry may result in a consid- 
erable volume of business. It is of the utmost importance that 
all inquiries be carefully indexed; that is, noted on cards which 
should be kept for quick reference and frequent follow-up. In 
this, as in all Latin American advertising, the value of the corre- 
spondence may be greatly enhanced by proper attention. 

Avoidance of Technical Copy. — In preparing advertisements for 
export journals or local magazines, the copy to be used should be 
that which makes the strongest appeal to reason. Highly involved 
words or technical descriptions such as appear in the trade papers 
of the United States are most likely to prove complete failures in 
Latin America. Before any advertisement is inserted the study 
of competitive advertising or the advertisements inserted by suc- 
cessful makers of similar lines is highly advisable. 

The Use of Local Advertising. — Newspapers in Latin America 
have been used by some of the concerns that have been very suc- 
cessful in the Latin American field. Advertisements in Latin 
American newspapers, if intelligently planned and executed, are 



2^4 EXPOBTma TO LATIK AMERICA 

likely to prove more effective than similar advertisements in the 
United States, because of the fact that in Latin America there 
are proportionately fewer newspapers and similar publications. 

The Value of Local Newspapers. — Although in almost all of the 
Latin American republics there is only a limited class who can 
read, a part relatively smaller in proportion to the population than 
in the United States, the newspapers, nevertheless, have been found 
productive of important results. This is due to the fact that, 
with the exception of comparatively few staple articles which are 
imported, the buyers of the principal imports are found among the 
readers of newspapers. 

The Newspapers of liatin America. — In Latin America the dif- 
ference in the character of newspapers is as marked as the variation 
of the daily press of the United States. 

In the capitals, such as Rio de Janeiro and Buenos Aires, for 
example, there are published daily papers which would be a credit 
to any city in the world. There is a notable difference in the 
character of papers published in the different capitals. This is 
easily explained since the percentage of population in cities like 
those mentioned, who read the newspapers, is much greater than 
in the capital of Guatemala where the uneducated proportion of 
the population is much larger. 

Even more marked is the difference between the papers pub- 
lished in the large cities and those in the smaller and remote 
communities where the expense of receiving cablegrams cannot be 
borne; as a result the papers in such places are of but little 
importance. 

Expert Advice Desirable. — As may be reasonably expected, the 
development of advertising in the larger cities, such as Santiago 
(Chile), Lima (Peru), Rio de Janeiro, Buenos Aires, Montevideo, 
and Havana, has resulted in the establishment of advertising agen- 
cies. These agencies concern themselves with all forms of pub- 
licity, including newspapers, street cars, billboards, moving pictures, 
etc. No advertising campaign of any moment should be under- 
taken without obtaining the advice of the experts who devote them- 
selves exclusively to this field. For the manufacturer to plan 
expenditures from his North American office without a thorough 
knowledge of local conditions is likely to prove disastrous even 
though he is guided by the local or general salesman, or an im- 



ADVERTISING IN LATIN AMERICA 275 

porting jobber. The latter individuals may base their conclusions 
on erroneous opinions and, although the advice of all who would 
be interested in the campaign should be sought, no important 
publicity campaign should be undertaken without the assistance 
of experienced advertising men. This caution applies with equal 
force to agencies in the different countries, as a firm with a thor- 
ough knowledge of the Argentine cannot be expected to know local 
conditions in Chile, nor can a Brazilian firm advise properly re- 
garding an expenditure in Uruguay. 

Contracting for Local Advertising. — Favorable advertising con- 
tracts can more easily be made by experts than by inexperienced 
bu-siness men, especially in view of the instability in rates and the 
variations in discounts. The development of an advertising cam- 
paign in Latin America should not, however, be left to the attention 
of an American advertising agency, no matter how successful, 
unless it likewise possesses a detailed knowledge of Latin American 
conditions. This includes not only a knowledge of the languages, 
but of the social life, the climate, and the preparation of advertise- 
ments which make the proper appeal to Latin Americans. 

How to Obtain a Reliable Advertising Agency. — Advertising 
agencies established in Latin America occasionally have corre- 
spondents or branch offices in the United States. By consulting 
the local directories of New York or Chicago the names of such 
agencies may be found. If it is desired to correspond with local 
agencies in the different republics, their names may be obtained as 
follows : 

1. By consulting the directories of the larger cities, such as 
Buenos Aires, Rio de Janeiro, Santiago, etc. 

2. By consulting the trade directories of the Bureau of Do- 
mestic Commerce. 

3. By approaching the branch offices of the Bureau of Foreign 
Commerce or writing direct to Washington. 

4. By making application for the information to the commercial 
organizations. 

The Use of Local Magazines. — The magazine, such as it is gen- 
erally known in the United States, circulates in Latin America 
to a far more limited extent than in the domestic field. The maga- 
zines that enjoy the largest circulation are those published in Spain, 
which are read with great interest because of the numerous de- 



276 EXPORTING TO LATIN AMERICA 

scendants of Spanish people in the Latin American republics. t)f 
a more concentrated circulation and perhaps a larger number of 
readers than the Spanish magazines are those illustrated papers 
which are published in the various republics, particularly in the 
Argentine, Chile, and Peru. Typical papers of this character are : 
La Ilustracion Sud Americana, of Buenos Aires, a journal which is 
issued fortnightly with a circulation of about 15,000; the Fray 
MocliOy a weekly with a circulation of 100,000 ; Caras and Caretas, 
a weekly journal, circulation about 112,000; Zigzag, of Santiago, 
Chile, a weekly publication, circulation 35,000; the Fon Fon, a 
weekly humorous publication of Rio de Janeiro, circulation 50,000. 
These papers, as a rule, publish articles relating to fashion, litera- 
ture, art, humor, etc., and as they circulate among the better 
classes who buy imported wares, they naturally wield considerable 
influence. 

Tlie Names, Circulation, and Rates of Newspapers. — There has 
been published by the Bureau of Foreign Commerce a pamphlet 
which gives the names and circulation of the principal papers in 
Latin America. This publication contains other information of 
value to advertisers, including the width of the columns, the rates, 
and other details that are essential to the preparation of advertise- 
ments. 

How this pamphlet may be obtained is told on page 493 of the 
Appendix. 

The American manufacturer who wishes to advertise can gain a 
perfect idea of the newspapers themselves by writing to the editors 
and asking for sample copies which are gladly forwarded. 

Miscellaneous Journals Relating to South America. — That the 
interest in Latin American affairs is rapidly growing is proved 
by the increasing number of journals published in various cities 
of the United States, and which circulate either in the United 
States or the southern republics. A complete list of such journals 
together with their subscription rates will be found on page 495 of 
the Appendix. 

Advertising Rates and Circulation of Export Journals. — For the 
convenience of students of Latin American trade problems, the 
advertising rates of the export journals which circulate in Latin 
American countries are given on page 498 of the Appendix, to- 
gether with the circulation of these journals, 



CHAPTER XVIII 

THE PARCEL POST AND MAIL ORDER BUSINESS WITH LATIN 

AMERICA 

Introduction. — The extraordinary development of the parcel 
post business in the United States has aroused many business men 
to the possibilities of extending their trade to Latin America. Be- 
cause of the favorable postage rates on parcels to the southern 
republics, a large volume of business is already being done and 
the opportunities there are practically unlimited. 

The Use of the Parcel Post. — Generally speaking, the parcel post 
service is utilized as follows: 

1. By mail order houses which ship merchandise to Americans 
and natives in all the Latin American republics. 

2. By manufacturers and exporters for the purpose of sending 
samples and parcels to merchants or importers. One of the advan- 
tages particularly appreciated by merchants is that goods can be 
imported at the rate of twelve cents per pound in packages weigh- 
ing up to eleven pounds, by very direct mail routes, with almost 
certain delivery, and with only the simplest possible customs 
formalities. 

In some of the countries parcels are delivered immediately upon 
arrival and in others upon several days' notice, which is in sharp 
contrast to the freight clearance through the custom houses, which 
frequently takes much longer. 

Advantages of the Parcel Post — ^Parcels sent by post are n'ot 
burdened with overhead freightlTtor handling charges. As a con- 
sequence, all articles that can possibly be sent under eleven pounds 
limit and of limited dimensions are ordered by mail. In some 
countries entire shipments can thus be imported advantageously 
by a single merchant. In Honduras shipments of 100 or 120 pairs 
of shoes and ten or twelve dozen silk shirts are often received at 
one time. 

Why the Parcel Post Is Valuable to Mail Order Houses. — The 

277 



678 EXPORTmG TO LATIN AMERICA 

parcel post is of such importance to the mail order house because 
it affords the cheapest and quickest means of shipping small arti- 
cles, no charge being made for clearance and only the duty being 
collected. 

A further advantage consists in the fact that the parcels are 
returned in the event that the addressee cannot be found. Par- 
cels may be sent by registered mail and the signature of consignee 
obtained, which is sent to the shipper. 

The Application of the Surtax. — In some countries the importa- 
tions by parcel post have assumed such proportions that a^surtax 
is charged thereon. In Salvador ten per. cent, of the amount of 
the customs and other charges has been added and thus the im- 
porters are regularly paying the stamp and local taxes exacted of 
business firms. In the case of Salvador the minimum amount was 
fixed at 50 centavos (about 45 cents gold). This was done be- 
cause of the great number of complaints made that concerns who 
were not paying the taxes applicable to business houses had been 
importing merchandise by parcel post and thus avoiding the pay- 
ment of charges to the government, causing unfair competition. 

Advantage of the Mail Order Business. — While the growth of the 
mail order business with the Latin American republics has been 
rapid, the American manufacturers have not yet realized its pos- 
sibilities in the great trade fields of the southern countries. Only 
in Mexico previous to the outbreak of the revolutionary disturb- 
ances was the volume of business done commensurate with the 
opportunities. The advantages of the mail order trade at retail 
may be briefly stated as follows: 

1. The business is transacted on practically a cash basis; in 
almost every instance cash accompanies the orders. 

2. The manufacturer can reach consumers in haciendas 
(ranches) and mining camps, likewise in remote or small com- 
munities, for whom the local dealers cannot possibly provide a 
sufficient assortment from which to make selections. 

3. In almost every one of the republics the number of buyers 
in widely scattered points is rapidly increasing. They are often 
foreigners, particularly Americans, with decided prejudices in 
favor of imported products, and are frequently possessed of a 
large buying power because of their incomes as representatives or 
employees of wealthy interests. 



PARCEL POST AND MAIL OEDER BUSINESS 279 

4. The bothersome consular regulations and custom house re- 
quirements which affect importation by freight are avoided in the 
case of parcels sent by mail. 

5. The cost of transportation is very reasonable, particularly be- 
cause customs agents are not needed. 

6. Literature, catalogs, circulars, etc., may be distributed with 
almost no waste if precautions are taken to insure the receipt by 
the proper persons of the matter that is distributed. 

7. As the Latin Americans are very loyal, the mail order busi- 
ness with them can be built to large proportions if care is taken 
to fill orders promptly, and to pack and ship the articles exactly 
as ordered. 

8. The Latin Americans are very much impressed with our 
novelties and articles of a character that make an unusual appeal, 
which can be sold easily by mail. 

Tlie Parcel Post Business with Consumers. — As has already been 
pointed out, a considerable volume of business is already done by 
mail order houses who have sent their catalogs to Americans scat- 
tered throughout Latin America and likewise to the natives from 
whom inquiries for these books have come. It has been the cus- 
tom of many Latin Americans to obtain their wearing apparel 
from European merchants, principally French and English con- 
cerns, and one of the great possibilities of the future lies in the 
control of this business. 

The Parcel Post in Mexico. — Previous i)o the recent political 
disturbances in the republic of Mexico, the parcel post business 
with that republic had assumed quite extraordinary proportions, 
and it is reasonable to believe that as soon as peace has again been 
established, the volume of business will be even greater than be- 
fore. This was due to the large number of Americans who made 
their homes in Mexico, many of them in the isolated mining camps 
and interior points where desirable merchandise was difficult to 
secure. The mail order houses have served a very useful purpose 
in making it possible for Americans so situated to obtain the mer- 
chandise they desired at a reasonable price and with minimum 
effort. In this connection it has been affirmed that one concern 
alone, in the United States, has had in Mexico 13,000 customers 
to whom many thousands of parcels were sent annually by post. 
This firm has done practically all its business with an English 



280 EXPORTING TO LATIN AMERICA 

catalog and its orders could undoubtedly be greatly increased if 
the catalogs and circulars were printed in Spanish or at least 
accompanied by a key in that language. 

The parcel post business has assumed larger proportions in 
Mexico than in any other Latin American country. This applies 
not only to the business with the United States and European mail 
order houses but also with the mail order houses located in Mexico 
City. 

In the other Latin American countries importations by parcel 
post from Europe preponderate and purchases made of the French 
houses are particularly important. 

As an example of this business may be cited Bolivia, in which 
country the large department stores of France, such as the Bon 
Marche, the Galeries Lafayette, the Louvre, and La Samari- 
taine, have built up a large business. This is true also of German 
mail order houses. This is due to the fact that the needs of the 
upper classes cannot be satisfied by the local stores in the matter of 
variety. Furthermore, the profits exacted are extremely high and 
American department stores with well organized mail order de- 
partments, and especially mail order houses in general, would 
unquestionably be able to do a large business were the proper 
effort made. The latter necessarily concerns itself with catalogs 
and price lists in Spanish. The fact that sales can be made to 
individual purchasers in the large cities greatly widens the field 
for those firms whose wares are especially suited to the tastes and 
use of city buyers. 

The objects which lend themselves particularly to sale and de- 
livery by parcel post are those in which the manufacturers of the 
IJnited States excel. Among these may be mentioned cheap 
watches, safety razors, scissors, cutlery, tools, kodaks, sporting 
goods, and Yankee notions in general. Novelties of all sorts are 
also particularly salable by this means as the Latin Americans are 
quick to appreciate and take advantage of modern inventions and 
novelties. 

The Small Manufacturer and the Parcel Post. — Perhaps in no 
other field has the small manufacturer or merchant so great an 
opportunity for the development of business with Latin America 
as in the mail order field. This is due to the fact that the smaller 
dealer, if in a position to offer quality and price equal to the larger 



PAKCEL POST AND MAIL ORDER BUSINESS 281 

firm, will be on an equality with the larger exporter who contem- 
plates a parcel post business. 

How Parcel Post Business May Be Developed. — In order to estab- 
lish a mail order business with Latin America a certain routine 
must be followed. First of all, catalogs must be prepared that 
will win the confidence of the recipient. These must be compiled as 
outlined in Chapter XV. 

The names of possible buyers can be obtained in a number of 
ways: 

1. By advertising in the American export journals which cir- 
culate in the Latin American republics. 

2. By advertisements in magazines published in the different 
Latin American countries. 

3. By advertisements in Latin American daily newspapers. 

4. By the use of directories, the names being selected according 
to professions or classifications in harmony with the business of 
the mail order house. 

5. By various methods known to mail order houses, including 
the offer of prizes for names of interested friends, the inclosure, in 
letters to customers, of blanks on which names of individuals who 
might be interested are solicited, etc. The latter is one of the most 
effective methods in Latin American mail order business. 

The Distribution of Catalogs. — In many of the republics the 
parcel post officials will cooperate with American firms who wish 
to establish a mail order business, by the distribution of their 
catalogs. 

In the case of Chile, for instance, information relative to such 
distribution may be obtained by addressing the American Consul 
at Valparaiso, to whom catalogs and printed matter may be sent 
for delivery to the proper individuals. 

The Aid of Postmasters and Local Officials. — Other sources of 
names for the distribution of retail catalogs are postmasters and 
local officials. Particularly in the smaller communities these offi- 
cials are usually very willing to cooperate with American manu- 
facturers and exporters. Letters properly couched will be found 
invaluable aids. 

The filling of orders exactly according to the illustrations and 
descriptions in the catalog is absolutely essential. The rules re- 
garding nonsubstitution, packing, and attention to details apply 



282 EXPORTING TO LATIN AMERICA 

with even greater force to the mail order business where money is 
gotten in advance, than to shipments of merchandise on open 
account. 

How a Mail Order Business Should Be Started. — As in all trade 
relations with Latin America, the development of a business by 
mail should be gradual. The merchant or manufacturer who 
feels he has possibilities should select, preferably, one or two 
countries in which to make a start. The most detailed record of 
costs should be kept in order that the exact expense of obtaining 
orders may be known. An entire line of merchandise should not 
be illustrated. It is preferable to select a few of the most prom- 
ising items and properly catalog these, rather than to go to a 
large expense which may not be productive of results. Extreme 
caution is advisable. Even though the manufacturer is convinced 
that the sales will be large, experimental mailings should always 
be made. Large editions should not be undertaken until the re- 
sults from a small mailing have been definitely ascertained. 

The confidence of prospective buyers must be won by every dem- 
onstration of good faith. The Latin American, particularly the 
consumer, is extremely conservative and suspicious. For that rea- 
son it is highly important that the catalog and literature should 
bear every evidence of genuineness and reliability. He should be 
convinced of the good will and standing of the house to whom 
he is to send a remittance, else he may hesitate to forward it. 

What a Parcel Post Catalog Should Contain. — In preparing a 
catalog, whether large or small and whether booklet or circular, 
there are certain fundamental rules governing its publication. It 
must be borne in mind that a low selling cost can be insured (in 
other words, profitable sales can only be made), if a sufficient num- 
ber of orders are received. The success of a catalog will be deter- 
mined by the following factors : 

1. That it contains statements which absolutely prove to the 
Latin American consumer the reliability of the house to whom 
remittance is to be made. This can be achieved by the reproduc- 
tion of letters by banks to the effect that the mail order house is 
in good repute and will comply with all the promises made in its 
literature. 

2. That the catalog should also contain reproductions of let- 
ters to the. same effect hj the cp^sular representatives of the Latin 



MRCEL POST AND MAIL ORDER BUSINESS 26^ 

American republics, preferably in the city where the merchant is 
located, which will likewise prove of great value. In the prepara- 
tion of a catalog or circular the best models to follow are those 
of the large and successful mail order institutions of Chicago and 
New York. 

The Illustrations and Descriptions. — The illustrations and de- 
scriptions in mail order catalogs used in Latin America are of 
greater importance than those in the ones circulated in the United 
States. They serve as the only means by which the consumer can 
form an idea of the merchandise that is offered; both therefore 
should be absolutely exact. The terms used should be simple and 
plain; all technical w^ording should be omitted in the translation, 
which should be both accurate and good Spanish. The exact weight 
of every article should be stated and, if possible, the price of the 
item illustrated should include the postage required to carry it. 
Prices should be stated in American gold and, if at all possible, 
with their equivalent in the currency of the country to which the 
catalog is sent. This is hardly practical except when very large 
editions are mailed to the countries in which the currency is on 
a sound basis and not subject to fluctuations. Promptitude in 
filling orders accompanied by cash is absolutely essential in order 
that the suspicion of the consumer may not be aroused. If these 
methods are followed, the possibilities of developing a business with 
Latin America are almost unlimited. 

The Workings of the Parcel Post. — The details in connection 
with shipping packages by parcels post are extremely simple. The 
parcel is carefully prepared. In packing, the same care should be 
taken as in the case of shipments by freight, especially where the 
packages are for interior points and are subject to damage by rain,, 
humidity, or tropical conditions. This is particularly essential 
where parcels are sent to interior points in mail bags carried on 
muleback. These are subject to wetting not only in the torrential 
rains but likewise in the fording of streams. The parcel is taken to 
the post office bearing the requisite postage of twelve cents a pound, 
together with the name and address of the shipper and the address 
of the consignee. Attached to the parcel is a very simple customs 
declaration which takes the place of the invoice. A mailing receipt 
is given by the post office for the parcel and the transaction is 
completed. When shipments are made to Latin American countries 



^84 EXPORTING TO LATIN AMERICA 

where parcels must be carried by steamship it is important that the^ 
be covered by marine insurance since, if steamers sink, the post 
office is not responsible for loss. 

While parcels sent by post are rarely lost, it is nevertheless also 
advisable to insure them against loss and theft, as both occur in 
doing business with Latin America. 

To some countries, as in the case of Venezuela, it is necessary, 
when mailing parcels, to accompany each shipment with three 
copies of a declaration, on which are set forth the name of the 
article, the number of packages and the weight and value. These 
blanks may be obtained in any United States post office. All regu- 
lations relating to the parcel post may be found in the Official 
Postal Guide, which may be purchased in any city or consulted 
at any post office. 

The C. 0. B. Feature. — In certain of the countries, as Chile, for 
example, the American mail order business is not so heavy as it 
might be were the same rules in effect between this country and 
Chile as those which exist between the latter republic and the 
principal countries of Europe. One of these is the c. o. d. feature 
which makes it possible for the purchaser to examine parcels 
before paying for them. The principal European export houses 
make c. o. d. shipments to Chile exacting advance payments of 25 
per cent., which protect them in the event that shipments are re- 
turned or refused. By this means the number of packages returned 
has been greatly reduced. The establishment of a similar service 
would give considerable impetus to American trade, and a large 
business would unquestionably result. Another advantage would 
be that Americaiji firms which are not now making shipments 
to Latin American countries would be enabled to obtain business 
from the conservative buyers in those republics who object to 
making remittances until they can see the merchandise. 

Delivery Charges on Parcel Post Packages. — A factor that must 
be considered in connection with the parcel post business is that 
of the delivery charge. One of the rules of the Mexican postal 
service provides for the collection of a fee on parcels received by 
post from foreign countries. Packages received from the United 
States are assessed more than those from any other country. Th^ 
reason is that a maximum weight (eleven pounds) parcel post 
package from the United States has a Mexican postal charge on it 



PAECEL POST AND MAIL ORDER BUSINESS 285 

of 45 cents Mexican currency, while the charge on the same package 
from England and France is 10 cents, and if from Germany, only 
5 cents. This difference often causes orders to be sent to Europe 
instead of to the United States. From England and France the 
charge is 10 cents Mexican or $0,498 American money per pack- 
age. 

Careful Wrapping and Addressing. — As the mails, like freight 
to Latin America, are often roughly handled, it is absolutely essen- 
tial that every article be securely packed so that it may be properly 
delivered. It is indispensable, however, that it be so wrapped or 
packed that its contents may be easily seen and examined by post- 
masters and custom house officials. No package should ever be 
wrapped in light flimsy paper, or packed in pasteboard boxes, as 
it will not be accepted at a post office. Post office regulations also 
provide that boxes with lids screwed or nailed on may be used, 
and packages may be closed by means of sewing provided they are 
presented to the post office open for inspection. Great care should 
be taken to wrap pracels properly, or they will not be forwarded. 

Necessity for Attention to Packing. — It must be remembered 
that parcels are frequently carried several thousand miles and care 
should be taken that they do not reach destination in a dilapidated 
condition, with consequent loss to contents. Oilcloth or waterproof 
material to protect contents against dampness should invariably 
be used, even when packed inside a strong container. Many Eu- 
ropean exporters employ light wood boxes when mailing parcels, 
and the outside of cloth or oilpaper is frequently sewed, although 
shipments thus made should also be insured to guard against loss. 

The Importance of Measuring and Weighing Parcels. — There 
are certain factors which every exporter who uses the parcel post 
service should take into account. Parcels must always conform in 
dimension, weight, and value to the laws of the country to which 
they are addressed. A parcel not over three feet six inches in 
length may measure as much as two feet six inches in girth, 'or 
round its thickest part; a shorter parcel may be thicker. Thus, 
if it measure three feet in length, it may measure three feet in 
girth or round its thickest part. In the case of parcels for Colom- 
bia and Mexico, the length cannot exceed two feet, no matter how 
small may be the girth, and the girth cannot exceed four feet, no 
matter how short the parcel may be. 



2SC, EXPOETING TO LATIN AMEKICA 

Business in Certain Countries Handicapped. — One of the factors 
which militate against the development of the mail order business 
between some of the republics and the United States is the lack of 
money order agreements, which makes it difficult for purchasers 
to remit. In such cases purchasers often send English sovereigns 
or gold coins of a country of which the currency can be converted 
into American money without too great a loss. 

Another drawback in certain of the republics is the lack of a 
stable exchange. Because of fluctuations it is difficult for the pur- 
chaser to know the rate which will be paid. 

How Exchange Difficulties May Be Overcome. — Some American 
mail order houses specify in their advertisements the rate of ex- 
change at which they will accept the currency of the country. As 
they have previously arranged with agents in New York City for 
this conversion they can do this without fear, although latterly, 
because of the European War, there have been wide fluctuations. 
Another means of overcoming this difficulty is the appointment of 
an agent in one of the principal cities, to whom remittances may 
be made for the credit of the purchaser, and the agent then remits 
the proceeds to the American mail order house. 

Authorized Offices for Importations. — Although parcel post ar- 
rangements are in effect with the countries mentioned, arrange- 
ments for the payment of duty do not extend to every post office 
in these countries. In some of these the duty may be paid only 
in certain offices and it is necessary for the individuals who order 
from abroad to arrange to obtain the importations from such offices. 
This is notably the case in Santo Domingo, but in inland post offices 
where there are no customs houses the receiver must appoint an 
agent to examine the package at the port of entry and to pay .the 
duty before it can be forwarded to destination. The extension of 
this privilege to other places will unquestionably aid materially in 
the development of the parcel post business with the United States. 

Parcel Post to Latin America. — A list of the Latin American 
republics to which parcel post packages may be sent, together with 
the rules governing their sending, will be found on page 525 of the 
Appendix. On page 524 there is also a list of the countries to which 
international money orders may be sent. The parcel post rate is 
twelve cents for each pound or fraction of a pound. 



CHAPTER XIX 

TRADE-MARKS, LAWS AND REGULATIONS IN LATIN AMERICA 

Introduction. — The American "merchant who seeks to establish 
a business in Latin America should bear in mind the value of a 
trade-mark. Most manufacturers who extend their activities to 
the southern countries already have a trade-mark which has possi- 
bly been an important factor in the upbuilding of the domestic 
trade. To such manufacturers, the value of protecting a trade- 
mark even before a new field is entered need not be dwelt upon. 
For the manufacturer who wishes to create a permanent business 
in a Latin American country, a suitable trade-mark is of the 
highest value. 

The Importance of Trade-marks. — Many concerns which began 
to do business in the Latin American field after achieving success 
in the domestic market learned that their trade-mark which was so 
successful at home was entirely inappropriate for the Latin Ameri- 
can field. This also applied to names which had become a by- 
word in the United States, but were absolutely inappropriate in 
the southern republics because of the difficulty of pronouncing 
them. The manufacturer who has never done Latin American 
business possesses therefore a certain advantage in that he can 
profit by the mistakes of others and avoid seriously handicapping 
himself in the efforts for new business. The right trade-mark 
should be selected at the beginning because any campaign under- 
taken must be based on the determination to create a permanent 
demand and money expended in familiarizing the public with the 
trade-mark will not then be lost. 

Qualifications of a Trade-mark. — A trade-mark, to be of the most 
lasting value, should be easily pronounceable. If at all possible, 
it should be a word that has the same significance in English or 
Spanish. Examples of this are found in the success of interna- 
tional brands such as Singer (sewing machines), Oliver (type- 
writers), National (cash registers), Colt (revolvers), Evinrude 

287 



/^: 



288 EXPORTING TO LATIN AMERICA 

(motors). Regal (engines), etc. Words of this character are all 
easily pronounceable in the Spanish fashion. Words in which the 
letters W or K appear should never be used because these letters 
are not found in the Spanish alphabet. 

The Value of the Design and Color.^The greatest need of a 
trade-mark in Latin America is simplicity. This is particularly 
desirable when appeal is to be made to the masses of the people. 
n article of merit which carries a trade-mark is likely to be 
copied by other manufacturers, particularly by European houses; 
hence a pictorial design which has strong individual features should 
be selected. The natives become familiar with such a trade-mark 

I and invariably call for the article with that distinguishing feature. 
The importance of the right brand can easily be appreciated. A 
fish, an animal, a bird or other pictorial design which can be com- 
bined with a name easily pronounceable in Spanish is the best 
combination. 

The Importance of Colors. — ^Vivid or loud colors are the ones 

"Inost appreciated in the Latin American countries. When colors 
are used the color scheme should be a simple one, strongly devised, 
in order that the trade-mark may make a lasting impression. 
Carmine in combination with green, a black with yellow, and a 
blue with white are examples. 

The Featuring of a Trade-mark. — Once the trade-mark has been 
decided upon, its use should be continuous and it should not be 
changed. Even the slightest variation, particularly in color or 
design, arouses the suspicion of the natives, and this is particularly 
the case when an article has had a continuous sale. The trade- 

" mark should be used on all literature, invoices, envelopes, hangers, 
circulars, catalogs, etc. The value of a trade-mark lies in its 
constant repetition and a preliminary campaign of advertising by 
mail has an important effect in educating the dealer. Work of 
this sort possesses unquestioned value in preparing the ground for 
the traveling representative of a new line of goods. 
The Necessity for Registering a Trade-mark. — There are many 

' unscrupulous individuals who wish to take advantage of trade- 
marks to further their own interests. It is for this reason that the 
trade-mark of any product or article on which a large business 
may be built up should be registered. This is particularly so 
in the larger Latin American republics in which the volume of 



LAWS AND REGULATIONS FOR TRABE-MAEKS 289 

business may assume considerable proportions. Many manufac- 
turers who have not taken this into consideration when estab- 
lishing business in Latin America have had to pay dearly for their 
oversight. 

How Trade-marks Are Stolen. — The trade-mark laws of Latin 
America differ materially from those of the United States, and in 
many of the southern republics the one who first registers the 
trade-mark is granted title thereto, no matter if he has no other 
interest therein. The result has been the registration, by unprin- 
cipled Latin Americans, of trade-marks which in many instances 
apply to goods that have not previously been imported, and which 
are registered as a speculation. * 

How Unwary Americans Are Mulcted. — After having obtained 
title of the trade-mark by registration, the trade-mark thief is in a 
position to take advantage of the owner in the event that the latter 
makes shipments to the countries in which the brand has been 
registered. This has frequently been done and manufacturers who 
have not taken the precaution to register their trade-mark found 
to their sorrow that in the eyes of the law they had no right to 
use their own brand and were either compelled to abandon it or to 
buy the rights for its use from the individual who had obtained 
the title. When such unfortunate manufacturers have sought to 
protect their interests they found that the necessary legal action 
was a very costly one and the source of no end of trouble. As the 
trade-mark rights in several of the best fields for American products 
in Latin America are dependent upon registration, it is highly 
essential that registration should not be overlooked or delayed. If 
this is not done, and the brand is registered by a trade-mark thief, 
a seizure of goods bearing the mark may follow their arrival at a 
custom house. Even though a brand may not be looked upon as 
valuable, it should nevertheless be registered if manufacturers 
expect to use it on merchandise shipped to Latin America, else 
difficulties may ensue. 

Importance of Safeguarding the Registration. — ^Before the 
owner gives a power of attorney for the registration of his trade- 
mark, he should make certain that his interests are in the hands 
of a reliable trade-mark specialist fully acquainted with conditions 
and understanding perfectly all the rules and regulations governing 
them. The greatest care should be exercised in selecting an agent 



290 EXPORTING TO LATIN AMERICA 

for the registration of trade-marks, inasmuch as grave conse- 
quences may ensue from misplaced confidence. In signing a power 
of attorney which is given for the purpose of proceeding with the 
work, the manufacturer must make sure that the document grants 
authority only for that specific purpose, and that the trade-mark 
is to be registered in the name of the manufacturer. It is not suffi- 
cient to select a lawyer as in many cases even responsible attorneys 
are incapable of attending to the detail in connection with a trade- 
mark. Unscrupulous agents sometimes obtain power of attorney 
authorizing the registration of the trade-mark in their own name 
rather than in that of the manufacturer. 

Obtaining Reliable Agents for Registration. — ^The best method 
"of obtaining an agent is for a personal representative of the manu- 
facturer to choose and appoint a trade-mark agent or lawyer in 
each of the capitals. This is, of course, not practical except in rare 
cases, but should be done whenever possible. Before making such 
an appointment the advice should be asked of the most reliable 
business men, the banks, the local consuls and other officials. 
Various means may be employed to reach competent specialists who 
can properly serve American manufacturers. Following are some 
of them: 

1. Attorneys or specialists recommended by the Philadelphia 
Commercial Museum, the National Association of Manufacturers, 
the American Exporters' Association, etc. 

2. Firms or lawyers suggested by American Consuls who are 
asked for this information. 

3. Bankers or representative banking firms who may be asked 
to suggest reliable men. 

Local Representatives Desirable. — It is highly desirable that the 
"registration of trade-marks and the obtaining of patents shall be 
arranged by experts on the ground. This is because of the fact 
that many forms must be properly supplied and signed, innumer- 
able details handled, and the work of the registration office ex- 
pedited. In a general way, regulations relative to trade-marks, 
including the description, drawings, and other terms, are similar 
in all the countries, yet there is such a difference that the value of 
expert service in this respect will be appreciated by those who find 
it necessary to register brands. The following table will be of 
interest to those who desire information relative to registration. 



DOCUMENTS REQUIRED FOR REGISTRATION OF TRADE-MARKS* 



Counixy 



Power of Attorney 



Declaration 



Electros 



Fao- 
similes 



Argentina . 
Bolivia . . . . 

N^ Brazil 

Chile 

Colombia . 



Cuba. 



Costa Rica. 



Ecuador . 



Guatemala. 
Honduras. . 



N»l Mexico .... 
Nicaragua. 
Panama 



Paraguay . . , 
Peru 



Santo Do- 
mingo. . . 



Uruguay. . 
Venezuela . 



Signed by applicant before 
notary public legalized 
by Argentine Consul. 

Signed by applicant before 
notary public legalized 
by Bolivian Consul. 

Signed by applicant before 
notary public legalized 
by Brazilian Consul. 

Signed by applicant before 
notary public legalized 
by Chilean Consul. 

Signed by applicant before 
notary public legalized 
by Colombian Consul. 



Signed by applicant before 
notary public legalized 
by Cuban Consul. 

Signed by applicant before 
notary public legalized 
by Costa Rican Consul 

Signed by applicant before 
notary public legalized 
by Ecuadorian Consul. 



Signed by applicant before 
notary public legalized 
by Guatemalan Consul. 

Signed by applicant before 
notary public legalized 
by Honduran Consul. 

Signed by applicant and 
two witnesses. 



Signed by applicant before 
notary public legalized 
by Nicaraguan Consul. 

Signed by applicant before 
notary public legalized 
by Panamanian Consul. 

Signed by applicant before 
notary public legalized 
by Paraguayan Consul. 

Signed by applicant before 
notary public legalized 
by Peruvian Consul. 

Signed by applicant before 
notary public legalized 
by Dominican Consul. 

Signed by applicant before 
notary public legalized 
by Uruguayan Consul. 

Signed by applicant before 
notary public legalized 
by Venezuelan Consul. 



1 not over 2" x 2' 



Certified copy of home 
registration. 



Certified copy of home 
registration legalized 
by Colombian Con 
sial. 

Certified copy of home 
registration legalized 
by Cuban Consul 



Certified copy of home 
registration legalized 
by Ecuadorian Con 
sul. 

Certified copy of home 
registration legalized 
by Guatemalan Con 
sul. 

Certified copy of home 
registration legalized 
by Honduran Consul 



1 not over 2" x 2' 



1 not over 2" x 2 
applicant's name 
and place of 
manufacture. 
1 



12 



20 



12 



12 



Certified copy of home 
registration legalized 
by Panamanian Con- 
sul. 



10 



Certified copy of home 
registration legalized 
by Dominican Con- 
sul. 

Certified copy of home 
registration legalized 
by Uruguayan Con- 
sul. 

Certified copy of home 
registration legalized 
by Venezuelan Con- 
sul. 



not over 2" x 2' 



»From System, October, 1914. 



291 



292 EXPORTING TO LATIN AMERICA 

Important Details Regarding Trade-mark Registration. — The 

following additional information concerning the registration of 
trade-marks in the Latin American republics will be found of 
value. In the case of each republic there are certain formalities 
which must be complied with and these can be supplied by the 
agent to whom the registration of the trade-mark is given. A 
certificate of registration in the country of origin will be found 
valuable. 

Argentina. — Office of registration. — La Direccion de Patentes y 
Marcas, Buenos Aires. 

Duration. — Ten years; renewable.. 

Fees. — Registration in one class, 50 pesos, Argentine currency; 
registration in each additional class, 44 pesos ; renewal, same ; 
extra certificates, each 5 pesos. Registration is essential. Pre- 
vious registration not required. The Argentine law vests rights 
to trade-mark in individual who first registers it. Paper peso = 
$0.4246. 

Bolivia. — Office of registration. — Ministerio de Instruccion Pub- 
lica y Fomento, Notario de Hacienda, La Paz. 

Duration. — Indefinite. 

Fees. — Tax of 5 bolivianos per year. Registration is essential. 
Previous registration not required. The Bolivian law vests right 
to trade-mark in individual who first registers it. Boliviano^ 
$0,389. 

Brazil. — Office of registration. — Junta Commercial, Rio de 
Janeiro. 

Duration. — Fifteen years; renewable. 

Fees. — Registration, 5 milreis in stamps; renewal, same. Regis- 
tration essential. Previous registration not required. The Brazil- 
ian law vests rights to trade-mark in individual who first registers 
it. If trade-mark has been previously used later registration is 
void. Paper milreis, fluctuating, worth about $0.25. 

Chile. — Office of registration. — Sociedad Nacional de Agricul- 
tura, Santiago.^ 

Duration. — Ten years; renewable. 

Fees. — Ma/rca de fahrica (trade-mark), 12 pesos; marca comer- 
cial (dealer's mark), 3 pesos; renewal, same as for registration; 
certificates, 1 peso. Registration is not essential but desirable. 
Previous registration not required. The Chilean law vests rights to 



LAWS AHD REGULATIONS FOR TRADE-MARKS 29^ 

trade-mark in individual who first registers it. Paper peso, fluc- 
tuating, now worth about $0.16. 

Colombia. — Office of registration. — Despacho de Hacienda, Bo- 
gota. 

Duration. — Twenty years ; renewable. 

Fees. — Registration of mark, 15 dollars; renewal, 30 dollars. 
Registration is essential. Previous registration is required. The 
Colombian law vests rights to trade-mark in individual who first 
registers it. Gold dollar=r$l. 

Costa Rica. — Office of registration. — Secretaria de Fomento, San 
Jose. 

Duration. — Fifteen years; renewable for periods of 10 years. 

Fees. — The following stamp taxes are provided for in connection 
with the registration of trade-marks: Each copy of the model of 
the mark, 5 colones; certificate of inscription, 2 colones; inscrip- 
tion, 5 colones. Registration not essential but desirable. Previous 
registration not required. The Costa Rican law vests rights to 
trade-mark to any using it. Colon:=$0.465. 

Cuba. — Office of registration. — Secretaria de Agricultura, Indus- 
tria, Comercio, y Obras Publicas, Habana. 

Duration. — Fifteen years; renewable. 

Fees. — Registration, $12.50; renewal, same. 

Registration not essential but desirable. Previous registration 
is required. The Cuban law vests right to trade-mark to individual 
who first registers it. 

Ecuador. — Office of registration. — Ministerio de Hacienda, 
Quito. 

Duration. — Twenty years; renewable for periods of 15 years. 

Fees. — Registration, 25 sucres; publication, 12 sucres; stamped 
paper, 2.40 sucres; total, 39.40 sucres. Renewal, same, except that 
no publication is required. Registration is desirable but not essen- 
tial. Not necessary to have been previously registered. Right to 
trade-mark is vested in individual first registering it. No legal 
proceedings can be instituted prior to registration of trade-mark, 
in case infringement is attempted. Sucre=$0.487. 

Gv/itemala. — Office of registration. — Secretaria de Estado en el 
Despacho de Fomento, Oficina de Marcas, Guatemala. 

Duration. — Ten years; renewable. 

Fees. — Registration and certificate, 30 pesos; additional copies 



^94 Exporting to latin aMeeica 

of certificate, 5 pesos; publication, 50 pesos; authentications 
(usually two), each, $3 gold. Not essential to register trade-mark, 
but desirable. Necessary to have been previously registered. Gua- 
temalan law vests right to trade-mark in any individual applying 
for it. Paper peso, fluctuating, about $0,025. 

Honduras, — Office of registration. — Secretaria de Fomento, Te- 
gucigalpa. 

Duration. — Indefinite. 

Fees. — None provided by law. Translation, publication, and 
stamps about $35 gold. Registration not essential but desirable. 
Necessary to have been previously registered. Individual first us- 
ing trade-mark obtains right thereto. If trade-mark has been 
previously used, later registration void. Peso=$0.363. 

Mexico. — Office of registration. — Secretaria de Estado y del 
Despacho de Fomento, Colonizacion, e Industria; Oficina de Pa- 
tentes y Marcas, Mexico City. 

Duration. — Twenty years; renewable. 

Fees. — Registration, 5 pesos; renewal, same. Desirable to regis- 
ter but not essential. Not necessary to have been previously regis- 
tered. The Mexican law vests right to trade-mark to individual 
owning it. No legal proceedings can be instituted prior to regis- 
tration of trade-mark in case infringement is attempted. Gold 
peso=:$0.498. 

Nicaragua. — Office of registration. — Ministerio de Fomento, 
Managua. 

Duration. — Ten years; renewable. 

Fees. — Registration, 25 pesos; renewal, same; certificates, 1 peso. 
It is essential to register trade-mark. Not necessary to have been 
previously registered. Nicaraguan law vests right to trade-mark- 
in individual first applying for it. Peso=:$0.08. 

Panama. — Office of registration. — Secretaria de Fomento, Ramo 
de Patentes y Marcas, Panama. 

Duration. — Ten years; renewable. 

Fees. — Registration, 25 balboas; renewal, 20 balboas; for articles 
of domestic manufacture or production the fees are one-half the 
above. Registration not essential but desirable. Necessary to have 
been previously registered. Right to trade-mark is vested in any 
individual using it. If trade-mark has been previously used, later 
registration is void. Balboa=$l. 



LAWS AND REGULATIONS FOR TRADE-MARKS 295 

Paraguay. — Office of registration. — ^Junta de Credito Publico, 
Asuncion. 

Duration. — Ten years; renewable. 

Fees. — Registration of marks of foreign origin, 20 pesos gold; 
of domestic origin, 50 pesos currency; each extra certificate, 20 
pesos currency, with 1-peso stamp on first page, 0.25 peso on each 
additional page; renewal, same as registration. Essential to regis- 
ter trade-mark. Previous registration not necessary. Right to 
trade-mark is vested in individual first applying for same. Gold 
peso^$0.965; paper peso=about $0,062. 

Peru. — Office of registration. — Ministerio de Fomento, Lima, or 
any Peruvian consulate general. 

Duration. — Ten years; renewable. 

Fees. — Federal registration fee, 25 soles; publication of notices, 

4 soles; stamped paper, 1.20 soles if registered with a Peruvian 
consul; if registered in Peru the fees are higher. Stamped paper, 
0.10 to 0.40 sol per sheet. Registration is essential. Not necessary 
to have been previously registered. Any individual using trade- 
mark becomes owner. Sol=l-10 pound sterling=$0.4866. 

Salvador. — Office of registration. — Oficina de Patentes, San Sal- 
vador. 

Duration. — Twenty years; renewable. 

Fees. — Registration of foreign marks, 10 pesos; domestic marks, 

5 pesos; annual tax on foreign marks, 5 pesos; domestic marks, 
2 pesos; extra certificates, 5 pesos; publication, not over 5 pesos; 
stamped paper, 0.10 to 0.25 peso per sheet. Ordinary paper may 
be used with stamps affixed. Registration not essential but desir- 
able. Previous registration is necessary. Right to trade-mark is 
vested in individual first using it. No legal proceedings can be 
instituted prior to registration of trade-mark in case infringement 
attempted. Peso=$0.363. 

Santo Domingo. — Office of registration. — Ministerio de Fomento 
y Obras Publicas. Santo Domingo. 

Duration. — Ten to twenty years; renewable. 

Fees. — Registration for 10 years, 5 dollars; 15 years, 10 dollars; 
20 years, 15 dollars; renewal, same. Registration desirable but not 
essential. It is necessary to have been previously registered. Right 
to trade-mark is vested in individual first using it. 

Uruguay. — Office of registration. — Ministerio de Industrias, Tra- 



296 EXPOKTING TO LATIN AMERICA 

bajo, e Instruccion Publica; Oficina de Marcas de Fabrica, Monte- 
video. 

Duration. — Ten years; renewable. 

Fees. — ^Registration, 10 pesos; renewal, 25 pesos; extra cer- 
tificates, 2 pesos. Registration is essential. Previous registration 
is necessary. Uruguayan law vests right to trade-mark in individ- 
ual first applying for it. No legal proceedings can be instituted 
prior to registration of trade-mark in case infringement is at- 
tempted. Peso=:$1.034. 

Venezuela. — Office of registration. — Ministerio de Fomento, 
Ramo de Privilegio © Patentes de Industrias, Caracas. 

Duration. — Thirty years; renewable. 

Fee. — Seal and stamp for application, 1.50 bolivares; seal and 
stamp for certificate, 45 bolivares. Registration not essential but 
desirable. Necessary to have been previously registered. Right 
to trade-mark vested in individual first using trade-mark. Bolivar 
3=$0.193. 



t 



CHAPTER XX 

HELPFUL FACTORS IN THE DEVELOPMENT OF LATIN AMERICAN 

BUSINESS 

Introduction. — In the extension of Latin American trade there 
are many factors which influence success or failure and which must 
be given careful consideration in connection with all sales efforts. 
These factors are of such a varied character that in a work of this 
kind only a few can be discussed. Some of the principal ones are: 
attentjiHL^o^details ; the recognition of the influence of foreign 
residents; a study of the needs of labels on packages and con- 
tainers; a knowledge of National holidays; the maintenance of i 
stocks of supplies and parts of machinery, etc. ^— -^--. 

Need of Adaptability. — The keynote to the success achieved by 
those firms who have established the most profitable business in 
Latin America was their adaptability. Almost without exception 
such houses have changed their methods of marketing in accord- 
ance with the customs and conditions which they have found in 
the different republics or sections thereof. They realized the folly 
of applying to the southern countries the same selling plans as 
those which were used in the United States. The purchasing power 
of the different classes, the peasants as well as the well-to-do 
inhabitants, was considered, and the selling campaign arranged to 
meet the facts. 

Need for Competent Direction. — No matter what selling plan 
was adopted, the concerns who have firmly established their busP^~7 
ness have invariably placed in charge of their department a com- 
petent director. In the case of the small manufacturer* whose 
means or volume of business will not permit an elaborate foreign 
department, the necessity for a full knowledge of the needs remains 
the same. Generalities have no place in the consideration of the 
problems of Latin American trade, and specific facts should be 
obtained ; otherwise the experiment may prove costly. The follow- 
ing paragraphs, in which some factors of importance in building 

?9r 



298 EXPOETING TO LATIN AMEEICA 

export trade are considered, will demonstrate the necessity for 
attention to details. 

Nationality a Factor. — ^A factor which is sometimes overlooked 
by the manufacturer who has not thoroughly studied the export 
trade situation is the prejudice of the members of one nationality 
towards those of another. In many communities there are 
colonies of Chinese, Japanese, Syrian, Arabian, and Turkish mer- 
chants, who have established themselves, and by reason of their 
willingness to sell merchandise at very low profits, have gained 
the_ill will of merchants of other nationalities. While in many 

-"^stances merchants of the aforementioned countries are in a very 
strong financial position, the manufacturer who is seeking to estab- 
lish a business in any of the communities where they are engaged 
may find it to his decided disadvantage to place his wares in their 
shops, because of the prejudice against him which such action may 
arouse. 

T — The Need of Local Representation. — In the introduction of 
many products or manufactures, local representation is almost in- 
dispensable. This is particularly true in the case of machinery or 
implements requiring overlooking or technical installation. The 
expert in charge should be thoroughly practical and should be able 
to correct errors and to make demonstrations of uses and processes. 
Such an individual should be supplied with a stock of spare parts 
to replace those that may be lost, damaged, or worn out. 

Maintaining Stocks of Parts. — The necessity for such a depot 
will be readily apparent. It is not reasonable to expect that the 
purchaser of a large piece of agricultural machinery, who is located 
far in the interior, would be willing to wait until a part that breaks 
is obtained from the United States. One of the best and most 

?2=*^ffective arguments that could be advanced by the manufacturer 
who produces machinery, when offering his product to Latin 
Americans, would be his ability to supply parts from a centrally 
located depot, to minimize loss of time. 

f — Numbering Machinery Parts. — The manufacturers of agricul-, 
tural machinery, agricultural engines, electric light plants, sugar 
mills, etc., should number every part. This applies not only to the 

[_ actual machine but to the illustrations thereof in catalogs. The 
reasons are self-evident. The purchasers of machinery frequently 
fijjd it necessary to replace broken or worn parts, and desire tp 



HELJPFUL FACTORS IN BUSINESS DEVELOPMENT 299 

supply such necessities with the least possible " delay. To do so 
requires cabling, if no stock is carried in Latin America, and the 
expense thereof can be minimized if it is possible to telegraph in a 
code with numbers. 

The Finish of Machinery. — Because of foreign competition, par- 
ticularly that of French makers, who are accustomed to finish theiT 
manufactures in a very attractive manner, it is essential that the 
American manufacturer make his machinery as presentable as 
possible. While finish may not add to the strength or efficiency 
of a plant, it makes a very strong appeal to the esthetic sense and 
the importers are desirous of having the machinery reach them 
in attractive condition. Where machines have to be resold, this 
is even more important, as the scarring caused by transportation 
and handling is decidedly to the disadvantage of the buyer. 

The Importance of Attractive Labels. — Not only the intellectual 
life of the Latin American nations has been greatly influenced by 
the French, but many of the articles in most common use, particu- 
larly by the women, bear unmistakable evidence of French influ- 
ence. This is especially true of labels, packages, containers, etc. 
The Latin American is quick to grasp the selling value of an" 
article that is attractively presented, and for that reason the 
American manufacturer should study the tastes of the ultimate 
consumer,^and seek in every way possible to gratify them. In 
making an analysis of this important factor, it is indispensable 
that the tariff of the respective countries be taken into consideration 
in order that the sale of an article may not be adversely affected 
by excessive import duties on the package or on the article itself. 

Providing for Climatic Conditions. — The effect of climate is so 
marked that it must be carefully considered. In the sale of certain 
articles — for instance lightweight garments — it is essential that no 
metal be used, inasmuch as the tropical climate, particularly the 
salt breeze, quickly corrodes metal, and garments on which such 
material appears are easily damaged. This applies especially to 
trousers, belts, suspenders, and similar articles. Another example 
is that of enameled ware shipped to the tropics. Ordinary enamel- 
ing will not do and although an increase in the thickness thereof 
may add to the cost of manufacture, this will be compensated by 
the increase in business. Before shipping enameled paper, labels, 
etc., to a warm climate, it should be ascertained if mucilage, glue. 



300 EXPORTING TO LATIN AMERICA 

or other adhesive substances may not be omitted, as articles are 

/ frequently rendered unsalable when this is not done. 
p- Meeting Requirements for Special Sizes.— Notwithstanding the 
fact that arguments regarding higher prices may frequently be 
answered, there are times when it seems highly desirable to make 
some change in manufacture in order that an article may find a 
more ready sale. This is particularly true in the case of products 
which must be packed in a certain manner to meet the require- 

{^^ents of the trade. As a specific instance may be cited the case 
of an importer of canned food products. It was found that because 
of the small wages paid the laborers a package ordinarily retailed 
in the United States at twenty-five cents was too expensive, yet the 
article itself was appreciated and could be sold. By arranging to 
pack this product in cans that could be retailed at five, ten, and 
fifteen cents, a large business resulted. 

Supplying Requirements of Dealers. — A concrete example of the 

"^'necessity for observing the wishes of dealers is afforded in the cotton 
goods trade. Cotton goods in the United States are generally 
quoted in bolts of twenty yards whereas the Latin American pre- 
fers bolts of forty meters or thirty-one feet. In other instances, 
American textile manufacturers reject small orders and will ship 
only bolts of 50 or 60 yards, while European houses supply smaller 
lots which are suitable for the markets in bolts of 20 and 30 
yards. 

Requests for Special Wrapping and Packing. — A strict compli- 

=^nce with requests for special labels or wrapping is indispensable, 
as these are based on conditions of which the American manufac- 
turer has no knowledge. An instance may be cited of a Central 
American importer who had for many years imported candles 
which were wrapped in blue paper. When a shipment came 
wrapped in yellow paper his customers would not buy them until 

(he could exchange the yellow wrapping for blue. 

Tlie Importance of Attractiveness. — In the case of tinned prod- 

t ucts, American brands are much preferred because of quality and 
general merit, yet they do not sell so well as those of other foreign 
countries nor at so high a price, because they lack attractiveness 
in packing. It is highly essential that all packages, including the 
labels, be made the most attractive possible in order to win the 

1 attention of the prospective buyer. In the case of certain manu- 



HELPFUL FACTORS IN BUSINESS DEVELOPMENT 301 

factures, notably chemicals or drugs, it is essential to follow the 
rules of individual republics regarding the labeling, seal, composi- 
tion, etc. Before attempting to do business in a country, the re- 
quirements in this respect should be ascertained and all prepara- 
tions should be made to satisfy them. As a concrete instance may 
be cited the regulations for pharmacies as applicable to patent 
and other medicines in the republic of Venezuela. Such regula- 
tions are not onerous, but they vary, and the success achieved by 
numerous houses which have established a business in Latin Amer- 
ica demonstrates that it is possible to comply and yet do business 
profitably. 

Necessity for Demonstration. — Many manufactured articles^ 
could be successfully introduced in Latin America if the proper 
method were followed. This is often merely a case of demonstra- 
tion. The Latin American, once convinced, is a ready buyer, but ; 
the advantages of an article must be proved to him. Labor-saving 
machinery, appliances, etc., can be sold if this method is followed. 
As an example of the possibilities of the Latin American fields 
may be cited the instance of the Sociedad de Electricidad de Ro- 
sario (the Light and Power Plant of Rosairo, Argentina). This 
organization rented a large store in one of the principal business 
streets of that city and installed an exhibition of the very latest 
electric appliances, many of which had never before been used, and 
by demonstration created a demand for them. A sale for many 
other articles may be created in like manner. 

The Need for Standardizing. — In the development of forei^i 
trade, the necessity for standardizing is daily becoming more im- 
portant. The efforts of trade organizations and government offi- 
cials should be directed towards fixing and maintaining standards 
of all products which are capable of being standardized. In in- I 
numerable instances the failure of the American manufacturer to 
please the Latin American buyer may be attributed to the lack of 
standardization. This resulted from the fact that Latin American 
merchants ordered articles of a certain class, only to be greatly 
disappointed by the receipt of a shipment of entirely different 
character. 

The Importance of Holidays. — The part that holidays play in 
the life of the Latin American people is far greater than in the 
T^nit^d States, Not alone National but State and Church holidays ) 



302 EXPORTIN^G TO LATIN AMERICA 

are -universally celebrated and the observance of Saints' days, birth- 
days, and other anniversaries is very common. So serious has the 
'""problem of holidays become in many of the countries that strong 
efforts are being made by the business interests to restrict the 
number and character of the celebrations. 

p - How to Use Holidays. — Holidays may be turned to good account 
in correspondence and in the preparation of advertising matter. 
This may be done by using them as a pretext for letters and 
traveling representatives may take advantage thereof for the pur- 
pose of sending cards and greetings, which are always appreciated 
tby the Latin Americans. The exchange of greetings at New Year's 
is very common, while the celebration of Christmas also affords 
an opportunity for messages of good will. Advertising matter may 
be prepared with National holidays as the motive, and letters can 
often be made more intimate by expressions regarding such occa- 
sions. The lists of the holidays of the Latin American republics 
are obtainable from the Consulates General of the republics, in 
New York City. The more important National celebrations are 
outlined on page 303. 

The Principal National Holidays in Latin America, — The im- 
portance of recognizing the effect of holidays on Latin American 
trade has already been referred to. The celebrations commemorate 
various events. In some of the republics it is the custom to cele- 
brate the day of the country's Patron Saint. In addition the reli- 
gious holidays of the Catholics are widely observed, notably. Holy 
Thursday, Good Friday, Easter, All Saints' Day, Christmas, and 
Corpus Christi, and on these days business is completely sus- 
pended. In almost all of the republics are celebrated the birth- 
days of the patriots who are held in especial reverence and honor. 
Other purely local anniversaries are also celebrated, but there are 
certain National holidays which are of transcendent importance. 
The latter have been briefly outlined below: 

Argentina. — May 25. To commemorate the date on which the 
Spanish Viceroy, Cisneros, was deposed, 1810. 

July 9. To celebrate the Declaration of Independence from 
Spain, 1816. 

Bolivia. — August 6. To commemorate the Battle of Junin, 
1824, and the adoption of the National Declaration of In- 
dependence, 



HELPFIJL FACTORS IN BUSINESS DEVELOPMENT 303 

Brazil. — January 1. New Year's Day. A general celebration of 
the new year. 

February 24. To commemorate the vote on the constitution. 

April 21. Celebration in memory of the leader of the republic. 

May 3. Celebration of the discovery of Brazil. 

May 13. Festival to commemorate the freeing of the slaves. 

July 14. Jubilee celebration of the republic, commemorating 
the independence and liberation of the American people. 

September 7. To commemorate the Declaration of Independ- 
ence from Portugal, 1822. 

November 2. All Souls' Day. 

November 15. To commemorate the change from constitutional 
empire to a republic, 1889. 

Chile. — September 18. To commemorate the date when the 
Spanish Captain General was deposed, 1810. 

Colombia. — July 20. To commemorate the inauguration* of the 
struggle for independence. 

August 7. Celebration of the anniversary of the Battle of 
Boyaca. 

October 28. Celebration of the birthday of Simon Bolivar. 

Cuba. — February 24. To celebrate the date of Cuban inde- 
pendence. 

Costa Rica. — September 15. To commemorate the independence 
of the republic. 

May 1. Commemoration of the repulse of the Filibusters. 

October 12. To celebrate the discovery of America. 

Dominican Republic. — February 17. National celebration. 

August 16. National holiday. 

Ecuador. — August 10. To celebrate the Proclamation of Inde- 
pendence. 

October 9. Commemoration of the Independence of Guayaquil. 

Guatemala. — March 15. To commemorate the accession of the 
President. 

June 30. Celebration of the anniversary of the triumph of the 
Liberal Ee volution, 1871. 

September 15. Independence Day of Central America. 

Haiti. — January 1. To commemorate the culmination of the 
efforts of the islanders for their liberty. 

May 1. The day of agriculture. To commemorate the admin- 



304 EXPORTING TO LATIN AMERICA 

istration of Toussaint L'Ouverture, who induced the natives to 
adopt a farming life in preference to that of the sword. 

Honduras. — September 15. To commemorate the Declaration 
of Independence of Central America. 

Mexico. — May 5. To commemorate the victory of the Mexican 
forces led by General Porfirio Diaz and General Ignacio Zaragoza 
over the French at Puebla. 

September 15. To commemorate the beginning of the struggle 
for freedom and the Declaration of Independence. 

February 5. Celebration of the anniversary of the publication 
of the constitution. 

Nicaragua. — September I5. To commemorate Independence 
Day. The Declaration of Independence of Central America. 

June 1. To commemorate the beginning of the Civil War, 
1893. 

Paraguay. — February 3. San Bias Day. To commemorate the 
miraculous rescue of the Spanish at Corpus Christi from In- 
'dians. 

May 14. To commemorate the independence from Spain, 1811. 

November 25. To commemorate the adoption of the constitu- 
tion, 1870. 

Peru. — July 28. To commemorate the Proclamation of Inde- 
pendence, 1821. 

Salvador. — November 5. To commemorate the first attempt for 
independence, 1811. 

September 15. To commemorate the independence of Central 
America, 1821. 

May 3. Arbor Day. 

April 29. To commemorate the Revolution of Gutierrez, 1874. 

February 3. Festival in commemoration of the Battle of Monte 
Caseros. 

Uruguay. — May 25. Liberation Day. To commemorate the 
deposition of the Spanish Viceroy, 1810. 

May 18. To commemorate the Battle of Las Piedras, 1811. 

April 18-19-20. To commemorate the Crusade of the Thirty- 
Three. Celebrated once every four years, beginning in 1864. 
The principal celebration is held on the nineteenth. 

July 18. To commemorate the adoption of the constitution, 
1830. 



HELPFUL FACTOKS IN BUSINESS DEVELOPMENT 305 

August 25. To commemorate the Declaration of Independence, 
1825. 

Venezuela. — April 19. To commemorate the decisive steps to- 
wards independence, 1810, by the inauguration of a governing 
board. 

June 24. To commemorate the Battle of Carabobo, 1821. 

July 5. To commemorate the independence of Venezuela, 1811. 

October 28. To commemorate the Saint's day of Simon Bolivar. 



CHAPTER XXI 

THE PAN-AMERICAN CANAL. ITS EFFECT ON LATIN AMERICAN 
TRADE. THE PAN-AMERICAN RAILWAY 

Introduction. — The opening of the Pan-American Canal in 
1914 marked the completion of the greatest engineering achieve- 
ment in the history of the world. In the agitation for trade exten- 
sion during the last decade more frequent reference has been made 
to the effect of this waterway than to ^ny other single feature. 
The European War served to increase the interest not only in the 
Canal, but also in the trade possibilities as a direct result of its 
construction. The influence of the Canal has thus been both direct 
or material, and indirect or psychological. 

Psychological Effect. — The indirect or psychological effect has 
been noticeable both in the United States and in South America. 
Its construction has aroused in the United States a greater interest 
\Jn^ Latin America, particularly in the South American republics. 
This interest extended not only to a study of trade possibilities, 
but also to the people, their ideals and customs, their history and 
literature. The discussions regarding the Canal had a very subtle 
influence in awakening a desire in many men of wealth to visit 
the Canal during its construction, in order that they might be 
prepared to take advantage of the opportunities which they expected 
that it would bring. 
r-- The Direct Benefit of the Canal. — One of the direct or material 
benefits which has resulted from the waterway has been a defijiite 
effort made by American manufacturers to obtain a share of Latin 
American trade, and many manufacturers who have previously 
made no effort in this direction are either studying the situation 
or sending representatives for the purpose of soliciting orders. 
The establishment of American banks has already begun and will 
unquestionably be followed by a great extension of banking facili- 
ties. American capital is being invested in numerous enterprises 
such as mining, hydro-electric and irrigation projects, railroads and 

306 



THE PAN-AMERICAN CANAL 307 

plantations. The leading commercial organizations of the United 
States are all seeking the best means of aiding their members in 
Latin American trade extension, and numerous manufacturers are 
employing foreign correspondents and creating export departments. 
In South America the material benefits of the Canal are not yet so 

marked, but some are already noticeable. The actual benefits of - 

the waterway will be largely confined to the six republics in Centrat 
America: Panama, Costa Rica, Nicaragua, Honduras, Salvador, 
Guatemala ; and the republics on the west coast of South America : 
Colombia, Ecuador, Peru, Bolivia, and Chile. These countries will 
be particularly benefited by the reduction of time in steamship 
transportation, but in this respect European lines will be on an 
equality with American vessels. The operation of light draft barges 
from Panama to neighboring ports will unquestionably follow as 
a direct result of the need for more rapid transportation of certain 
products, since the cities of Colon and Balboa (Panama) promise 
eventually to become the greatest transshipping ports in the world. . 
The barges will make it possible to develop trading points where 
today there are no suitable harbors because of the insufficient 
depth of water. " 

Trade Possibilities. — The possibilities of trade development can . 

be realized when one considers that within very easy water com- 
munication of Colon and Balboa there are 15,000,000 people with 
a commerce of $150,000,000 annually. Of this vast total $85,- 
000,000 represents exports, and $65,000,000 imports. This busi- 
ness, already large, will unquestionably show a great increase in the 
next decade and naturally the per capita buying power, which is 
today very low, will also increase. 

The Conditions in General. — The conditions in general on the 

West Coast, geographically speaking, are much inferior to those on 
the east coast. The chief cause for this is the Andes Mountains, 
which occupy a large stretch of territory. The strip between 
these mountains and the Pacific Ocean is, on the whole, very 
narrow, and as a result the direct benefits of the Canal will never 
be as great as would be the case were the conditions on the east 
and west coasts of South America reversed. The agricultural possi- 
bilities of the west coast republics are far inferior to those of 
eastern South America. They are, however, very rich in certain 
resources, notably the nitrates of Chile, the tin of Bolivia, the 



308 EXPORTING TO LATIN AMERICA 

copper of Peru, and the oil ol Peru, Ecuador, and Colombia. Ex- 
ploitation of the latter resources has just begun, but already the 

/ development of the mineral wealth before mentioned has been great. 
Z>T Capital Causes Development. — ^Economists are a unit in the 
opinion that the investment of American capital will result in a 
great development of the republics on the west coast, even though 
all that has been hoped for may not be realized. The direct effect 
of these investments will be reflected in railway construction, which 
will necessitate machinery, hardware, tools, steel, material for con- 
struction purposes — particularly steel and iron — for railways, 
bridges and buildings in general. Machinery of every sort will 
be required, particularly for mining and the extraction of metals. 
The use of small machinery, hardware, tools and implements will 
likewise increase. These will be used for the development of other 
resources, such as mines, plantations, hydro-electric plants and the 
like, for which American machinery and implements will be pre- 
ferred. All these will be transported at a lower rate than was the 
case before the construction of the Canal; and the output of the 
mines, the forests and the soil of these countries will likewise be 

/carried at a lower cost, which will also benefit the producers. 

The Indirect Effect of American Investments. — The investments 

• of American capital will naturally make for the growth of Ameri- 
can trade with the Latin American republics at the expense of 
European exporters. However, as the republics are comparatively 
undeveloped considering their great natural resources, it is not 
reasonable to expect that trade with these countries will grow in 
the same proportion as has the business with the republics of eastern 
South America. One of the great possibilities for the future is 
the increased earning power of the natives which will result from 
the greater demand for labor. The per capita buying power of 
the countries on the west coast in 1930 will be much larger than 
in 1915. It is because of this possibility that the wise manufac- 
turer will seek to plan his efforts in the most intelligent manner 
in order to establish a business on a permanent foundation that 
it may grow in proportion to the development of these countries. 
* ^The Pan-American Railway. — One of the projects of interest to 

'""T^atin Americans is the construction of the Pan-American Railway. 
It was launched by Hon. Jas. G. Blaine, who recognized its enor- 
mous possibilities and who had for advisers in the matter a number 



THE PAK-AMEKICAN CANAL 309 

of prominent railroad men. The Pan-American Railway, when 
finished, will have a length of about 10,000 miles and will be aST" 
intercontinental railway route to connect New York with the 
southernmost point in Chile or Argentina. The number of miles 
already constructed which can be utilized in the development of 
the system approximates 6,500, leaving for construction about 3,500 
miles. Until the outbreak of the Mexican Revolution it was possible 
to make a journey by rail from New York to the northern 
l)oundary of Guatemala, and additional links are already in course 
of construction in many of the countries. 

Cooperation of the Governments. — The various Latin American 
republics have taken a deep interest in the project which has been 
the subject of discussion at the various Pan-American Conferences. 
Its influence upon the development of the United States commerce 
with Latin America cannot be exaggerated. Vast territories will 
be opened to settlement and the regions through which it will pass 
will be greatly benefited. In the construction of the railway, steel 
rails, machinery and tools will be employed, while the investment 
of American capital in the building of the various branches will 
influence the purchase of American manufactures. Commercial' 
organizations should lose no opportunity to agitate the construction 
of the lines already projected and the completion of those under 
way. \^ 



CHAPTER XXII 

RAILROAD AND STEAMSHIP FACILITIES. THE EFFECT OF 
STEAMSHIP RATES ON LATIN AMERICAN COMMERCE 



ntroduction. — One of the topics most frequently touched upon 
in discussing Latin American trade possibilities is the matter of 
transportation. It has often been asserted that there has been a 
serious lack of shipping facilities for the transportation of Ameri- 
can products; that the means of reaching Latin America, par- 
ticularly South America, have been inadequate, and that the foreign 
steamship lines upon which the United States has had to depend 
for the transportation of its products to Latin American countries 
have discriminated against this country in favor of the European 
exporters. Upon analysis it will be found that business with Latin 
America, which had already reached a large volume, had always 
enjoyed good facilities for carriage. It has also been thoroughly 
established that the pioneers in Latin American trade have not 
complained of the lack of shipping facilities ; they have recognized 
that ocean transportation is largely a question of supply and de- 
mand and that if the business were obtained means would always 
be found of transporting the goods. 

Foreign Steamship. Lines. — A large percentage of the shipments 
to the Latin American republics have been carried in foreign 
bottoms. A number of investigations have been made to determine 
whether the charges for transportation favored Europe, but nothing 
has developed to establish the claim that American shippers are 
at a serious disadvantage. 

Steamship Facilities to Latin America. — Until the outbreak of 
the European War, which naturally had a demoralizing effect upon 
transportation and upon all other business, sailings to Latin Ameri- 
can ports were frequent. It has been possible to reach the Latin 
American countries from various ports on the Atlantic seaboard, 
from cities on the Gulf of Mexico, and from Pacific Coast 
ports. 

310 



STEAMSHIP FACILITIES AND FEEIGHT RATES 311 

A rough outline of the steamer service from this country to Latin 
America might be made as follows: 

1. From New York to the northern coast of South America, 
including Colombia and Venezuela. 

2. From New York to the east coast ports, including Amazon 
River ports, to Iquitos, Peru, and to the ports in Brazil, Uruguay, 
and Argentina. 

3. Sailings for west coast ports, either via Cape Horn or Colon 
and Panama, thence west coast steamers ; sailings now direct. 

4. From New York for Cuba, Santo Domingo, Haiti, etc. 

5. From New Orleans for points in Central America, Mexico, 
and north coast South American points. 

6. From New Orleans for west coast points via Colon and Pan- 
ama. 

7. From miscellaneous Gulf ports, including Mobile, Pensacola, 
etc., for Cuba, the West Indies, Central and South America. 

8. From San Francisco for west coast ports of Mexico, Central 
and South America. 

Steamship Lines to Latin America. — In order that the reader 
may realize the extent of the service to Latin America there is 
given on page 516 of the Appendix a list of the steamship lines 
plying to South American ports. There are, of course, many other 
lines to Cuba, Central America, Mexico, etc. 

A Comparison of Freight Rates. — While there are certain linesT' 
of manufacturing which are affected by the ocean freight rates, 
the carriage of numerous products shipped to Latin America is 
almost negligible. In many instances, it has been shown that the 
rates of transporting freight from the United States to Latin / 
American countries favor American manufacturers. As example^ 
of some rates, the following may be quoted: from New York to 
Brazil, a distance of four thousand miles, 15c. per 100 pounds and 
upward; New York to River Plata, about six thousand miles, 16 to 
20c. ; to A^alparaiso, Chile, a distance of about eight thousand miles, 
20c. ; Callao, Peru, about ten thousand miles, 25c. These rates arq 
extremely low and are such that they can compete very easily with 
those of European lines. On manufactures of cotton, the rates to 
Latin America are lower than those of any nation in the world. 
Some examples are as follows: from New York to Havana, 12c., 
plus 2c. extra for lighterage, or a total of 14c. ; from Liverpool it 



312 EXPORTING TO LATIN AMERICA 

is 19 7/lOc. To Callao, Peru, it is 26c. against 40i/^c. from liver- 
pool; to Buenos Aires the rate is lOc, against 24 3/lOc. from 
Liverpool ; to La Guaira, Venezuela, the American rate is 15c. and 
the English 28 9/lOc. 

The Effect of a Lighterage Charge. — One of the items which 
I must be considered in connection with freight rates and in cal- 
culating c. i. f. prices is that of lighterage. While it must be 
taken into consideration, the American manufacturer must realize 
that in competition with other nations he is at no disadvantage by 
reason of lighterage charges, inasmuch as it is an item which must 
[ be paid irrespective of the origin of the shipment. In many places 
there are excellent harbors with splendid wharves where no lighter- 
age charge is made. However, on the west coast of South America 
and Central America there are only a few good harbors; conse- 
quently, at most of these ports, lighterage charges are exacted. As 
an example of such a charge may be cited the following, which is 
typical: In the republic of Chile merchandise is divided into 
ten classes. The lighterage charges run from 75 centavos to 20 
Chilean paper pesos per 100 kilos. This means that a charge of 
$1.78 to $47.40 per ton (2240 pounds) is made for bringing the 
^_^ shipment from the vessel to the custom house. It is a curious fact 
that on certain classes of merchandise the lighterage charge is 
actually in excess of the ocean freight rate for a haul of eight 
or nine thousand miles. 

How to Base Freight Rates. — One of the valuable publications 
of the Bureau of Foreign and Domestic Commerce is a bulletin 
issued for the convenience of shippers. This pamphlet contains a 
series of tables showing the freight rates to New York City from 
the principal inland points in the United States. Ocean freight 
rates are also quoted from New York to Guayaquil, Ecuador; 
Callao and Mollendo, Peru; and to Valparaiso, Chile. Inland 
freight rates from Guayaquil to Quito, Ecuador; Callao to Lima, 
Peru; Mollendo to La Paz; and from Valparaiso to Santiago are 
also given. The rates cover various classes of merchandise, both 
in carload and less than carload lots. Other valuable details are 
the charges for lighterage, transfer, etc., at the port of New York 
and in South American ports. The bulletin is listed among others 
l^qn page 495 of the Appendix. 

How to Obtain Rate Information. — Manufacturers who desire tp 



? 



STEAMSHIP FACILITIES AND FEEIGHT EATES 313 

obtain information relative to rates, sailings, etc., may do so as 
follows : 

1. From railroad agents (foreign commercial agents, particu- 
larly). 

2. From steamship lines at ports of sailing (listed on page 516). 

3. Forwarding freight agents (listed on page 515). 

4. Commercial organizations of which they are members. 

It is highly advisable to obtain all the data possible from as 
many sources as convenient, in order to ascertain not only the lowest 
freight rates, but the correct forwarding. This includes the con- 
signment of the merchandise to the correct pier in New York City, 
the most direct steamship line, the most convenient and direct port 
in Latin America where the best and quickest facilities for im- 
portation and carriage into the interior can be assured. 

A Useful Publication Concerning Railroads. — The student of, 
railroad conditions in Latin America will find valuable aid in a 
book which is listed on page 464 of the Appendix. 



^ 




CHAPTER XXIII 
GOVERNMENTAL ASSISTANCE TO AMERICAN EXPORTERS 

f Introduction, — It is generally recognized that a successful busi- 
/ ness with Latin America depends upon the individual efforts of the 
business man. The measure of success achieved is in direct ratio 
to the care with which markets are studied, the persistence with 
which the business is pursued, and the satisfaction rendered to 
dealers. However, the alert manufacturer who is sincere and con- 
scientious in his efforts to build his business on the right basis can 
find much practical assistance in the service of the United States 
Government for the development of export trade. The services 
available are of such a nature that a vast amount of time and a 
considerable expenditure of money and effort can be avoided if 
the work already done by the scientific observers of the govern- 
ment is utilized in planning efforts to obtain Latin American busi- 
\ ness. This work, which is under the direction of the Chief of the 
bureau of Foreign and Domestic Commerce, Department of Com- 
merce, may be likened to the assistance rendered the farmer by the 
Department of Agriculture. While the appropriation for the work 
of the Bureau of Foreign and Domestic Commerce is still extremely 
limited in proportion to its importance to the business interests of 
the country, it is reasonable to believe that the sums appropriated 
will increase from year to year. 

Grovernmental Service in General. — Commerce with Latin Amer- 
ica is promoted by the Diplomatic and Consular Service. Follow- 
ing the custom of specializing, there is today in the Departmenf of 
Commerce a thoroughly organized Bureau of Trade Relations, one 
of the chief divisions of which is that of Latin America. The im- 

— ^ortance of the Diplomatic branch is great, as it consummates com- 
mercial arrangements which can be made only through the Foreign 
Offices of the republics. This is a fact not generally recognized and 
one that should be remembered by all interested in the promotion 

^jji^reater business with Latin America. The other branch of the 

314. 



GOVERNMENTAL ASSISTANCE 315 

Service is the Consular, and the value of the latter in the develop- 
ment of trade with foreign countries is widely recognized for the 
reason that it has a more direct bearing on practical results. 

How the Bureau Assists Manufacturers. — The Bureau of For- 
eign and Domestic Commerce serves manufacturers in a practical 
way by issuing reports on trade conditions and business oppor- 
tunities throughout the world. These are compiled by its agents, 
who are the following : 

1. The consuls. These are under the direct control of the De- 
partment of State to which the consuls report, but all their efforts 
in a commercial way are directed by the Bureau of Foreign and 
Domestic Commerce. The work of the American consul is fully 
outlined in Chapter XXIV. 

2. The commercial attaches. These are under the direction of 
the Bureau of Foreign and Domestic Commerce. They serve the 
commercial interests of the United States in general and report 
on specific trade opportunities, make complete reports on the gen- 
eral outlook for business, and give all advice possible to enable 
American manufacturers and merchants to compete successfully 
with foreign nations. Up to the present time there have been 
four appointments of commercial attaches to Latin America: 
namely, to Argentina, Peru, Chile, and Brazil. With the growth 
of Latin American trade will doubtless come the appointment of 
other attaches to most of the remaining republics. 

3. The commercial and special agents of the Department of 
Commerce. These are attached to the Bureau and work under 
its direction with no definite assignment to any one post. They are 
men selected, because of their general export knowledge, to study 
the possibility for the sale of various articles in different countries. 
The reports of the commercial agents are gradually increasing in 
number and within the next few years many important publica- 
tions will result from their labors. A list of the principal reports 
already published will be found on page 490. 

Work of the Tariff Division. — One of the most important dic^ 
visions of the Bureau is that devoted to the tariff, which compiles 
all possible information regarding the tariffs of the countries of 
the world. Particular attention is given to the tariffs of the Latin 
American republics. In the publications of this division appear 
the corrections and changes in foreign tariffs, which are extremely 



r 



316 EXPOETING TO LATIN AMERICA 

numerous. It is possible for the American manufacturer who 
desires information regarding the tariff in any given country to 
avail himself of this Bureau, which, if it has not on file the neces- 
sary data, is in a position to obtain it very quickly. Its chief pub- 
lications are listed on page 490. 

Work of the Statistical Division. — It is only by a careful study 
of the statistics relating to imports and exports that the extent 
of the foreign business of the United States can be appreciated. 
The division of statistics renders an extremely valuable service 
in the collection and publication of details not only relating 
to raw materials but also to manufactured goods that enter and 
Jeave the United States. This division also watches the imports 
and exports of other countries, and the study and analysis of foreign 
trade conditions can be greatly aided by consulting any particular 
item in its publications relating to commerce. 

How the Bureau Collects and Distributes Information. — One of 
the most valuable services of the Bureau is its collection and dis- 
tribution of information relating to trade opportunities abroad. 
This is obtained from various sources, including the Diplomatic 
and Consular Service, commercial attaches, special agents, etc. It 
consists of general or specific facts regarding trade. Many Ameri- 
can houses have been materially benefited by keeping in close touch 
with the publications of the Bureau through which this informa- 
tion is disseminated. 

Other Work of Commercial Agents. — Governmental assistance 
in the development of export trade is being more highly specialized. 
Thus appointments of commercial agents for the study of specific 
branches of trade are frequently announced, and this part of the 
service will become increasingly important. The duties of the com- 
merciaLagents are usually confined to the study of trade oppor- 
tunities for one, or at most for a few, industries. Because of this 
fact more valuable reports can be obtained from them than from 
i the Consuls, who are charged with many other duties. 

Assignments of some of the commercial agents recently ap- 
pointed were as follows : 

To Central America, for a general investigation of trade oppor- 
tunities and openings for American exporters. 

To the republic of Guatemala, to ascertain the conditions sur- 
rounding the sale of clothing, hats, etc. 



GOVERNMENTAL ASSISTANCE 317 

To South America in general, to investigate the lumber trade 
conditions. 

To the east coast of South America, to investigate the hard- 
ware business. 

To South America, to investigate the opportunities for: (a) elec- 
trical machinery; (b) textiles and wearing apparel; (c) boots and 
shoes. 

To Latin America in general, to learn all possible regarding the 
opportunities for furniture. 

To South America, to study the trade conditions in machinery 
and machine tools. 

The Work of Commercial Attaches. — In addition to the work of 
special agents, the American exporters may avail themselves of the^^ 
services of the commercial attaches. The commercial attaches 
are accredited by the State Department to the embassies and 
legations of the United States in Buenos Aires (Argentina), Lima 
(Peru), Rio de Janeiro (Brazil), and Santiago (Chile). Their 
purpose is the study of the commerce and industries of the coun- ( 
tries to which they are assigned, and being charged with no other 
duties they are thus able to obtain a broader outlook of the prob- 
lems of extending American trade than can the Consuls, with 
whom they collaborate. Not being compelled to discharge the 
routine duties which make it necessary for the Consuls to main- . 
tain regular office hours, they are enabled to give the time necessary j 
to painstaking investigation of industries and commercial problems I 
in general, from, the broadest standpoint. When necessity arises I 
they are in position to act quickly and obtain needed information ( 
in the shortest time. 

American exporters, by addressing the Department at Washing- 
ton, or upon application through the branch offices, can obtain j 
the aid of these experts in the solution of their problems. 1"^"^ 

Correspondeiice with Commercial Attaches. — ^As in the case of 
American Consuls, requests for information should not be made 
direct to commercial attaches. In the first place, facts desired by 
manufacturers are frequently already on file, and can easily be 
furnished by the Bureau of Foreign and Domestic Commerce in 
Washington or through one of its branch offices. Secondly, the 
commercial attaches are not supplied with special clerical assist- 
ance properly to answer the numerous inquiries they receive. lu 



I 



318 EXPORTING TO LATIN AMERICA 

the event that information desired is not in the files of the Bureau, 
it is promptly obtained. . 

The reports of commercial agents^ when published, are available, 
and application may be made to the Government Printing Office 
for them. Many of the findings of the agents are chronicled in 
Commerce Reports, and if found of sufficient importance, they are 
published separately under the direction of the Bureau of Foreign 
'■---aitd Domestic Commerce. 

^--^Other Practical Governmental Aids. — Commercial agents, at- 
^ taches, and consular officers sometimes obtain and forward with 
their reports photographs, specifications, samples of goods, etc. 
These are naturally very useful in order to study trade conditions 
and opportunities, and whenever application is made for such sam- 
ples they are loaned to responsible manufacturers, either direct or 
through branch offices of the Department of Commerce. 
Branch Offices of the Bureau. — For the purpose of increasing 
|~rts efficiency, the Bureau of Foreign and Domestic Commerce has 
established branch offices in New York, Chicago, St. Louis, New 
Orleans, San Francisco, Seattle, Atlanta, and Boston. (For ad- 
dresses see page 547 of the Appendix.) This step was taken in 
order that the manufacturer who wishes to extend his export busi- 
ness may be more closely in touch with the Bureau, and in order 
to obviate the delays which are inevitable if information is asked 
by correspondence. Each branch is in charge of an expert and 
there are available therein complete files of the Commerce Reports, 
besides commercial reports on specific commodities, samples, plans, 
specifications, etc., received by the Bureau from its agents abroad. 
The manufacturer who wishes to obtain information regarding the 
sale of a particular product may apply to the special agent of 
the Bureau. There is no charge whatever, and all that is necessary 
to avail oneself of this service and to obtain cooperation in study- 
ing trade opportunities is to keep in touch with the agent. 

Specialized Information of the Bureau. — One of the most im- 
portant services of the Burea^, which is available to every business 
man, is its cooperation worl^ and its dissemination of information 
relating to specific commodities or business opportunities in dif- 
ferent places. Through its correspondents, the consular agents and 
commercial attaches, the requirements of dealers are ascertained. 
Not infrequently it happens that, in order to take advantage of 



r- 



GOVERNMENTAL ASSISTANCE Sid 

these opportunities, quick notification of manufacturers is neces- 
sary. Manufacturers and exporters who have notified the Bureau 
of their interest are informed of the opportunities by special con- 
fidential bulletins or telegrams. 

Contents of Commerce Reports. — The Bureau publishes daily an 
organ known as Commerce Reports; this is the successor of a pub- 
lication which was called the Dajily Consular and Trade Reports. 
It contains the information already referred to and is extremely 
valuable in the development of an export trade. While Commerce 
Reports necessarily contains information relating to trade oppor- 
tunities throughout the world, a considerable portion of it is devoted 
to information regarding business in Latin America. 

The annual reports made by the American Consuls to the Depart- 
ment of State, relating to conditions of trade in their districts, are 
also published annually. On account of the interest being mani- 
fested, the reports are being classified so that those relating to 
Latin America may be obtained separately. 

The Commerce Reports is sent free of charge to newspapers, 
business organizations and trade journals. Manufacturers or mer- 
chants who desire to subscribe may do so at the rate of $2.50 per 
year. Subscriptions may be sent to the Superintendent of Docu- 
ments, Government Printing Ofiice. 

The Distribution of Commerce Reports. — Many thousands of 
copies of Commerce Reports are distributed daily. Consular officers 
frequently submit reports, upon receipt of which multigraph copies 
thereof are distributed. The character of the reports, sometimes, 
is of such a nature that it is deemed inadvisable to print them, and 
the reports are then loaned in manuscript, in confidence only, to 
American firms. When documents accompanying reports are use- 
ful, they are sent to interested concerns. The most modem means 
are adopted to make the information obtained in this way available 
to the largest number of individuals in the shortest time. 

American Trade Watched by Attaches. — As an indication of the 
care with which American export interests are being considered by 
the commercial attaches may be cited the request of the Department 
of Commerce that trade journals be sent to commercial attaches 
in addition to the American Consuls. 

Cooperation with. Commercial Organizations. — ^The Department^ 
of Commerce, through the Bureau of Foreign and Domestic Com- 



320 EXPORTING TO LATIN AMERICA 

merce, is now cooperating in a very definite manner with commer- 
cial organizations. This consists in making arrangements with 
commercial bodies who appoint for the purpose a person whose 
functions correspond largely to those of the branch agents of the 
Bureau. 

This cooperation will make for the utmost efficiency inasmuch 
as the local organizations will thus be able to avoid delays and 
will also be able to furnish the information of interest to manu- 
facturers. 

As outlined by the Chief of the Bureau, the mutual obligations 
on the part of the business organizations and the Bureau of Foreign 
and Domestic Commerce are as follows: 



0BLiaATI01S"S OF LOCAL ORGANIZATIONS 

1. The local organization shall establish a foreign trade bureau. 

2. This foreign trade bureau shall be under the direction of the 
governing board of the organization, which shall be given power on 
behalf of the organization to enter into such agreements as may be 
necessary. 

3. The executive direction of this work shall be in the hands of a 
man who shall devote his entire time to it, and he shall be provided 
with such clerical assistance as may be necessary to prosecute his 
work effectively. 

4. The work which is being carried on shall at all times be open 
to the inspection of the officers of the Department of Commerce. 

5. The foreign trade bureau shall render regular monthly reports 
of a form to be prescribed by the Bureau of Foreign and Domestic 
Commerce. 

6. The foreign trade bureau shall make at its own expense a com- 
plete copy of the "Exporters' Index" for its section of the country. 
This index shall be kept up to date and additional data transmitted 
to Washington. 

7. The foreign trade bureau may be called upon to make reports 
on specified subjects. It is understood, of course, that such service 
will not be called for to any considerable extent. 

8. The foreign trade bureau will be expected to receive and en- 
tertain (arrange conferences and meetings for) visiting commercial 
attaches, commercial agents, and consuls, on leave in this country. 

9. The service rendered by the foreign trade bureau will not be 



GOVERNMENTAL ASSISTANCE 321 

restricted to the members of the organization, but will be freely given 
to all citizens residing in the territory of any particular bureau. 



SERVICE OF THE BUREAU 

1. The Bureau of Foreign and Domestic Commerce will place at 
the disposal of the man who is delegated to do this work every 
facility of its Washington office and its branch offices, for purpose 
of study. This will enable him to gain a complete idea of the 
facilities which the Bureau has to offer, and will also put in his hands 
the tools with which to work. 

2. The Bureau of Foreign and Domestic Commerce will furnish 
the local bureau with all the information distributed by it. This 
will include: 

(a) The details and addresses of "foreign trade opportunities." 

(b) Photostatic copies of plans and specifications which have been 
sent heretofore only to branch offices of the Bureau. 

(c) All confidential circulars issued by the Bureau. 

(d) Telegraphic trade opportunities which have been received by 
cable. 

3. Ordinarily the information which the Bureau can furnish in 
answer to an inquiry is arbitrarily limited. This is necessary, not 
only on account of the great volume of requests but also because of 
the limited force of the Bureau. On account of the large number 
of manufacturers who would be reached through the local organiza- 
tions, requests from them will receive more detailed and unlimited 
attention. 

4. The Bureau of Foreign and Domestic Commerce will furnish 
each local organization with a complete, so far as available, set of 
the publications of the Bureau. 

5. The Bureau will establish in cooperation with the Superintend- 
ent of Documents in each of the local organizations a supply of its 
publications which are for sale and which will be a convenience to 
local manufacturers in obtaining the desired information. 

6. All samples which are received by the Bureau from its agents in 
the field will be sent to the local foreign trade bureaus for exhibition. 

With the plan in operation it is possible for the manufacturer 
in any particular district to obtain service almost identical with 
that of the branch offices of the Department. 

Publications of the Department. — The Bureau of Foreign and 



33^ EXPORTIlSrG TO LATIN AMERICA 

Domestic Commerce issues a number of publications which are 
invaluable to those who are interested in Latin American com- 
merce. The principal ones are as follows: 

1. Commerce Reports. 

(a) Cable reports of important trade information. 

(b) Consular reports dealing with conditions in particular lines 
of business. 

(c) Reports from commercial attaches. 

(d) Reports from commercial agents. 

(e) Summarizations of the latest statistical information on for- 
eign trade. 

(f) Important announcements of the work of the Department of 
Commerce. 

(g) List of American Consuls temporarily in the United States, 
with addresses. 

(h) Foreign trade opportunities. 

(i) Proposals for government supplies. 

2. Supplements of Commerce Reports. Annual reports of Ameri- 
can consular officers dealing with trade conditions in their districts. 

3. Special Agent Series. Reports of the commercial and special 
agents of the Bureau, dealing with particular lines of business in 
various sections of the world. 

4. Special Consular Reports. Collected reports of American Con- 
suls, usually on some one particular line of industry. 

5. Tariff Series. Reports dealing with customs tariffs, consular 
regulations and trade-mark laws of foreign countries. 

6. Statistical Publications. 

(a) Monthly summary of commerce. 

(b) Commerce and navigation (annual). 

(c) Statistical abstract of the United States. 

Methods of Distributing the Reports. — Any manufacturer or 
business man who desires to receive the publications of the Bureau 
will, upon application, be placed on the mailing list or Exporters' 
Index of the Bureau, and he is invited to indicate to which coun- 
tries he wishes to export and the articles he cares to sell. Any 
information of interest regarding such articles is communicated to 
him. 

How to Obtain Publications. — The Department of Commerce 
through its division of publications publishes twice a year a pam- 



GOVERNMENTAL ASSISTANCE 323 

phlet entitled "List of Publications of the Department of Com- 
merce available for distribution." This list contains the titles of 
all the publications, besides full instructions for obtaining them, 
and condensed information concerning the scope of the publication 
work of the Department. In addition, there is issued monthly a 
list of publications becoming available during the month. These 
valuable pamphlets may be received regularly by making applica" 
tion to the Chief, Division of Publications, Department of Com- 
merce, Washington, D. C. No charge is made for them. 

The Bureaus Directories. — With the assistance of the Ameri- 
can Consuls and commercial agents, there have been published 
several directories of Latin America. These contain the names of 
prospective or possible buyers of American products in foreign 
countries, besides export agents, etc. They are listed on page 504 
of the Appendix. 



CHAPTEK XXIV 
AMERICAN CONSULS. THEIR SERVICE TO EXPORTERS 

Introduction. — The Consular Service, though under the direc- 
tion of the Department of State, serves the Bureau of Foreign 
Commerce of the Department of Commerce. 

In the upbuilding of trade with Latin America the American 
Consuls have been exceedingly important and have rendered in- 
valuable aid. Although the Consular Service was formerly sub- 
jected to considerable criticism because many of the appointments 
were made to discharge political debts, it has now reached such 
a high degree of efficiency that it may be said to compare very 
favorably with, if not to equal, the Consular Service of any for- 
eign country. The bill which was passed by the 63d Congress, 
whose session ended in March, 1915, placed the Consular Service 
on a strictly merit basis, and the result has been to strengthen 
further this ipaportant department. There is no doubt that be- 
cause of this law an increasingly large number of men of recog- 
nized ability will seek appointment as Consuls, and this depart- 
ment will develop a more efficient personnel than it already 
possesses. 

The Present Facilities of the Consuls. — During the last few 
years there has been a marked improvement in the facilities placed 
at the disposal of American Consuls by the United States Govern- 

^^^ ment, but there is room for greater improvement. It is reasonable 
to believe, however, that the aid extended by th*e Government will 
be materially increased in order that Consuls may render still more 
useful service than in the past. 

V pp. Outline of the Consular Service. — The Consular Service in Latin 
I America consists of Consuls General, Consuls, and Consular Agents. 
Besides these there is a Consul at large, whose duties are those of 
a general supervising agent and inspector at large for the Dcya 

L4)artment. In each of the republics there is a Consul General , 
whose headquarters are in the capitok v Consuls are assigned to 

324 



AMERICAN CONSULS, THEIR SERVICE 32S 

the more important places. In the remote points ^onsular Agents 
serve the government as representatives. The latter are not neces- 
sarily Americans, frequently being natives or other foreigners. A 
complete list of the American Consuls in Latin America and their 
stations will be found on page 522. 

The Chief Service of American Consuls. — ^The American Consul] 
acts as the general representative of the American Government in 
the district to which he is assigned. His paramount duty is the \\) 
maintenance and promotion of the rightful interes ts of all Ameri- ^ 
can citizens and their protection in all the privileges provided fori 
by treaty or conceded by usage. 

The Duty of Consular Officers. — The Consuls are charged with 
many other duties. Among these are the s hipment and reli ef of (^ 
American seamen; the adj ustment of d ifficulties in which the lat- 
ter may find themselves; the m aking and forwarding of c onsular /^ 
invoices covering shipments to the United States; the iss uance of 
p roper papers for s hips bound to American ports, etc. With re-\j£\ 
spect to foreign trade, the activity of Consuls is of but compara- 
tively recent origin, but this branch of their work has become 
extremely important. Every consular officer of the United States .. 
is now expected to have an intimate knowledge of conditions of (cO 
the trade and commerce in the particular district ufider his juris- 
diction. He is expected to keep the Bureau of Foreign and Do- /^ 
mestic Commerce fully advised of all matters of interest relating 
to industry, commerce and agriculture in the country, or that 
part thereof, to which he is assigned. He is expected to report 7^ 
promptly any new markets for American manufactures and prod- 
ucts; to investigate opportunities for the sale of American goods; 
and to examine into specific trade problems that may be referred 
to him for consideration. He is also expected to aid American !^ 
commercial travelers by every means in his power. 

What American Consuls May not Do. — ^Under the rules of the 
Department of State, American Consuls are for bidden to sup ply . 
any information relative to credit standing of firms or individuals kJ 
in their districts. They are likewise forbidden to collect claims o r(-^ 
to take any action which might result in friction between them- 
selves and natives of the countries to which they are accredited. 
An American Consul ca nnot be expected to act as a salesm an for (jjX 
an American manufacturer since he must maintain the dignity of 



526 EXPORTmC TO LATIN AMERICA 

his office and naturally can take no action which would reflect 
upon it or which would cause other Consuls or the people to 
lose respect for him and the United States Government. 

r- What not to Expect. — Many American manufacturers misun- 
derstand the services that can be rendered by American Consuls. 
The latter have every right to resent advertising circular letters 
sent them by American firms which seem to assume that they are 
in business. They are not permitted to maintain sample rooms 
and are unable to give more attention to one firm than to an- 
other. 

It is unreasonable to expect Consuls to be possessed of expert 
information upon every conceivable topic and article; and all that 
can be asked is that they shall endeavor to obtain the desired in- 
I formation from the most reliable sources. 

., The Chief Duties of Consuls. — Consuls are constantly being 
• called upon to answer inquiries regarding trade opportunities in 
n their districts. Their chi ef service is •^:o aid, in the most prac- 
l| tical way, t he establishment o f rela tions betwee n known commer- 
' \ c ial houses and American business men . ^ 

Among their successful efforts in this direction have been the 
following: the ci reulation of letters among leading merchants and 
trade organizations, offering the services of the Consuls in 
obtaining prices, terms, and discounts for artides for which it 
seemed practicable to establish a sale; the cooiWation of Con suls 
with leading trade organizations of their districts in whose bulle-^ 
tins announcements of the Consul are widely circulated; the^in.-^ 
serti on of paid advertise ments announcing the fact that trade 
directories, catalogs, and information regarding American prod- 
\jicts were available at the consulate. 

How to Write to American Consuls. — In order to save time in 
l)oth the transmission and reply, letters to Consuls should be 
absolutely specific in nature. The exact problem of the manu- 
facturer should be stated in concrete manner that the Consul 
may know immediately just what is desired. Consuls frequently 

-complain that inquiries received by them are not carefully worded, 

and that it is necessary to exchange two or three letters before an 
intelligent reply can be given. 

It often happens that Consuls are unable to obtain required in- 
formation because of the fact that persons from whom it must be 



AMERICAN CONSULS, THEIR SERVICE 327 

obtained deliberately conceal the facts for reasons of self-interest. 

Consuls are also frequently annoyed with indefinite letters re- 
lating to trade opportunities referred to by them in Commerce 
Reports. When American exporters seek to take advantage 
of such opportunities, their answer should meet every possible con- 
dition and their quotations should be c.i.f . If such a quotation can- 
not be made, at least the freight rate should be obtained and stated 
in the letter. 

Circular letters sent indiscriminately to all the Consuls are 
greatly to be discouraged, inasmuch as the conditions in consular 
districts vary greatly. If letters must be sent to Consuls, they 
should concern themselves only with the particular district to 
which they are mailed. 

Manufacturers and importers occasionally send inquiries to 
consular, offices relative to trade opportunities, accompanied by 
blank forms which they wish filled in and returned. When such 
blank forms are sent they should be forwarded in quadruplicate, 
inasmuch as the Consul is invariably compelled to supply the De- 
partment of State with two copies of every report made by him. 

How Consuls Should Be Addressed. — Letters to Consuls should 
be addressed as follows : American^onsul-^City— Republic. 

When communications are addressed to a Consul ^iSThis per- 
sonal name, they are, in his absence, forwarded to him unopened, 
and as a result there is considerable delay. In the event that he 
has left the Service, important matters may never receive any 
attention. 

Postage should be fully prepaid and when answers are ex- 
pected, there should be inclosed an international post office coupon. 
While Consuls are allowed a certain fund for postage, the number 
of letters which the Consul must answer frequently exceeds the 
sum available and, for that reason, letters of inquiry should in- 
clude postage to cover return. Many letters addressed by Ameri-_ 
can manufacturers to Consuls could be avoided if the informa- 
tion were requested of the Bureau of Foreign Commerce, Depart- 
ment of Commerce. 

Carding American Inquiries. — Because of the receipt of numer- 
ous letters at American consulates from individuals who wish to 
ascertain whether certain American firms are represented or to 
learn the names of the different brands of American goods, th^ 



338 EXPORTING TO LATIN AMERICA 

Consuls are requesting American manufacturers who are so repre- 
sented to advise them accordingly. The Consul General at Buenos 
Aires recently asked that manufacturers who are represented in 
Argentina send to him for record two cards, size 5 inches by 3 
inches, containing the following information: 

No. 1 No. 2 

The Article Name of American manufac- 
Trade-mark turer or exporter, address 

Name of American manufac- Article 

turer or exporter, address Trade-mark 

Name of local representative, Name of local representative, 

address address 

He also suggested that American manufacturers with pur- 
chasing agents in Argentina should forward two similar cards, one 
headed by the name and address of the importing house, followed 
by the article or articles, both in the name of the local purchas- 
ing agent; the second card headed by the name and address of 
the local purchasing agent, followed by the article or articles 
imported and the name of the American exporter. 

How to Request Information.. — American Consuls frequently 
find the requests for information received from manufacturers 
extremely vague. One of them has suggested the following list in 
order that the Consul may render the most intelligent service: 

1. If similar goods are sold what are the prices quoted ? 

2. What is the import tariff? 

3. In what manner should merchandise be packed? 

4. Give rates and discounts of competing countries. 

5. Best way of transportation with freight rates. 

6. Are consular invoices needed? How should they be made 
out? 

7. What are the fees chiarged by customs brokers for making 
entry? 

8. Are there any other charges ? 

9. In what language should correspondence be conducted ? 

10. Is there a duty on catalogs? 

11. What sort of action do you recommend for the introduction 
of merchandise? 



AMEEICAN CONSULS, THEIR SERVICE 329 

Cooperation with Consuls. — Consuls are desirous of cooperating 
with American merchants and exporters and they should be kept 
posted as to the success or failure met with in handling foreign 
trade opportunities found in the Commerce Reports. 

Important results of such consular cooperation are of daily 
occurrence. Many American firms who have taken advantage of 
the trade opportunities outlined by Consuls have been able mate- 
rially to increase their business. Consuls frequently inform busi- 
ness men of opportunities in their districts, as a result'' of which 
they are enabled to make sales. In such instances the successful 
concern should inform the Consul responsible for the original in- 
formation, since the latter will naturally feel a greater interest 
and may be even more successful in promoting the sale of other 
American manufactures. 

How Consuls Can Assist Commercial Travelers. — One of the 
services which a Consul can render, and of which the commercial 
traveler should not fail to avail himself, is that of furnishing 
information regarding local conditions in a particular branch of 
trade. The representative of an American house, before making 
any visits to merchants, should call upon the Consul for an inter- 
view and for advice and suggestions. These, by reason of the 
ConsuPs knowledge, will be found valuable and will often save \ 
much time and expense. Consuls frequently complain that they 
are unaware of the presence, in their districts, of agents or travel- 
ing representatives of American firms. They often hear of oppor- 
tunities for the sale of American manufactures and if the agent 
makes himself known they are in a position to aid him very 
materially. 

Another service which the Consul can render the traveler is to) 
obtain for him entree to the clubs and the best social and busi- 
ness circles. For this purpose proper credentials are needed, and 
such introductions are invaluable as they greatly influence trade^ 

Sending Catalogs to Consuls. — In almost every consulate in 
Latin America are found the catalogs of American manufacturersT^ 
These are used more frequently in some consulates than in others 
and the value of such distribution depends upon the individual 
efforts of the Consul to whom they are sent. Generally speaking, 
.the sending of catalogs to Consuls is unproductive of results, 
because of the fact that importers and manufacturers in Latin 



330 EXPOETING TO LATIN AMEEICA 

America only infrequently ask Consuls for information, depend- 
ing upon the personal visits of salesmen and their established com- 
mission house arrangements. However, when catalogs are for- 
warded to American Consuls they should invariably be accom- 
panied by a price list and discount sheet, for the reason that 
otherwise they are of no value. 

The Distribution of Catalogs by Consuls. — Business houses some- 
times send catalogs to Consuls in Latin America to be distributed 
to persons interested. Such catalogs are frequently forwarded 
with no provision whatever for postage or the expense of dis- 
tribution. Consuls should not be expected to distribute catalogs; 
when they are sent to be placed with firms who may be inter- 
ested, provision should be made for the expense of their delivery. 

^ Consuls Should Be Furnished Names. — When corresponding 

with Consuls regarding the distribution of catalogs, the manu- 
facturer should inclose a list of the dealers to whom catalogs have 
been sent direct. In the event that there have been any omissions, 
they will be quickly noted. In the case of periodicals, a list of 
the subscribers in a given town or district should be supplied the 
Consul who can then more intelligently distribute surplus copies. 
';^,Catalog:s in Consular Libraries. — It is interesting to mark the 
' difference in the efficiency of American consular representatives, 
particularly in the matter of catalogs and booklets. Occasionally 
Consuls report that libraries of catalogs are of no avail and but 
infrequently consulted. On the other hand, many Consuls have 
been able to obtain remarkable results in furthering export trade 
interests. Generally speaking, it will prove advantageous to for- 
ward to Consuls catalogs accompanied with full details regarding 
terms, commission discounts, etc., that any information desired 
may be supplied upon demand. The greatest problem in con- 
nection with catalogs sent to Consuls is to make them really use- 
ful. Because of this, a number of Consuls, for the purpose of 
arousing -the interest of business houses in their districts, have 
prepared printed or typewritten lists of the catalogs sent to them. 
These lists are distributed among prospective buyers and the plan 
has often had good results. 

The Use of Trade and Technical Journals. — Many Consuls find 
it advantageous to receive trade and technical journals which, 
after being read in the consulate, are placed on the reading tables 



AMERICAIT CONSiJLS, THEIR SEBVlCE 331 

of the larger clubs. The journals are distributed according to 
the character of the members of the organizations. The value 
of advertisements in these publications is thus increased, as such 
distribution makes it possible for a larger number of prospective 
buyers to see the advertisements than would otherwise be the 
case. 

How Consuls Advertise for Trade Inquiries. — Some Consuls 
have adopted the policy of advertising in order to bring to the 
attention of possible agents and importers the advantages of 
American manufactures. In such consulates, when letters are 
received from American manufacturers who wish to establish trade 
relations, they are listed for advertisement in the principal pa- 
pers, the editor of which has allowed the Consuls sufficient space 
for the purpose. The "opportunities" are numbered and appear 
in the papers for a certain number of days. Experience has proved 
that the scheme is very successful and many individuals have 
sought the Consuls because of the advertisements. The names 
of those interested are then properly indexed on cards, and these 
inquiries are then used as the basis for "trade opportunity" re- 
ports, which appear in the Commerce Reports, bringing the matter 
to the attention of the manufacturers of the United States. 

As a concrete example of this work may be cited the experience 
of the Consulate General at Eio de Janeiro. As a result of the 
effort of the Consul General at that point, the Journal do Comer- 
do, one of the leading papers of Brazil, publishes in its commer- 
cial section, free of cnarge, the names and addresses of American 
firms seeking trade with Brazil, which are supplied by the Ameri- 
can Consul. As the lists appear two or three times weekly the 
value to American exporters of this service will be readily appre- 
ciated, particularly as this paper reaches the most influential im- 
porters and agents. 

Other Uses of Catalogs Sent Consuls. — ^Frequently, upon request,^ 
and as often without definite suggestion. Consuls arrange to place 
the catalogs sent them in the local Chambers of Commerce or in 
the reading rooms of clubs frequented by merchants and importers. 
Such distribution is very valuable, as it reaches the individualsj 
who are particularly interested. 

Consuls Require Advertising Matter in Language of Country. — 
Catalogs and price lists sent to American Consuls in Latin Amer- 



33*2 EXPOKTmC TO LATIN AMERICA 

ica should be printed in Spanish, except in the case of Brazil where 
Portuguese should be used, and of Haiti in which French is 
spoken. When Consuls are approached for information relative 
to American manufactures and products, they are unable to lend 
the fullest assistance unless the catalogs sent them are in the 
language of the people. 

Payment of Duties on Samples Sent to Consuls. — Many Amer- 
ican houses frequently send samples of their products to American 
Consuls, with the desire that they be placed in the hands of 
importers or merchants who would likely be interested. The regu- 
lations relative to samples differ in the various republics, but 
as a general rule samples which are not salable are admitted 
free of duty and on all samples which are salable duty is col- 
■ lected. In many instances consular officers have had to pay duty 
I on parcels only to find that they were of no use. As no fund is 
I provided for such payments, the losses were personal ones. When 
•:2*-i?^nierican manufacturers wish to send samples to Consuls (or 
even to dealers), they should ascertain in advance the duty thereon 
and an international post-office money order or draft should be re- 
mitted to cover the duty which may be incurred. 
^.^-f-.^Displays of Samples in Consulates. — Although the regulations 
do not authorize it, in a number of consulates arrangements 
have been made to display articles forwarded by American 
manufacturers in order that they may attract the attention of 
local importers. Some Consuls keep on display samples sent 
them until arrangements have been concluded for local 
agencies. 

The Value of Conferences with. Consuls. — From time to time 
American Consuls return to the United States on visits. While in 
this country the Department of Commerce expects them to co- 
operate in every possible way with commercial bodies and indi- 
vidual manufacturers who may wish to confer with them in 
reference to trade extension. The presence of Consuls who are 
in the United States is made known through the Commerce 
Reports, and secretaries of business organizations should care- 
fully note the advantage of personal contact with these represen- 
tatives. 

_ Jl Valuable Service of Consuls. — One of the m^tjisefuLservices 
\ rendered by American Consuls is available to manufacturers. This 



AMERICAlSr CONSULS, THEIR SERVICE 333 

is the reporting of specific^ opportunities for making_Ji:adfi con-/ 
nections. A reading of Commerce Reports will be found pro- 
ductive of results if proper use is made of the information given. 

List of Consulates. — A list of the American consulates in the 
Latin American republics is given on page 522 of the Appendix. 



CHAPTER XXV 

ORGANIZED EFFORTS FOR PAN-AMERICAN COMMERCIAL RELA- 
TIONS. THE PAN-AMERICAN BUREAU. « CONFERENCES, 
CONVENTIONS 



ORGANIZED EFFORTS FOR PAN-AMERICAN COMMERCIAL 

RELATIONS 

Introduction. — ^Within the last decade, much organized effort 
has been devoted to the upbuilding of American trade with Latin 
America. Generally speaking, this effort has been directed through 
the following channels: 

1. United States Government: Department of Commerce, Bu- 
reau of Foreign and Domestic Commerce. 

2. The Pan-American Union, Washington, D. C. 

3. Organizations such as the Philadelphia Commercial Mu- 
seum, the National Association of Manufacturers, the American 
Manufacturers^ Export Association, etc. 

4. Business organizations such as the Chicago Association of 
Commerce, the Latin American Foreign Trade Association (now 
the Business Men's League of St. Louis), Chambers of Commerce, 
Business Men's Leagues, and trade bodies in general. 

5. Foreign trade conferences ^nd conventions. 

The Pan-American Union. — The Pan-American Union is a con- 
federation of twenty-one nations under the official title, "The 
International Union of the American Eepublics," being composed 
of all the independent nations of the Western Hemisphere. It 
was founded in 1890 and its chief object is the development and 
conservation of commerce and polity among the American repub- 
Itcs. It is an independent international institution, not a subor- 
dinate Bureau of the United States Government. Its governing 
board is composed of the diplomatic representatives in Washing- 
ton of the Latin American governments, and the Secretary of State 
of the United States, This board elects a Director General and 
Assistant Director. 

334 



EFFORTS FOR COMMERCIAL RELATIONS 335 

The TJnion in Trade Development. — The Pan-American UnionT/ 
through correspondence with manufacturers, exporters, and im- ' 
porters in the United States and Latin America, advises them re- 
garding trade opportunities and conditions in the various Ameri-/ 
can republics. It answers annually thousands of letters relatiiig 
to Latin America. It supplies newspapers and special writers, 
lecturers, and students with information desired regarding the 
various phases of history and political, social, educational, and 
general progress of the American nations. 

It advises capitalists and investors concerning opportunities for 
developing resources, building railroads, and starting new indus- 
tries. 

It informs mining, hydraulic, and electrical engineers relative 
to the obtaining or operating of mines, the building of water 
power plants, and the establishment of electrical power and light 
plants. 

It supplies information to agriculturists, laborers, and emi- 
grants concerning farms, conditions of employment, and homes 
in the new lands. It advises lawyers concerning the laws, codes, 
and statutes of each republic. 

It supplies information to libraries and authors, relative to 
books and writers of the American nations. 

The Pan-American Bulletin. — The Union publishes a monthly 
journal, the Pari- American Bulletin, a magazine of two hundred ' 
pages, which has a circulation of about five thousand copies. The 
Bulletin contains articles of interest relative to conditions in Latin 
America, a review of articles that appear in the magazines con- 
cerning Pan-America, a series of Pan-American notes which are 
not otherwise available, the subject-matter of consular reports, 
the reviews of the commerce of the various republics for the past 
fiscal year, articles and notes regarding the commercial condi- 
tions, and other interesting items of many kinds. This publica- 
tion may be obtained at the following rates : 

English edition $2.00 

Spanish edition ,. . 1.50 

Portuguese edition 1.00 

French edition 75 

Subscriptions to the Bulletin may be addressed to the Pan- 



336 EXPORTING TO LATIN AMERICA 

American Union, 17th and B Streets, N. W., Washington, D. C. 

Other Publications. — The Union has compiled a series of mono- 
graphs relating to the American republics, which answer in suc- 
cinct form two-thirds of the questions that the average person 
may wish to know relative to a country which it is desired to visit, 
in which capital may be invested, or with which it may be desired 
to establish business relations. The Union also prepares and pub- 
""ttshes a comprehensive variety of books and pamphlets relating to 
the American republics. For a list and prices see page 488. 

Library Maintained by the Bureau. — The Union maintains a 
,' very large library, known as the Columbus Memorial Library, 
where there are approximately thirty thousand volumes, constitut- 
ing a valuable collection relating to the American republics. It 
also subscribes for the leading reviews, daily newspapers, and offi- 
cial gazettes of the Latin American countries. 

Work of the Bureau with Trade Bodies. — One of the valuable 
"Services rendered by the Union is its close relation to Chambers 
of Commerce and other commercial organizations in North and 
South America. It disseminates through these channels useful 
information relative to trade conditions in the various American 
republics, and obtains from them much valuable data. 

The Maintenance of the Bureau. — The Bureau is essentially an 
international institution, maintained by contributions from the 
Latin American countries and the United States. The contribu- 
tions are based in proportion to the population, always including 
the United States in the calculations. The basis is now $125,000, 
and the proportion of the Latin American countries is $50,000. 

The Directors. — The Director General of the institution is Hon. 
John PiarrcH, to whom, in a large measure, the efficiency of the 
Union is due. The Assistant Director, and also Secretary of the 
Governing Board, is Francisco J. Yanes, a Venezuelan by birth 
but long associated with the Union in responsible positions. 

The Home of the Union. — The new building of the Pan-Amer- 
ican Union in Washington is a notable and beautiful edifice which 
cost, including the ground, approximately $1,000,000. Three- 
fourths of this sum was contributed by Mr. Andrew Carnegie, 
while the remainder, together with the quotas of the other re- 
publics, amounted to about $250,000. 

Organizations for Foreign Trade Development. — The factor of 



EFFORTS FOR COMMERCIAL RELATIONS 337 

greatest importance in the development of business with Latin 
America is individual effort and no manufacturer can possibly 
hope to achieve success who does not recognize this fact. "Within 
the last decade business organizations, Chambers of Commerce, 
and trade bodies of various kinds have agitated the extension of 
American trade with Latin America. Unfortunately, much of the 
agitation has taken the form of enthusiastic banqueting, the pas- 
sage of resolutions, and a considerable amount of unintelligent 
effort. There are, however, a number of organizations which have^ 
rendered extremely valuable service and will continue to do so 
by reason of the experience they have already gained. Many of 
the important export successes of large manufacturing establish- 
ments are due to the cooperative assistance rendered by such trade 
bodies. Among the most important may be mentioned the follow^ 
ing: 

1. Philadelphia Commercial Museum. 

2. National Association of Manufacturers. 

3. American Manufacturers' Export Association. 

4. Business Men's League of St. Louis (Foreign Trade Bureau 
— formerly Latin American Foreign Trade Association). 

5. Chicago Association of Commerce. 

The work of these organizations is described under the appro- 
priate head. ^ 

The Philadelphia Commercial Museum. — The Philadelphia Com- 
mercial Museum was one of the pioneer organizations in the 
development of business with Latin America. It was established 
in 1894, and is maintained by contributions from the State 
and the municipality, and by the memberships of individual man- 
ufacturers. 

Services of tlie Philadelphia Cammercial Museum. — The For- 
eign Trade Bureau of the Philadelphia Commercial Museum ren- 
ders to its members the following services : 

1. It publishes an export trade paper called Commercial 
America, which contains information of interest to the foreign 
buyer. The Spanish edition is circulated in Latin America. In 
this publication is carried a classified list of manufacturers, and 
included in this list are the names of the members of the Foreign 
Trade Bureau and advertisers. The publication also contains a 
column headed, "Foreign Agents Wanted for American Goods." 



338 EXPORTING TO LATIK AMERICA 

The names of advertisers are published under this heading and 
advertising nonmembers may also use it. 

2. The Bureau issues a weekly export bulletin which includes 
inquiries received from foreign firms for American-made goods, 
together with general export news items, changes in tariff, trade- 
marks, and patent laws, travelers' regulations, business sugges- 
tions and trade openings, a schedule of mail and freight, steam- 
ship sailings, etc. 

3. The members of the Bureau are supplied information con- 
cerning all matters bearing upon the development of business in 
any foreign country. 

4. It replies to specific inquiries covering such questions as 
consular invoices, customs regulations, and duties, and more gen- 
eral matters such as the character and possibilities of particu- 
lar markets. 

5. It answers specific inquiries for credits and supplies infor- 
mation regarding foreign firms. 

6. Translates business correspondence into or from any com- 
mercial language. 

7. Prepares reports on commercial conditions, business oppor- 
tunities, and new enterprises. 

8. Supplies publicity for the manufacturer's name and his prod- 
ucts by means of typewritten and printed lists circulated among 
foreign buyers of American goods. 

9. Supplies assistance in collecting accounts of delinquent for- 
eign buyers, at nominal charges. 

10. Renders assistance in securing reliable agents in any for- 
eign country. 

Basis of Service of the Commercial Museum. — The service is 
based either on outright memberships or advertisements in its 
organ. Commercial America. 

The terms for information regarding foreign firms are as follows : 
With contracts for $200— 50c.; $300— 75c.; $450— $1.25; $800 
—$2.50. 

The translation of business correspondence on the following basis : 
With contracts for $200— 50c.; $300— 75c.; $450— $1.25; $800 
—$2.50. 

Translations are charged for by the Museum at 15 cents per hun- 
dred words from foreign languages into English, 25 cents per 



EFFORTS FOR COMMERCIAL RELATIONS 339 

hundred from English into foreign languages. These prices do 
not include circulars nor catalog matter, for which there are 
other charges. 

The cost of advertising in the Museum's organ, CommerdaX 
4 menca, is as follows: 

One full page with service, $800; Half -page, $450; Quarter- 
page, $300; Eighth-page, $200. 

Membership in the Museum is not confined to one state, but 
service is also being rendered to firms in almost every large city 
of the United States; any manufacturer, anywhere, is eligible for 
membership. The Association maintains a library, which contains 
50,000 volumes and is extraordinarily complete in the matter of 
commercial works of reference, documents, and consular reports 
of foreign Governments, etc. Its home is in a large building on 
34th Street, below Spruce. 

The National Association of Manufacturers. — The National As- 
sociation of Manufacturers, New York, was founded in 1895. 
It now has a very large membership and one of the important 
services it renders its members is in its Department of Foreign 
Trade. The work of this organization is similar to that of the 
Philadelphia Commercial Museum. The Association also pub- 
lishes two organs for circulation in English and Spanish speak- 
ing countries, one called Export American Industries, the other 
(the Spanish edition), Industrias Americanas. 

The Chicago Association of Commerce. — The foreign trade di- 
vision of the Chicago Association of Commerce was one of the first 
organizations to carry on concrete work in the development of 
foreign trade. It established in the city of Buenos Aires a branch 
office for the purpose of serving the interests of the Chicago 
market in that city and in the republics of Argentina, Brazil, 
Uruguay, Chile, etc. This office is now conducted by the De- 
partment of Commerce, Bureau of Foreign and Domestic Com- 
merce. "" 

The Work of the Association in South America. — The Associa- 
tion's office in South America is of assistance to its members in 
the following ways: 

1. Obtaining agents and placing lines of goods to the best pos- 
sible advantage. 

2. Obtaining general and local salesmen for members. 



340 EXPORTING TO LATIN AMERICA 

3. Securing information relative to the possibilities for the 
sale of its goods by members. 

4. Missionary work for the purpose of emphasizing in the Latin 
American market the superiority of American manufactures. 

5. The establishment of sample rooms for members, with an 
exhibition of merchandise. The sample room representation has 
been at the expense of individual members who have taken advan- 
tage thereof. 

Other Services of the Foreigna Trade Division. — In addition to 
continuing a foreign trade representative residing in Buenos Aires, 
the Association has recently established the office of Foreign Trade 
Commissioner in connection with the Chicago staff of the organi- 
zation. The duties of the foreign trade commissioner are to 
render every possible service to members of the Association who 
are interested in the subject of foreign business, and to put such 
individual members in touch with foreign requirements and busi- 
ness opportunities, not only in South America but also with the 
whole world outside of the United States. The manufacturers 
who had representation in the sample room of the Association in 
Buenos Aires arranged therefor on the basis of paying the expanses 
incidental to representation, in addition to their Association mem- 
bership dues. 

How the Association Extends Its "Usefulness. — Recently the As- 
sociation, recognizing that its field of usefulness might be expanded, 
decided to extend the privilege of becoming sustaining members 
of the foreign trade division to manufacturers in the states of 
Michigan, Ohio, Indiana, Kentucky, Illinois, Wisconsin, Minne- 
sota, Iowa, and Missouri. 

The Cost of Membership. — The cost of a sustaining membership 
of the foreign trade division is $10 annually. The cost of repre- 
sentation in the exhibition in Buenos Aires is dependent upon 
special conditions. The address of the Association is 10 South 
LaSalle Street, Chicago, Illinois. 

. Massachusetts Trade Board. — This organization was established 
under the auspices of the Massachusetts State Board of Labor 
and Industry in October, 1914, its purpose being to enlarge the 
markets of Massachusetts' manufacturers. It cooperates with the 
various government bureaus; the principal business organizations 
in foreign countries ; domestic importing houses, foreign importing 



EFFORTS FOB COMMFBCIAL RELATIONS 341 

houses, and other sources of trade opportunity and information. 
For those manufacturers who have no facility for initiating for- 
eign business, the Board provides a translation service, financial 
records of foreign firms, special reports on foreign markets, lists 
of suitable agents abroad, and numerous other services. Its office / 
is in Boston. 

American Manufacturers' Export Association. — The American 
Manufacturers' Export Association, Manhattan Life Building, 
Broadway, New York, was incorporated in 1911 with the prime 
object of fostering foreign trade. It is cooperative in nature 
and maintains very close relations with the United States consular 
representatives abroad. Chambers of Commerce and other com- 
mercial bodies in foreign countries. It likewise possesses corre- 
spondents throughout the world and advises its members of busi- 
ness opportunities and developments abroad. It publishes a 
monthly bulletin, issued exclusively to its members, in which much 
information is given on topics of practical interest to exporters. 
It also arranges monthly luncheons, on which occasions speakers, 
usually authorities on their subjects, address the members, and 
opportunity is afforded those present to ask questions and to par- 
ticipate in a general discussion. An interesting feature of the 
Association's work is an emplojrment bureau limited strictly to 
the export field. The Secretary of the Association maintains a 
file of applicants for positions whose qualifications and references 
are carefully investigated. Members can obtain in this way the 
services of reliable and experienced men in the export field. The 
Association likewise investigates projects of a questionable nature 
and warns its members against the dishonest or unscrupulous in- 
dividuals who seek to take advantage of American business men. 
As far as it is possible, members are advised of the contemplated 
visits of foreign merchants to New York, and their names and 
addresses are provided. 

Other Services Rendered. — Other features of the work are the 
collection of drafts on foreign countries by special arrangement 
with the bankers of the Association. Members are given the privi- 
lege of receiving free information on questions requiring expert 
judgment and advice in connection with the forwarding of ship- 
ments. A certain number of credit reports are also supplied. The 
Association maintains a list of patent and trade-mark agents, and 



342 EXPORTINO TO LATIN AMERICA 

cooperates with its members in obtaining special rates through 
a New York firm. It also helps, through its local forwarding con- 
nections, to supply c.i.f. quotations to all ports of the world. It 
aids its members in obtaining lists of competent translators as well 
as printers who specialize in foreign languages. The membership, 
costing $50 yearly, is open to all manufacturers. 

The Chamber of Commerce of the United States. — The purpose 
of this organization is expressed in its title. Many problems in- 
volved in foreign trade are given serious consideration, and its 
efforts to extend the foreign commerce of the United States are 
valuable to all exporters. Its office is in Washington. 

The National Foreign Trade Council. — A result of the first Na- 
tional Foreign Trade Convention at Washington, May, 1914, was 
the organization of the National Foreign Trade Council, for the 
purpose of promoting cooperation by the Government, and the com- 
mercial, and industrial, and financial interests in foreign trade. 
A further object was to coordinate the various foreign trade 
activities of the United States. The Council has an authorized 
maximum membership of fifty business men, including merchants, 
manufacturers, railroad and steamship men, and bankers, repre- 
senting all sections of the United States and collectively stand- 
ing for the general interest of all elements engaged in foreign 
trade. It is nonpolitical and nonpartisan, its function being in- 
vestigatory and advisory. It seeks effectively to cooperate with 
other organizations in the encouragement of a sound national for- 
eign trade policy. Through its committees the Council is con- 
stantly investigating, and from time to time publishes reports upon 
problems arising in oversea commerce. 

Business Men's League of St. Louis. — A number of other busi- 
ness organizations are making vigorous efforts to aid their mem- 
bers in extending their foreign trade. Among these is the Busi- 
ness Men's League of St. Louis, which absorbed the Latin Ameri- 
can Foreign Trade Association, one of the first associations founded 
for the purpose of increasing the export trade of this country. 
Under its auspices delegations of business men have been sent 
to Mexico, Central and South America. It was also the first or- 
ganization to establish an Export Managers' Bureau which is 
•described elsewhere. The Detroit Chamber of Commerce is an 
organization which is making a vigorous effort to extend the for- 



EFFORTS FOR COMMERCIAL RELATIONS 343 

eign trade of Detroit. An interesting feature of its propaganda 
are the advertisements in export trade papers in which are set 
forth the advantages of Detroit as an export center. The Cleve- 
land Chamber of Commerce has recently made arrangements with 
the Federal Government to act as a branch office of the Bureau 
of Foreign and Domestic Commerce. The Pittsburgh Foreign 
Trade Commission is serving the members of a large manufac- 
turing district in the general field of foreign trade. The Mer- 
chants' Association of New York carries on an important work in 
foreign trade extension. There is hardly a business organization 
in the United States which is not seriously considering ways and 
means of furthering the export interests of its members. 

Clubs Devoted to Pan-America. — There are a number of impor- 
tant clubs and societies for the development of better relations with 
the Latin American countries. These will be found listed and 
described on page 531 of the Appendix. 



CONVENTIONS AND CONFERENCES RELATING TO LATIN 
AMERICAN TRADE 

Importance of Latin American Conferences and Conventions. — '■ 
During the past few years the iaterest in Latin American trade 
extension has found expression in a number of important conven- 
tions and conferences. These have been held in various cities 
mainly for the purpose of considering business conditions and *^ 
plans to increase the trade between the United States and the 
Latin American republics. There have also been held a number 
of conferences for official discussion of the relations between the 
United States and the Latin American republics, with a view to 
making them more intimate. The addresses which have been 
delivered at these conferences and the discussions which have 
taken place have been among the most valuable contributions to 
export trade literature. The proceedings in many instances have 
been printed and are available for those who are interested. A 
study thereof will afford information regarding many phases of 
the Latin American trade problem. 

Some of the Conferences. — Among the recent conferences are 
the following: 



344 EXPOETING TO LATIN AMEKICA 

1. The PanrAmerican Commercial Conference. Held Febm- 
ary 13-17, 1911, Washington, D. C. This conference was held 
in the Pan-American Union Building, and was attended by the 
delegates of many of the principal commercial organizations, the 
leading manufacturing, exporting, and importing establishments 
of the United States, educational institutions, Latin American 
Ambassadors, Ministers, and Consuls, etc. The proceedings, pub- 
lished by the Pan-American Union, cost $1.25. 

2. The National Foreign Trade Convention. Held at Wash- 
ington, D. C, at the Hotel Raleigh, May 27-28, 1914. The For- 
eign Trade Convention marked the assemblage of many repre- 
sentative business men and concentrated their opinion on the 
opportunity for the development of foreign trade. The proceed- 
ings were published, and may be had by addressing the Secre- 
tary, National Foreign Trade Council, Headquarters 64 Stone 
Street, New York, cost $1.50. 

3. The Second National Foreign Trade Convention. Held at 
the Planters Hotel, St. Louis, Mo., January 21-22, 1915. The 
convention was largely attended and many interesting topics were 
discussed. The proceedings have been published and may be ob- 
tained by remitting $1.50 to the Secretary, National Foreign Trade 
Council, 64 Stone Street, New York. 

4. The Pan-American Financial Congress. Held in Washing- 
ton, May 30-June 2, 1915. This was called by the Secretary of 
the Treasury for the purpose of considering the commercial and 
financial situation which had arisen from the European War. It 
was attended by the representatives of the Latin American coun- 
tries, American bankers, and delegates specially invited by the 
Secretary of the Treasury. The proceedings were published in 
the Pan-American Bulletin. 

5. Meeting of the American Academy of Political and Social 
Science. Held May, 1915, in Philadelphia. This was devoted to 
a consideration of inter-American problems, with particular ref- 
erence to the economic situation, and was attended by many 
distinguished exporters and business men. The report of the 
meeting, published both in paper and cloth binding ($1.00 and 
$1.50 respectively), is obtainable of the American Academy of 
Political and Social Science, West Philadelphia Station, Phila- 
delphia, Pa. 



EFFORTS FOR COMMERCIAL RELATIONS 345 

6. The Latin American Trade Conference of the New York, New 
Haven, and Hartford R, R. Co. This was held at Boston, De- 
cember 15, 1914. It was attended by many prominent manufac- 
turers, and several important addresses on the subject of general 
trade and banking conditions in South and Central America were 
delivered. 

7. The Clarh University Conference. This was held at Clark 
University in May, 1913. A number of the most prominent 
authorities on Latin American affairs were invited to deliver ad- 
dresses, which have been published in book form. Among the 
speakers were the Minister of Peru; Hon. John Barrett, the Di- 
rector General of the Pan-American Bureau ; the Secretary of the 
Pan-American Union, Hon. Francisco J. Yanes ; Professor William 
R. Shepherd. The addresses, bound in cloth, under the title "Latin 
America," can be obtained from 0. E. Stechert & Co., Boston, 
Mass. 

8. The Latin American Trade Conference. An informal Latin 
American trade conference was called at Washington, D. C, Sep- 
tember 10, 1914, by the Secretary of State and the Secretary of 
Commerce. As a result of this conference a Latin American trade 
committee was appointed which made the report outlining in sim- 
ple form South American trade conditions. The report is ob- 
tainable from the National Foreign Trade Council, 64 Stone 
Street, New York City, price 25 cents. 

9. The Harrisburg Foreign Trade Conference. November 24, 
1914, a foreign trade conference was held at Harrisburg, Pa., by 
the local and central Pennsylvania manufacturing interests. It 
was attended by representatives of banking institutions, steam- 
ship companies, etc. The discussion was valuable to all present. 

10. The Richmond Latin American Trade Conference. At 
Richmond, Va., September 29-30, 1914, an important conference 
was held for the purpose of considering the possibilities of trade 
extension with the countries of Central and South America. The 
conference was an interesting one and was addressed by promi- 
nent experts in the Latin American field. 

11. International Trade Conference. This was held in New 
York, December 7, 1915, under the auspices of the National Asso- 
ciation of Manufacturers. Consideration was given to many im- 
portant topics relating to foreign trade. 



346 EXPORTING TO LATIN AMERICA 

12. Third National Foreign Trade Convention, 1916. This con- 
vention was held in New Orleans, La., January 27-29, 1916. 
It was called by the National Foreign Trade Council, and was 
well attended. Many important phases of foreign trade were dis- 
cussed by experts. A printed copy of the proceedings may be 
obtained from the Secretary of the National Foreign Trade Coun- 
cil, Mr. Robert H. Patchin, 64 Stone Street, New York, N. Y. 

13. Other Meetings. Numerous other meetings have been held 
throughout the United States. Such conferences as the Southern 
Commercial Congress, the Trans-Mississippi Congress, etc., have 
been marked by the presence of distinguished authorities on Latin 
American affairs who have sought to arouse a greater interest 
in the general topic of trade relations and who have emphasized 
the importance of reciprocal business with the southern republics. 



CHAPTEK XXVI 

HOW BUSINESS ORGANIZATIONS MAY AID MANUFACTURERS IN 
LATIN AMERICAN TRADE EXTENSION 

Introduction. — The work of business organizations in Latin/ 
American trade extension is becoming increasingly important. In 
almost every city there are Chambers of Commerce, Business Men's 
Leagues, Manufacturers' Associations, etc., which are either al- 
ready giving practical aid to their members or have under con- 
sideration plans to further the growth of business relations with 
the southern republics. In order to render the most practical 
service, business organizations must standardize their efforts. As 
a first step a trained, experienced man should be employed to 
direct foreign trade development. The value of a business or- 
ganization to its members will be in direct ratio to the practical 
service it renders. Following is a brief outline of the principal 
ways in which commercial organizations can assist their members. 

Bureau of Translations. — There should be maintained a Bureai^^^ 
of Translations. Particular attention should be paid to technical 
translations and the preparation of catalogs suitable for Latin 
America. 

Branch Office of the Bureau of Foreign and Domestic Commerce. 

— Members should be advised of the work of this important Bu- 

reau. They should be shown how to take advantage of the serv- il 
ice in its many phases as outlined in Chapter XXIII. ArrangS-" 
ments should be made with the Bureau of Foreign and Domestic 
Commerce to serve as the branch office of the Bureau in cities 
where it maintains no agent. By this means members can more 
easily obtain the fullest benefit of the government service. 

Bureau of Employment for Foreigpi Trade Positions. — A bureau 
should be established with which applicants for positions as trav- 
elers or local representatives abroad, or as employees in foreign 
departments, may file references. Members should be informed 
of all applicants found reliable and should be requested to send 

347 



348 EXPOETING TO LATIN AMERICA 

to the Bureau applications which they receive but which cannot 
be utilized by them. 
^X^' Assistance in Establishing Export House Connections. — Mem- 
bers should be informed regarding the possibilities of export house 
representation. The association should lend its assistance in mak- 
ing the most advantageous arrangements for foreign sales by this 
means. 

Cooperative Efforts of Groups of Members. — The services of 
commercial associations should be placed at the disposal of mem- 
bers in allied lines of products who wish to appoint joint repre- 
sentatives for a group. An intelligent secretary can be of in- 
valuable aid in suggesting plans. 

Assistance in Making C.I.F. duotations. — A very practical serv- 
ice would be that of helping the members to make proper quota- 
tions, iQcluding the cost of insurance and freight. To those 
members especially who are just establishing trade connections 
such aid would be invaluable. 

Suggestions for Forwarding Shipments. — Members should be 
given the necessary information to forward shipments properly 
and should be supplied with the names and addresses of forward- 
ing agents in the principal ports. 

Files of Latin American Government Journals. — A file of official 
Latin American government journals should be kept. Members 
should be advised of opportunities referred to therein and of bids 
advertised for government supplies. 

File of Latin American Publications in General. — There should 
be maintained complete files of all publications relating to Latin 
America, with particular emphasis on those containing new busi- 
ness opportunities. Such files should include all export, trade, and 
technical journals, magazines featuring Latin America, news- 
papers, and magazines published in Latin America. 

Bureau for Adjustment of Claims. — A bureau for the adjust- 
ment of claims and disputes and to make collections should be 
established. 

Furnishing Banking Information. — Members should be supplied 
with information regarding the best methods of financing for- 
eign transactions, the handling of drafts, the making of foreign 
collections, and the financial conditions in general in Latin 
America. 



HOW BUSINESS ORGANIZATIONS MAY AID 349 

Practical Advice Regarding Foreign Trade Problems. — The 

secretary or person in charge of the foreign trade division of a 
business organization should be in a position to advise members 
regarding the solution of problems constantly arising in the de- 
velopment of foreign trade. This should include correspondence, 
filling orders, packing, marking, preparation of shipping docu- 
ments, invoices, consular invoices, marine insurance, obtaining 
ocean or freight rates, forwarding banking documents, drafts, 
foreign exchange, custom house regulations, tariffs, traveling sales- 
men, taxes, advertising, etc. 

Weekly or Monthly Bulletin. — Members should be supplied with 
a well-edited bulletin containing information regarding Latin 
American trade, reports of trade opportunities compiled from 
various sources, including those appearing in the Commerce 
Reports. 

The bulletin should be modeled after those supplied by the Na- 
tional Association of Commerce, the American Manufacturers' 
Export Association, the Philadelphia Commercial Museum, etc. 

Foreign Patents, Trade-marks and Copyrights. — The Associa- 
tion should furnish information regarding patent and trade-mark 
laws in foreign countries and should be in a position to supply 
the names of reliable agents or lawyers who can properly attend 
to the registration of trade-marks. 

Coordination of All Export Efforts. — The efforts of business or- 
ganizations should be directed toward the coordination of all 
movements for the furtherance of American export trade. This 
should include work of the United States Government, organi- 
zations formed for the purpose of fostering American foreign com- 
merce, commercial organizations generally, the Pan-American 
Union, foreign trade and technical journals, etc. Strong efforts 
should be made to have official recognition accorded intelligent 
efforts to further trade, and to coordinate through governmental 
ofiices the data acquired by all engaged in export trade develop- 
ment. 

Visitors from Latin America. — Commercial organizations should 
cooperate with the proper persons in Latin American countries 
and with their members to obtain advance information of the 
visits of Latin American merchants. 

Entertainment of Visitors. — Visitors from Latin America, par- 



350 EXPORTING TO LATIN AMERICA 

ticularly those interested in making purchases, should be prop- 
erly entertained. Interpreters should be supplied free of charge 
and there should be efforts to make their stay in the community 
agreeable. 

Organization of Groups of Latin Americans. — Whenever possi- 
ble, arrangements should be made for the establishment of social 
organizations of native Latin Americans. Such groups can most 
effectively entertain Spanish-speaking guests by affording them 
opportunities for conversation in their own language. 

Lectures Regarding Latin America. — ^Valuable work in behalf 
of Latin America would be the arrangement for lectures to be 
given by authorities in Latin American history, literature, etc. 

Prizes to Stimulate Interest in Latin America, — An excellent 
means of arousing interest in Latin America is by the awarding 
of prizes to students in schools or universities for essays on topics 
relating to Latin America or for excellence in the study of Span- 
ish or Portuguese. Such prizes should be offered by business 
organizations. 

Payment of Visitors' Expenses. — In connection with the ex- 
ploitation of the commerce of a city, merchants from Latin Amer- 
ica should be informed by printed matter that their fare to the 
city will be refunded upon the purchase of a certain amount of 
merchandise. 

Cooperation with Other Export Organizations. — No opportunity 
should be lost to cooperate in every possible way with all other 
organizations interested in foreign trade development. There 
should be an exchange of bulletins — and of all information gen- 
erally which would be advantageous to the members of the sev- 
eral organizations. 

Cooperation with Business Organizations in Latin America. — 
The most active cooperation should exist between the local business 
organizations and Chambers of Commerce and trade bodies in 
Latin American countries. All matters of mutual interest should 
be fostered, and the furthering of reciprocal advantages should be 
sought. This should especially concern itself with obtaining mar- 
kets for Latin American products. 

Foreign Trade Luncheons. — Luncheons should be held period- 
ically at which the speakers should be men versed in definite 
phases of the export business. Such meetings should be addressed 



HOW BUSINESS OKGANIZATIONS MAY AID 351 

by visiting government officials, consular officers, commercial 
attaches, etc. 

To Foster Foreign Trade Education. — ^Proper instruction for 
foreign trade and the establishment of schools for teaching young 
men this branch of commerce should be encouraged. The addi- 
tion of courses of study by established schools should also be 
urged and "continuation" courses should be advocated. 

Distribution of Literature Regarding a City. — Illustrated book- 
lets, pamphlets, and well-written letters setting forth the advan- 
tages of buying in a particular market should be circulated in 
Latin America. Cards should be inclosed upon which merchants 
may state in what article they are interested, and these requests 
should then be communicated to members. Members who circu- 
late catalogs and printed matter in the Latin American countries 
should be induced to include pamphlets containing a description 
of their city and its advantages. 

Local Offices in Latin American Capitals. — Efforts should be 
made to establish branch offices in the principal capitals. The 
expense of maintaining these offices should be borne either by 
members interested in obtaining trade there or by an association 
whose members generally would be benefited by personal repre- 
sentation. 

Delegates to Foreign Countries. — Advantage should be taken of 
the visits of members or their representatives to foreign countries 
in order that they may be commissioned to represent the local 
body. Much good publicity for the market may be obtained by 
the visits of such representatives to Latin American countries. 

Exchange of Students and Apprentices. — ^Every effort should be 
made to arrange for the entry into local schools of Latin Ameri- 
can students who wish to learn business methods in the United 
States, Similar efforts for the sending of young Americans to 
Latin America should be encouraged. 

Subsidies or Scbolarsliips to Young Men. — To encourage young 
men to adopt foreign trade careers, business organizations should 
arrange traveling scholarships or subsidies to cover the expense of 
such students while in Latin America for the purpose of learn- 
ing the business methods, customs, and language of the people. 
The means of selecting such delegates would be by competitive 
examinations or other tests agreed upon. 



352 EXPORTING TO LATIN AMERICA 

The Dissemination of EeUable News. — One of the concrete ways 
in which business organizations can effectively serve American 
commerce is by obtaining the publication in Latin American news- 
papers of news items that would help to create a better under- 
fitanding of the United States. In these newspapers there is but 
little reliable news concerning this country, and most of the items 
published are to our disadvantage. This service affords a great 
opportunity for fine work and is one in which the intelligent secre- 
tary can render valuable aid. 

Lists of Prospective Buyers, — Carefully compiled lists of names 
of prospective buyers of American manufactures should be sup- 
plied to members. 

Reports on Sales Possibilities. — ^Upon application, reports relat- 
ing to the sale of specific products or manufactures should be 
furnished. When necessary the reports should be specially com- 
piled. 

American Business Organizations in Latin American Countries. 
— Strong efforts should be made to encourage the organization 
of American Chambers of Commerce in the principal Latin Ameri- 
can cities. Such organizations should be composed of American 
residents of those countries and of American commercial firms 
engaged in business there. The object of such associations 
should be: 

^ To promote the interest of American houses in every possible 
way. 

^ To encourage the importation of American goods by all forms 
of propaganda. 
^ To advise American correspondents of business opportunities. 
X To aid American traveling men or the local agents of American 
firms in the location of buyers. 

To assist in obtaining reliable data, trade lists, etc. 
^ To keep members informed of changing trade conditions and 
opportunities. 

\ To establish, if practicable, a display of samples of American 
manufactures. 

% To assist American houses in obtaining accurate translations 
of general or technical catalogs and to help in the revision of 
catalogs already in use, by obtaining the exact terms and mean- 
ings of difficult words and phrases. 



HOW BUSINESS ORGANIZATIONS MAY AID 353 

^ To help obtain local or general agents and to investigate their 
references. 

\^ To submit confidential reports on dealers. 

v\ To intervene in the adjustment of claims. 

^^ To hold arbitrations and to settle disputes. 

\ ^ To assist in collection of accounts. 

. Jf To cooperate with American Consuls by performing services 
which the latter cannot undertake. 
^ To arrange the exchange of students and apprentices who wish, 

^on the one hand, to learn American business ways and customs, 
and on the other hand, to study the methods of Latin American 
houses. 

V 1/ To assist in the dissemination of reliable information and in- 
teresting facts regarding the United States, its policies, and its 
people, and to secure the publication of such articles by the best 
newspapers and journals. 

Subjects Requiring Cooperation. — In the analysis of trade rela- 
tions with Latin America it will be found that certain conditions 
exist which can be adjusted, provided a proper effort is made. 
To this end the closest possible cooperation of all the Latin Ameri- 
can republics with the United States is desirable. Such cooperation 
may take the form of diplomatic proceedings based upon repre- 
sentations of individual commercial organizations in the various 
countries, or upon the work of an International Chamber of 
Commerce. 

Questions to Be Agitated. — Some of the questions which should 
be agitated by individual Chambers of Commerce and commercial 
organizations, the National Chamber of Commerce, and the Na- 
tional Foreign Trade Council are the following: 

1. The establishment of an International American Chamber 
of Commerce. Such a chamber should have permanent quarters 
in the principal Latin American cities, and an active executive 
committee in the principal cities of the United States, with 
branches cooperating through local chambers of commerce. 

2. To standardize classifications, descriptions, measures of value 
and quantity for the purpose of more intelligible customs clear- 
ance. 

3. To arrange the necessary alteration of Latin American laws 
relating to commercial representatives. 



HOW BUSINESS ORGANIZATIONS MAY AID 365 

in many instances the delegations include not only business men 
but also individuals bent on sightseeing. The time is so much 
taken up with affairs in honor of the visitors that the actual com- 
mercial conditions cannot be studied in the short time remaining. 
While the practice of visits to Latin America should be encoi^r- 
aged, far greater results would be obtained were these made by 
individual manufacturers or very small groups who should come 
unheralded in the newspapers, that they might study at first hand 
actual commercial conditions. 

When visits of commercial delegations to Latin American coun- 
tries are planned, notice thereof should invariably be given Ameri- 
can Consuls that they may make proper arrangements for their 
reception. 

An Example of Commercial Organization Work. — As an exam- 
ple of the cooperative work of a business organization with manu- 
facturers in the development of foreign trade, may be cited the 
Export Managers' Bureau of the Business Men's League of St. 
Louis. This was organized March 19, 1915, and the meetings of 
the Bureau, which are attended largely by men who direct the 
details of foreign commerce, include the discussion of the problems 
confronting export managers, the study of conditions affecting 
trade between St. Louis and foreign countries, and a general in- 
terchange of ideas. Consular officers, commercial attaches, and 
experts in foreign trade are invited to address the meetings, the 
purpose being more thoroughly to equip employees placed in charge 
of export departments by various manufacturers. 

An Example of Cooperative Effort. — Another example of co- 
operative effort which is applicable to the Latin American market 
is that of the Illinois Manufacturers' Association. This organi- 
zation arranged with an experienced traveler for the establishment 
of selling agencies and showrooms in Petrograd, Eussia. Because 
of the number of members who agreed to underwrite the plan, the 
cost of initial efforts to win the Russian market was materially 
reduced. 

The Value of Expositions. — During the past decade a number 
of very important expositions have been held in various parts' 
of Latin America, which have been of considerable value in stimu- 
lating trade with the United States. Of especial importance have 
been those in which agricultural machinery and implements were 



356 EXPORTING TO LATIN AMEEICA 

displayed. Trade expositions will have an increasingly impor- 
tant part in the development of business between the United States 
and Latin America. They can be made most effective by permit- 
ting the display of machinery and implements which require 
demonstration in order that the ultimate consumer may have an 
opportunity of seeing their actual workings. Business organiza- 
tions in the United States should keep in close touch with the 
management of such expositions and seek to supply their mem- 
bers with information relative to cost of space, charges for 
entry, etc. 

Cooperative Expositions by Manufacturers. — In this connection 
reference should be made to cooperative exhibitions of American 
manufacturers. As organizations already exist in which the manu- 
facturers of allied lines are coordinated, much may be done in co- 
operative work for the benefit of all the members of a particular 
trade. The chief feature of such work should be the exhibition of 
the products contributed by certain members who are particularly 

^ interested in establishing, a foreign business. Exhibitions could 
be carried from one city to another and opportunity could be given 
for inspection by prospective buyers. While immediate results 
could not be expected, such an exhibition would prove advan- 
tageous. 

The Commercial Museum of Cuba. — Several Latin American 

"^governments have already established expositions and commercial 
museums. For instance, the republic of Cuba, through its De- 
partment of State, has founded in conjunction with the Bureau 
of Information, a Commercial Museum. Manufacturers and mer- 
chants may make a comprehensive study of foreign goods and 
prices. Catalogs and samples of many articles are on file. Manu- 
facturers who wish information may obtain it from the Cuban 
Consul General, 82 Beaver Street, New York. 

T\ A Brazilian Commercial Museum. — The Museo Commercial, the 
great museum of Eio de Janeiro, is administered by the Brazilian 
Federal Department of Agriculture, Commerce, and Industry. 
This government organization maintains a spacious building, cen- 
trally located, of three floors, and desires to make a permanent 
exhibition of American products. The exhibition of samples and 
models is made entirely free of charge, the only expense incurred 
by exhibitors being freight and handling. Catalogs and price lists 



HOW BUSINESS ORGANIZATIONS MAY AID 357 

may be sent for free distribution. Details relative to the museum 
and exhibitions therein are supplied upon request. 

Cooperating with Foreign Bureaus. — There are being opened in . 

many of the principal Latin American cities, commercial bureaus 
with which business organizations and American manufacturers 
may cooperate in the introduction and sale of American products. 
As an example may be cited an institution called the Oficinas de 
Informacion Comercial at Callao, Peru. Its purpose, in part, is 
to bring together American sellers and Peruvian buyers by sup- 
plying information relative to import duties, commercial regula- 
tions, trade-marks, etc. -..^ 

Other organizations of a similar nature are being established 
in many places for the purpose of exhibiting American manu- 
factured articles. Manufacturers, however, before making definite 
arrangements with such enterprises should ascertain, through the 
Bureau of Foreign and Domestic Commerce or its branches, 
whether they are legitimate. If the department is not in position 
to advise immediately, the information can be obtained through 
the Consul in the city where the proposed exhibition is to be / 
held. 

Courses of Reading for Secretaries. — The secretary of a com- 
mercial organization should be thoroughly informed regarding " 
the development of export business and of legislation relative 
thereto. A course of reading will be found of material aid. This 
should include the leading Export and Trade Journals, the pub- 
lications of the Department of Commerce and Labor, including the 
Commerce Reports, books relating to the individual countries, etc. 
Suggestions for such a course will be found on page 474. 

A Suggested Course of Instruction in Export Trade. — One of the 
valuable services which can be rendered by a commercial organiza- 
tion to its members is a course of lectures which deal with thor- 
oughly practical phases of the export business. Some of the prin- 
cipal business organizations have already arranged for stated meet- 
ings of the export managers of their members who exchange views 
on foreign trade. While this is valuable, a plan that will be pro- 
ductive of much practical benefit is that of a series of meetings 
addressed by authorities on the various export problems. The 
address or lecture may be illustrated with stereopticon views and 
informal discussions should follow, with questions from those pres- 



356 IXPORTING- TO LATIN AMERICA 

ent regarding personal problems. A list of possible topics for such 
a course is the following: 

LIST OF TOPICS rOR A SERIES OE LECTURES BY 
EXPERTS IN LATIN AMERICAN TRADE 

Economics op American Foreign Trade 

1. The nature and purpose of foreign trade. 

2. The development of commerce between the United States and 

other parts of the world. 

3. Influence of competition — ^foreign and domestic. 

4. Transportation and its relation to the growth of American 

commerce. 
6. The most desirable markets, present opportunities and future 
possibilities. 

Oeogeaphy as Related to Trade 

1. A study of the natural resources of prospective markets, of 

their inhabitants and economic conditions. 

2. The great trading centers of the world, the routes of trade and 

travel. 

3. The direct and indirect effects of the Panama Canal on Ameri- 

can and world trade. 

4. The influence of geographical conditions generally on industry 

and commerce. 

How TO Study the Problem of Obtaining Foreign Trade 

1. Analysis of European methods. 

2. Analysis of American success in export trade. 

3. The means of obtaining information regarding export trade. 

4. Education and training necessary. 

Methods of Building Export Business 

1. Export commission houses and export agents. 

2. Direct sales to foreign countries by: 

(a) Local and general agents. 

(b) Traveling salesmen. 

(c) Correspondence. 

(d) Advertising. 

8» Organization of an export department and duties of a manager. 



HOW BUSINESS OEGAOTZATIONS MAY AID 359 

Outline op Latin American "Markets from the Commercial Stand- 
point 

1. Mexico, Cuba, West Indies. 

2. Central America and Panama. 

3. West coast South America. 

4. East coast South America. 

Business Methods and Customs of Latin America 

1. Analysis of the population. 

2. The merchants; foreign and native. 

3. The business jwlicies and character of Latin American im- 

porters. 

4. Stores and sales methods. 

Traveling and Local Salesmen 

1. Qualifications of representatives. 

2. Methods of obtaining or developing salesmen. 

3. Arrangement of territory. 

4. The problem of samples, travelers' licenses, etc. 

5. Directing salesmen, remittances, and reports exacted of trav- 

elers. 

6. Suggestions for proper direction of Latin American travelers. 

Correspondence with Latin America 

1. The general character of the correspondence. 

2. The construction of sales letters and the follow-up system. 

3. Problems of Latin American correspondence, short paid jwst- 

age, etc 

4. Introducing Latin American viewpoint and personality. 

5. The filing of letters, card index systems, abbreviations. 

Advertising in Latin America 

1. The use of catalogs, price lists, and circulars. 

2. The need of a well-planned campaign and coordination of all 

sales efforts. 

3. The use of advertising helps and novelties, and their problems. 

4. Magazines, export papers, and newspapers in Latin America ; 

(a) American export journals. 

(b) Technical and trade papers. 

(c) Local newspapers and magazines. 

(d) The preparation of advertisements, etc. 



360 EXPOETING TO LATIN AMERICA 

Proper Packing for Latin America 

1. Packing, as related to transportation and local conditions. 

2. How to determine what packing to be used. 

3. Analysis of port conditions. 

4. How to insure satisfactory packing. 

Freight Eorwarding and Forwarding Agents 

1. Practical requirements in the forwarding of shipments. 

2. The work of forwarding agents. 

3. Analysis of quotations, c.i.f., f.o.b., etc. 

4. The cost and economies of forwarding. 

Ocean Traffic and Shipping 

1. The handling of freight at seaports. 

2. The loading and unloading of vessels. 

3. The basis of ocean freight rates, shipping routes, etc. 

4. The American merchant marine. 

5. Laws affecting shipping. 

The Preparation of Documents 

1. The importance of invoices. 

2. Consular invoices and requirements. 

3. Railroad and ocean bills of lading. 

4. Other documents required in foreign shipping. 

5. The forwarding of documents. 

Credits in Latin America 

1. General credit conditions in the Latin American countries. 

2. How to obtain information. 

3. Collecting open accounts. 

4. Bank credits; drafts, with and without documents. 

5. Collection methods and charged. 

Banks and Financial Conditions in Latin America 

1. General financial conditions in Latin American countries. 

2. Why American banks are needed. 

3. Banking methods in general. 

4. The effect of the Federal Reserve Act in relation to the redis- 

counting of foreign bills. 
§. Opportunities for and effect of American invest^lents^ 



HOW BUSINESS OEjGANIZATIONS MAY AID 361 

Foreign Tariffs and Taxes 

1. The theory of tariffs in Latin America. 

2. Effect of tariffs on importations. 

3. European and American competition in relation to tariffs. 

4. Overcoming tariff law restrictions. 

5. Custom house regulations. 

Marine Insurance 

1. A study of its principles, 

2. The various kinds of marine insurance. 

3. The adjustment of losses. 

4. Need for other than marine insurance. 

Governmental Assistance to American Exporters 

1. The work of the Bureau of Foreign and Domestic Commerce. 

2. The Consular Service. 

3. Commercial attaches, special agents, etc. 

4. The publications of the Bureau. 

5. The work of branch offices. 

Technical Training for Eoreign Trade 

1. Need for training. 

2. The best methods of foreign trade instruction. 

3. The training of employees for export departments. 

4. Obtaining and training salesmen for Latin America. 

History of the Latin American Kepublics 

1. Political history of grouped countries. 

2. Political history of individual countries. 

3. Economic financial-industrial history of individual countries. 

4. Immigration, naturalization, etc. 

Social Development and Conditions 

1. Business and social customs. 

2. Celebration of national, civic, and religious holidays. 

3. Eelation of Church and State. 



CHAPTER XXYII 

THE OPPORTUNITIES FOR YOUNG MEN IN LATIN AMERICA. 
COMMERCIAL EDUCATION FOR FOREIGN TRADE 

Introduction. — Tlie influence of European residents in the Latin 
American republics upon the development of commerce with their 
respective countries has already been pointed out. 

Influence of Resident Americans. — The settlement of Americans 
Tn the southern republics should be encouraged for the sama 
general reasons as those shown in Chapter III. The presence of 
Americans is reflected not only in the demand on local merchants 
for American products but in the use of American machinery, 
appliances, tools, etc. The establishment of American colonies 
brings with it results which can be easily seen in the use of the 
mail order house catalogs. Purchases made 'from the latter prac- 
tically force the importation of American-made articles by local 
merchants, in order to obtain the valuable patronage of Americans 
who are usually in good financial circumstances. 

Possible Fields of Work. — The opportunities for Americans, 
particularly for specialists in all fields of work, are almost unlim- 
ited because of the fact that many of the countries are extremely 
backward and in others the conditions are still primitive. Among 
the possible fields of activity for Americans are the professions, 
such as the law, medicine, dentistry, etc.; the constructive pro- 
fessions, such as engineering, architecture, civil engineering, etc.; 
teaching, business, salesmanship, etc. In the latter field the op- 
portunities are particularly good. The connection of American 
young men with the Latin American institutions is important and 
should be encouraged, as it usually influences the purchase of 
American materials and machinery for use in construction 
work, etc. 

Conditions under Whicli Visits Should Be Made. — ISTotwith- 
standing the fact that young men with specialized knowledge or 
trainiug can find excellent opportunities in almost all of the 

362 



COMMEBCIAL EDUCATION FOR FOEEIGX TRAI)]^ 36S 

twenty Latin American republics, careful analysis of the situation 
should be made before making the journey. This is desirable be- 
cause of the diflficulty of properly establishing oneself, unless ar- 
rangements for a position have been made before departure. 

The opportunities unquestionably exist but capital is almost 
invariably necessary. Those who go to the Latin American repub- 
lics should have ample resources on which to live for at least 
six months or a year while investigating, and not leave the pos- 
sibility of obtaining employment to chance. It is also preferable 
that those who go should have qualified themselves by a course of 
training to cope with the problems which will arise. 

Interest in Foreign Trade Education. — [N'ot only the increasing 
demand for young men to fill responsible positions in Latin Amer- 
ica but also the development of export trade in general has aroused 
a keen interest in the subject of foreign trade education. The 
equipment of young men who are to follow the export business as 
a career is a serious problem. For the most part, the representa- 
tives of American manufacturers who have gone to Latin America 
have had only such training as they have acquired by study, 
reading, and observation. Large manufacturers have been able to 
give a limited training to those who have entered their foreign 
service, but this has been largely education in their business. 

Commercial Education Abroad. — The efiiciency of Germans en- 
gaged in the export business, and particularly as representatives 
of German houses in Latin American trade, has often been referred 
to. This efficiency is not accidental. It is due to a well-thought- 
out plan which has been developed through cooperation by the 
government, the business organizations, and the merchants them- 
selves. It is compulsory for a manufacturer to grant his employees 
sufficient time to attend the continuation schools where certain 
essential instruction in commerce is given. Under the direction of 
experts, schools for teaching young men foreign trade practice have 
been established. 

TIniversity Courses of Study. — The necessity for training in for- 
eign trade has become so essential that several of the leading 
American universities have established courses of instruction. The 
principles underlying commercial practice in foreign countries are 
studied and all the phases of the problem, including the differ- 
ence between export and import trade, are considered. Among the 



364 EXPOETING TO LATIN AMERICA 

universities that have seriously undertaken this instruction are 
Harvard, Yale, Columbia, and New York University. The courses 
include a consideration of the general foreign trade situation, geog- 
raphy, trade organizations, currency, banking and exchange, credits, 
capital investment, shipping, transportation, etc. Other institu- 
tions that are to be included in a proposed government encouraged 
chain of schools are the University of Chicago, Tulane University, 
the University of Cincinnati and Charleston College. On page 545 
is given a list of universities which offer certain courses in con- 
nection with Latin American topics. 

Other Foreign Ttade Education in the United States. — Aside 
from the university courses already referred to, educational efforts 
in foreign trade have been very limited. During the winter of 
1914-1915 several courses of lectures on the general subject of 
export trade were given in New York City. One course was un- 
der the direction of John Franklin Crowell, Ph.D., L.H.D., Edu- 
cational Department, West Side Y.M.C.A. Another was conducted 
under the direction of Prof. Philip B. Kennedy at the Wall Street 
branch of the Extramural Division of New York University. While 
Spanish is being taught to an increasingly large number of pupils 
in many of the high schools of the country, instruction in other 
practical phases of the problem has rarely been attempted. Sev- 
eral informal groups of the managers of export departments of 
business houses have been arranged under the direction of com- 
mercial organizations but no definite course of instruction has 
been provided for. 

The Keynote to Foreign Trade Education. — The keynote to for- 
eign trade education may be found in the efforts now being made 
to increase American exports by coordination. It is reasonable 
to assume that they will soon reach a point of the highest efficiency. 
Advantage should be taken of these efforts to further the cause of 
foreign trade education. Valuable aid and suggestions could be had 
x)t the United States Government, particularly the officials of the 
Bureau of Foreign and Domestic Commerce ; of the Pan-American 
Bureau, which has long been identified with educational work in 
behalf of Latin America; of the National Foreign Trade Council, 
which has recently circularized manufacturers, merchants, and 
educators to obtain a better idea of the actual necessities for for- 
eign trade education; of business organizations such as the Na- 



COMMEECIAL EDUCATION FOR FOREIGN TRADE 365 

tional Association of Manufacturers, the Philadelphia Commercial 
Museum, the Chicago Association of Commerce and similar bodies ; 
of export and trade journals; and of manufacturers who have 
achieved success in the Latin American field. 

Cooperation Between Schools. — By arranging for thorough co- 
operation among the various institutions of learning which under- 
take foreign trade education, instruction could be standardized "^d 
the visits of experts to various cities could be easily arranged. If 
the instruction were planned under the direction of a Commission 
composed of the representatives of all the interests involved, with 
perhaps the addition of the United States Commissioner of Educa- 
tion, the most effective results would follow. 

The Organization of Continuation Schools. — In view of the fact 
that school boards throughout the United States are rapidly in- 
creasing opportunities for technical instruction, there should be 
found means of adopting, to some extent at least, the idea of the 
German continuation schools and adapting them with modifications 
to meet the conditions in the United States. Instruction in such 
schools would necessarily be of a primary character but arrange- 
ments might be made for the attendance during several hours each 
day or during certain days of the week, for a given period, of 
the employees of the exporters who desire to receive the benefits 
of such instruction. Similar work might be done by the business 
colleges who would add to their curriculum special courses in train- 
ing in Latin American business practices. High schools and uni- 
versities in general could arrange courses. All institutions of this 
nature afford excellent means of teaching Spanish and Portuguese. 
They are also well adapted to give instruction in geography, tar- 
iffs, etc. 

The Basis of Instruction for Foreig^n Trade. — Instruction for 
foreign trade should not be confined solely to the technical prac- 
tices involved in the development of an export business but should 
also deal with the larger aspects of the question. Roughly, such 
a course would be based on the following essentials : ' 

1. A practical training in commercial geography. The student 
should be taught the conditions which prevail in other countries. 

2. A study of the commerce of the world. This should include 
analysis of the export statistics of the United States and other 
countries »nd the questions of transportation, trade laws, etc, 



366 EXPORTING TO LATIN AMERICA 

3. The customs and life of foreign peoples. Languages, corre- 
spondence, commercial terms, etc., should naturally be studied. 

4. Concrete problems suggested by the various phases of export 
trade practice should be discussed and opportunities should be 
given the students to hear authorities in the various features of 
this branch of trade. 

5. The methods of doing business, the application of commercial 
and maritime laws and the financing of export trade should like- 
vi^ise be taught. 

6. Export trade in its broader phases including advertising, 
salesmanship, and the development of new markets should be stud- 
ied. On page 358 is a list of subjects which will suggest other 
topics; this can be greatly elaborated. 

Foundation Work for Export Career. — The rapid growth of the 
foreign trade of the United States emphasizes the necessity for 
greater attention to the specialized training of young men for this 
service. Foreign trade practice is becoming so complex that need 
for technical training is daily becoming more insistent. This 
need has long been recognized by the exporters in European coun- 
tries, whose warehouses and offices are constantly developing young 
men. The continuation schools of Germany offer a partial solu- 
tion of the problem of education of the United States for foreign 
trade. However, the work need not be confined to one particular 
plan or institution. Advantage should be taken of the best means 
at hand and educators generally should be impressed not alone 
with the opportunity but also with the duty of giving this 
education. 

The Character of the Instruction That Should Be Given. — In 
order to be of the greatest benefit instruction should be practical 
and should enable the student to cope with the actual problems 
that arise in daily relation with the Latin American countries. 
Advantage could be taken of the instructors attached to those 
institutions which undertake this work, for the teaching of the 
necessary languages and for the general direction of the school. 
The instruction should touch upon every phase of export trade 
from the geographical, economic, and business standpoint. This 
might be a series of lectures given by experts in their particular 
field, recognized authorities, and men who have achieved successes 
ia foreign trade. In addition there should be enlisted the services 



COMMERCIAL EDUCATION FOR FOREIGK TRADE 36'J' 

of the experts of the Department of Foreign and Domestic Com- 
merce, including the agents of the Bureaus in the various cities, 
the Consuls who return to the United States on visits, the com- 
mercial attaches and special agents of the department. The lec- 
tures should be logically developed in order that the student may be 
taught all the essentials of business. 

A Suggested Federal School of Commerce. — It has been sug- 
gested that there be established in Washington a Federal Graduate 
School of Commerce which shall be closely allied with Federal 
agencies and institutions. It is believed that young men desirous 
of preparing for the foreign service would enter such an insti- 
tution to complete their commercial education. This institution 
would fill a particular need and would naturally not conflict with 
other courses of instruction in universities or other institutions of 
learning. The purpose of this institution would be so to educate 
the commercial representatives of the United States that they would 
be able to compete with the representatives of European nations 
who are given unusual opportunities to equip themselves in order 
to cope with the severe struggle for international trade supremacy. 

A Course of Instruction in Foreign Trade. — Under the direction 
of Dr. Edward E. Pratt, Chief of the Bureau of Foreign and Do- 
mestic Commerce (of the United States Department of Com- 
merce), there has been arranged by the Business Training Corpora- 
tion of New York a course of instruction in Foreign Trade. The 
men who cooperate with Dr. Pratt are recognized authorities in 
export trade matters and the course is exceedingly comprehensive. 
It is the plan of the founders of the course to instruct men in 
foreign trade from all standpoints, and arrangements have been 
made to conduct the course through correspondence and by means 
of study groups. Particular attention is given to the application 
of the instruction to concrete problems. The fee charged is thirty 
dollars. The office of the corporation is 185 Madison Ave., New 
York City. 

Haw a Student Can Educate Himself. — It is often impossible 
for a student to take a course of instruction. Nevertheless, by 
application, much can be learned regarding export trade. In the 
Appendix there is given a list of best books and articles that deal 
with Latin American trade in its different phases, and on page 464 
is given a list of books that should be owned by all who require 



368 EXPORTmG TO LATUST AMEEICA 

authoritative works on export commerce. By a careful reading of 
these books much knowledge can be acquired. 

Books Conceming Latin American Opportunities for Young 
Men. — A book recently published is of interest to all students of 
Latin American problems. It "considers in detail the opportu- 
nities, advantages and disadvantages in the professions and in many 
lines of business." It is listed on page 465 of the Appendix. 



CHAPTER XXVIII 
PRODUCTS AND MANUFACTURES SALABLE IN LATIN AMERICA 

Introduction. — ^The following is a list of the principal articles 
adapted to the Latin American markets. It will be readily under- 
stood from the preceding chapters that the conditions governing 
the sale of these articles vary materially in the different countries. 
In a general way, practically all products and manufactures sold 
in the United States can be marketed in at least certain parts of 
Latin America. This applies with particular force to the large 
cities. Market possibilities can only be determined by the analysis 
suggested in Chapter 11. The articles listed below are the prin- 
cipal ones which can be sold to the Latin American countries. 

Advertising Novelties. — The value of advertising as a means to 
increasing business has been widely recognized throughout Latin 
America. The demand for advertising novelties is increasing, par- 
ticularly in the larger cities. Articles of real merit, especially if 
based on a new idea, find a ready sale. In the principal capitals 
there are agents whose efforts are confined to advertising in all 
its branches. 

Agfricultural Implements, Machinery and Plantation Supplies. 
— The manufacturers of agricultural machinery and plantation sup- 
plies are among the pioneers in Latin American trade. The field 
is practically unlimited and the future affords great possibilities. 
The application of more intensive methods of agriculture, the adop- 
tion of modern systems where old customs still prevailed, and the 
wide variety of climates make Latin America a promising field for 
the manufacturers of agricultural machinery and supplies. 

Com planters Corn shellers Cultivators 

Cutters (feed and en- Disk plows Drills (grain) 

silage) Farm tractors Fertilizer dryers 

Earth augers Grain sprouters Grubbers 

Harrows Pasteurizers (for Planters 

Hay tools dairies) Seedore 

369 



370 EXPORTING TO LATIN AMERICA 

Manure spreaders Seed sowers Sprayers 

Sheep shearing naa- Weeders Threshing machinery 

chines Cre'am separators Saw mills 

Grain storage-tanks Windmills Fencing 

Wire stretchers Baling presses Cotton gins 

Beehives Plows Bee smokers 

Foundations Honey boxes Honeycomb 

AnLUsements. — ^Latin America offers a fertile field to the manu- 
facturers of amusement equipment. With an increasing wealth of 
the Southern trade fields will come a larger demand for amusement 
devices. This field can best be studied by personal observation. 

Merry-go-rounds Chutes Swings 

Scenic railways 

Arms, Munition, Powder and Explosives. — ^The primitive condi- 
tions which exist in many parts of Latin America and the need 
of arms and ammunition by hunters and pioneers insure a good 
market for the products of American gun and revolver manufac- 
turers. The demand for powder and explosives generally is large. 
The purposes for which they have been used in the United States 
are duplicated in all their varied forms in Latin America. 

Gun powder Blasting powder Shot 

Rifles Shotguns Revolvers 

Awnings, Tents, Sails and Canvas. — The various manufacturers 
of canvas enjoy a large demand in practically all countries of 
Latin America. The importation of canvas, which is used for 
many purposes, is particularly large, while aivnings are a neces- 
sity because of the tropical sun; the use of tents is also very 
extensive. 

Bags and Bag-ging. — An analysis of the products of Latin Amer- 
ica indicate the necessity for the use of bags and bagging in many 
forms. The chief competitor of the United States has been Eng- 
land but the imports of bags and bagging from the United States 
are large and can be increased. The following are some of the 
principal kinds of bags used : 

Meal bags Salt bags Gunny bags 

Coffee bags Flour bags 



SALABLE PRODTTCTS AND MANUFACTURES 371 

Barbers' Supplies and Furniture. — The increasing demand for 
comfort of all kinds insures a sale for modern barbers' furniture, 
toilet articles, drugs, supplies, etc. A large business is already 
being done by some manufacturers and Latin America offers a 
particularly good field for barbers' supplies. 

\ Bicycles, Motor Cycles, and Accessories. — The success achieved 
by manufacturers of these useful articles indicates the possibilities 
in the Latin American field. This is particularly true of motor 
cycles which are becoming more popular. 

Bicycles Motor cycles Tricycles 

Automobiles, Motor Vehicles and Supplies. — The capitals of 
Latin America are noted for their number of wealthy residents as 
well as for beautiful well-paved streets, which make conditions 
ideal for motor vehicles. The adoption of motor trucks for 
freight handling and package delivery opens another field which 
is only beginning to develop. While conditions in some of the 
countries, because of poor roads, are still unfavorable, the agita- 
tion for betterment is such that the alert manufacturer will find 
it advantageous to watch developments. 

Automobile brake lin- Automobile horns Spark plugs 

ings Automobile lamps Magnetos 

Automobile motors Automobile tires Tire vulcanizers 

Automobile top hard- Automobile clencher Automobile gauges 
ware and trimmings rims 

Automobile trucks 

Billiard and Pool Tables and Supplies. — The Latin Americans 
are very fond of diversions and in almost every community there 
are one or more clubs. In the larger cities are found establish- 
ments devoted exclusively to billiard and pool, while hotels, bars, 
etc., are frequent purchasers. 

Boats and Accessories. — Because of the large number of rivers 
and absolute necessity for water transportation, excellent oppor- 
tunities exist for the sale of launches, motor boats, sailboats, etc. 
This applies to practically every one of the twenty Latin American 
republics, since rivers are found in all the countries and many of 
them are navigably for at least some distance, 



372 



EXPORTING TO LATIN AMERICA 



Canoes 
Rowboats 



Launches 
Sailboats 



Motor boats 
Yachts 



Boots and Shoes. — One of the branches of trade which has shown 
a marked increase in exports is the manufacture of boots and 
shoes. While this line cannot be sold in all of the republics, there 
are splendid opportunities in some of the most important ones. 
The demand for boots and shoes of American manufacture is 
increasing in all the countries except those which have fixed a 
prohibitive tariff thereon. 



Shoes of leather 
Slippers 



Shoes of rubber 
Rubber overshoes 



Shoes of (Canvas 
Galoshes 



Building Material. — ^The architects, contractors, builders, and 
large individual corporations in many of the cities of Latin Amer- 
ica are looking to the United States for their supplies of building 
material. The individual needs of each country must be investi- 
gated, but the following list of items indicates the possibilities 
which exist to a very great extent in practically all of the countries. 



Wall board Sewer pipe 


Waterproofing foi 


Bank fittings Wall paper 


concrete 


Mosaics Cornices 


Floor and wall tiles 


Nails Moldings and carv- 


Cement 


Roofing and shingle ings 


Steel ceilings, side 


tiles Roofing cement 


walls, roofing, etc. 


Steel shelving Building brick 


Ornamental and 


Tile Drain tile 


fancy brick 



Caxri^es, Wagons, and Parts. — The use of vehicles in Latin 
America is very extensive but increasing. While the character and 
methods of transportation are changing, a careful study of local 
needs and requirements will reveal splendid possibilities open to 
American manufacturers. 



Ambulance 
Farm wagons 
Coal wagons 
Surrey a 
Tops 
Bodies 

Carriage rails 
Leather dasl^^s 



Wagon rails 

Military transport 

Buggies 

Phaetons 

Cushions 

Axles 

Pumping wagons 



Delivery wagons 

Carts 

Traps 

Wheels 

Shafts 

Carriage fender^ 

Cane wagons 



SALABLE PRODtJCTS AND MANUFACTtTRES 373 

Cash Regfisters, Adding and Calculating Machines. — The suc- 
cesses achieved by the manufacturers of cash registers is an index 
to the possibilities of Latin America for all sorts of mechanical 
labor-saving devices. Every country affords opportunities, but they 
are particularly bright in the larger republics. 

Cement. — One of the principal imports from the United States 
into Latin America is cement. The demand is due to the vast 
amount of construction, the development of hydro-electric proj- 
ects, and all the other uses for which cement is employed in this 
country. 

Asbestos Portland Furnace 

Coal and Fuel. — One of the results of the European War has 
been an increased importation of coal and fuel from the United 
States. In the past, England and Austria have been depended 
upon largely for coal and other fuel, which have been bought by 
the manufacturers and carriers of Latin America. The growth of 
this trade is dependent exclusively upon meeting competitive 
conditions. 

Men's Clothing. — Certain articles of wearing apparel for men 
are already famous throughout Latin America. The success 
achieved by some manufacturers can be equaled by the manufac- 
turers of other articles if intelligent efforts are made to obtain 
the business. The opportunities exist in practically all the coun- 
tries, and novelties in particular would find a ready sale. Rain- 
coats adapted to the climate. Palm Beach and similar fabrics are 
in demand. 



Suits 


Overcoats 


Waterproof clothing 


Sweaters 


Underwear 


Hosiery- 


Hats 


Caps 


Overalls 


Pants 


Shirts 


Collars 


Cuffs 


Suspenders 


Garters 


Ties 


Handkerchiefs 


Gloves 


Belts 







Women's Clothing. — The women of Latin America have been 
depending in the past on Europe, and particularly Paris, for their 
wearing apparel. By careful studying of market needs and by 



^u 



EXPORTING TO LATIN AMERICA 



supplying novelties and styles suitable to the different markets, 
American manufacturers can easily compete. The opportunities 
for the sale of wearing apparel will naturally grow in proportion 
to the population and the increase in the wealth of the people. 



Dresses 


Handkerchiefs 


Skirts 


Suits 


Coats 


Waists 


Wrappers 


. Waterproof clothing 


Petticoats 


Kimonos 


Dressing jackets 


Underwear 


Hosiery 


Sweaters 


Corsets 


Aprons 


Shawls 


Hoods 


Scarfs 




Gloves 



Cooperag'e. — Many of the industries of Latin America are de- 
pendent upon the use of barrels, casks, etc. Americans, in the 
past, have been depended upon to supply these, and the opportuni- 
ties for the sale of such articles are steadily increasing. 



Barrels 
Kegs 



Casks 
Staves 



Hogsheads 
Shooks 



Chemicals, Drugs, Dyes, Extracts, Pharmaceutical Products, 
Medicines. — The exportation to Latin America of chemicals, med- 
icines, drugs, and pharmaceutical products is very heavy. As they 
have been imported largely from countries most affected by the 
European War, unusual opportunities exist for American manufac- 
turers of these articles. The demand comes from practically all of 
the twenty republics and is worthy of serious study, particularly 
as certain pioneer manufacturers have established a large business 
in many of the Latin American republics. 



Talcum powder 


Hair dye 


Soap 


Cold cream 


Perfume 


Stock and 


Herbs 


Toilet preparations 


remedies 


Dyes 


PiUs 


Calcium 


Carbide 







poultry 



Cordage, Rope, and Twine. — The statistics of exports of the 
United States to Latin America indicate an increasing demand 
for these manufactures. Because of the growth of the industries 



SALABLE PRODUCTS AND MANUFACTUEES 375 

of Latin America in which they are needed, an attractive field is 
open to the American producers. 



Cordage 


Kope 


Cable 


Cotton twine 


Jute twine 


Sisal twine 


Hemp twine 


Wire rope 


Wire cable 



Cotton Piece Goods, Dry Goods, and Textiles. — The opportuni- 
ties for the sale of cotton piece goods, dry goods, and textiles gen- 
erally have often been referred to. Exhaustive reports have been 
made by agents of the American Government and the requirements 
in the various markets have been pointed out. The increase in 
population and the steadily growing demand for wearing apparel 
in all of the countries make this a field worthy of particular 
consideration. 

Woven fabrics # Piece goods Blankets 

Laces Embroideries Trimmings 

Curtains Handkerchiefs 

Drags and Druggists' Supplies,. — Among the pioneers in Latin 
American trade have been the patent medicine manufacturers, 
some of whom have achieved remarkable successes. The demand 
for pharmaceutical products, toilet articles, etc., is such that if 
the individual needs of the countries are carefully studied much 
business can be done. 

Pharmaceuticals Patent medicines Plasters 

Ointments Syringes Hot water bottles 

Electrical Apparatus and Supplies. — The rapid industrial devel- 
opment of the principal Latin American republics and the estab- 
lishment of electrical works in all the countries make for a very 
large sale of electrical apparatus and supplies. Practically every 
appliance of an electrical nature can be sold and the field is still 
in its infancy. 

Transformers Switchboards Panel boards 

Cut-out cabinets Motors Storage batteries 

Carbons Arc lamps Incandescent lamps 



376 EXPOETING TO LATIN AMERICA 



Searchlights 


Sockets 


Transmitters 


Receivers 


Rheostats 


Resistances 


Switches 


Signals 


Attachments 



Engines and Equipment. — ^While manufacturing in most of the 
Latin American countries has not reached a high stage of develop- 
ment, it is nevertheless increasing. In some of the republics the 
opportunities are greater than in others, and as the number of 
manufacturing plants is on the increase the demands for engines 
will show a proportionate growth. Engines are particularly 
used to operate agricultural machinery, small industrial plants, 
mills, etc. 

Locomotives Automatic Corliss 

Fire Gas Gasoline 

Hoisting . Hauling Winding 

Kerosene Marine Portable 

Producer gas Stationary Traction 

Dynamos Motors Boilers 

Kerosene engines Steam engines Hot air pumping en- 
gines 

Fencing and Fencing Material. — In practically all of the repub- 
lics there is a large demand for barbed wire. The use of woven 
wire fencing is increasing, while ornamental and metal fencing has 
long been a feature. There is no doubt whatever that the exporta- 
tions of these articles will increase from year to year. 

Ornamental Metal fence Coiled wire 

Barbed wire Woven wire Wrought iron 

Iron posts 

Fertilizer. — While Latin America is famous for its fertility, the 
steady cultivation of the field makes the use of fertilizer highly 
essential. The increasing demand for fertilizer insures a good 
field, and in certain of the republics the importation is already very 
considerable. 

Ammoniated Concentrated phos- Fish scrap 

Complete fertilizers phates Manures 

Phosphate of lime Phosphate rock Superphosphates 

Bone ash Chemical manures Soda product? 



SALABLE PEODUCTS AND MANUFACTURES 377 

Factory Equipment and Mill Supplies. — Practically all the sup- 
plies, equipment, and machinery needed in American factories can 
be marketed in certain cities in Latin America. The demand for 
factory equipment and mill supplies in general is growing be- 
cause of the increasing number of mills and factories being estab- 
lished. The details and the opportunities can be learned only by 
careful investigation and study of local requirements. 

Leather belting Rubber belting Woven belting 

Chain belting Four mill machinery Ice machinery 

Metal working ma- Aluminum castings Laundry machinery 

chinery Railway steel Brass castings 

Copper castings Drop forgings Bronze castings 

Malleable iron Marine forgings Car forgings 

Dredge forgings Iron forgings 

Locomotive Steel forgings 

Fire Fighting Apparatus, and Supplies. — Although fires in 
Latin America are not as common as in the United States, there 
are certain localities in which the principal material used in the 
construction of buildings has been wood. In those places — in 
fact, generally — there is a demand for greater protection against 
fires and for fireproof materials for construction purposes. The 
manufacturers of fire fighting apparatus and general equipment, 
incluring fire extinguisher, hose, etc., can attain a business whose 
volume will be in direct proportion to their effort. 

Hose Hose fixtures Fire fighting appa- 

ratus 

Funeral Supplies. — The manufacturers of Europe in the past 
have been largely depended upon to supply such funeral supplies 
as have not been manufactured at home. There are in this in- 
dustry many articles which can be sold profitably in many of the 
Latin American countries if proper efforts are made. The field 
is a large one, involving and applying to practically all of the 
republics. 

Caskets Burial cases Grave vaults 

Casket linings Burial garments 



378 



EXPOETING TO LATIN AMERICA 



Glass, Glassware, Chinaware, Porcelain, Pottery, Earthenware, 
Etc. — As Germany has been depended upon by most of the coun- 
tries of Latin America in the past for the bulk of the supplies 
of glass, chinaware, porcelain, etc., the manufacturers of these 
articles will find important markets in practically all of the re- 
publics. The range of prices is very extensive and the demand 
includes all grades, from the lowest to the highest. 



Bottles 


Tumblers 


Glassware 


Window glass 


Plate glass 


Floor glass 


Skylight glass 


Leaded glass 


Ground glass 


Eibbed glass 


Glass shelves 


Chipped glass 


Tableware 


Bottles 


Prismatic glass 


Art glass 


Jars 


Vases 


Carboys 




Graniteware 



Groceries, Provisions, and Food Products in General. — There 
are certain food products, groceries, and provisions which have a 
large sale in the Latin American countries. These include tinned 
meats and vegetables, preserved fruits, condiments, and other spe- 
cialties. In view of the fact that the European countries have 
largely been depended upon to supply these articles, an excellent 
opportunity is now afforded those exporters who study the indi- 
vidual needs of these countries. Conditions differ widely but ex- 
cellent opportunities exist. 



Canned goods 


Meats 


Condensed milk 


Biscuits 


Bread 


Prepared cereals 


Crackers 


Macaroni 


Noodles 


Extracts 


Essences 


Yeast 


Baking powder 


Pickles 


Sauces 


Preserves 


Vinegar 


Cider 


Salt 


Honey 





Hardware, Cutlery Tools, Etc. — Among the pioneers in the 
export trade have been the manufacturers and jobbers of hardware 
and cutlery. Their opportunities in Latin America have been 
enlarged as a result of the European War, inasmuch as many 
of the cheaper grades have heretofore been bought in Germany. 
American manufacturers who will seriously investigate the pres- 



SALABLE PRODUCTS AND MANtJFACTURES 379 



ent opportunities and take advantage, of the situation will be 
able materially to increase their business. 



Bolts 

Butchers' tools 

Cork pullers 

Shears 

Nails 

Household shelf goods 



Cutlery- 
Hardware 
Cherry stoners 
Scissors 
Spikes 
Screws 
Specialties 



Carriage tops 
Hardware novelties 
Ice picks 
Machine tools 
Builders' tools 
Chains 



Heating Apparatus. — Many of the Latin American cities are 
located at such an altitude that climatic conditions closely resem- 
ble those of northerly latitudes. In some of the cities, hotels, 
railroad stations, and public buildings have been equipped with 
heating apparatus, either gas, hot water, steam, or hot air. The 
increasing demand for comforts insures a sale for many of the 
appliances which find such a ready sale in the United States. 



Hot Water 


Steam 


Hot Am 


Boilers 


Furnaces 


Radiators 


Registers 


Pipes 


Yalves 


Gauges 


Cocks 





Hose and Hose Fixtures. — The sale of hose and hose fixtures of 
all sorts is rapidly on the increase. This includes hose made of 
leather, etc., besides the usual fixtures. The uses in Latin America 
are those of the same manufactures in the United States. 



Leather hose 
Fixtures 



Woven hose 
Sprinklers 



Rubber hose 
Sprayers 



Household Furnishings, Utensils, Furniture, Etc. — The Latin 
Americans are already large purchasers of household supplies of 
all sorts. The increasing wealth insures a sale for practically 
every item that is used in American households, particularly of 
the better quality. 



Cooking ovens 
Cots 



Beds 
Bedding 



Flatirons 
Household specialties 



^80 



EXiPORTmO TO LATIN AMERICA 



Lamps 
Lanterns 
Spring:8 
Mantel grates 
Toilet articles 
Coffee grinders 
Mops 



Lamp cord 


Kitchen cabinets 


Mattresses 


Sewing machines 


Stoves 


Refrigerators 


Tinware 


Vacuum cleaners 


Wall paper 


Aluminum ware 


Meat choppers 


Brooms 


Tubs 


"Washboards 




Hammocks 



Instruments: Professional, Scientific, Eta — In Latin America 
advances are being made in the field of science as in the material 
pursuits. For this reason surgical and dentists' instruments which 
are already largely in demand will grow in popularity. The sale 
of other instruments will also increase. The appliances and the 
furniture for hospitals, physicians, and surgeons will meet with 
an increasing sale throughout Latin America. 



Astronomical 

Surveyors 

Barometers 

Clinometers 

Thermometers 



Meteorological 

Taxidermists 

Binoculars 

Calipers 

Chronographs 

Surgical instruments 



Nautical 

Undertakers 

Calibrators 

Calorimeters 

Compasses 



Jewelry, Clocks, Watclies and Silverware. — In this field as in 
many others the importations into Latin America have been chiefly 
from Europe. While this is mainly due to the lack of effort made 
by American producers, there is no doubt that a failure to meet 
the requirements is largely responsible. As Germany has figured 
very prominently in this field, the opportunities for American 
manufacturers are especially bright as a result of the European 
War. 



Rings 


Pins 


Bracelets 


Chains 


Rolled plate 


Plated ware 


Trimmings 







Leather, Hides, and Skins. — ^Many South American countries 
are heavy exporters of hides. They are large importers of finished 
leathers and particularly upper leather suitable for footwear. An 



SALABLE PRODUCTS AND MANUFACTURES 381 

excellent field is afforded in practically all of the countries for 
the products of American tanneries. This applies not only to 
shoe manufacturing in those republics in which it has assumed 
large proportions, but other lines of manufacture in which leath- 
er is used also offer fine opportunities for American exporters. 



Tanned 


Curried 


' Finished 


Rough 


Sole 


Upper 


Morocco 


Colored skins 


Horsehides 


Calfskins 


Kid skins 


Goatskins 


Sheepskins 


Harness 


Carriage 


Trunks 


Bag 


Pocketbook 


Bookbinders 


Furniture 


Glove 


Boot and shoe 


Cut stock 





Leather Goods. — Practically every article that is made of leather 
can be sold to some extent in the Latin American republics. The 
opportunities are in direct ratio to the efforts made, and the field, 
on the whole, is a very attractive one. 



Belts 

Leather aprons 

Garments 

Pocketbooks 



Dog collars 
Washers 
Razor strops 
Purses 



Embossed leather 
Chair seats 
Gloves 



Lumber, Timber, Rough and Planing Mill Products. — Because 
of the scarcity or complete lack of lumber or timber suitable for 
construction purposes American producers have been looked to 
for supplies of these important items. Naturally the conditions 
vary materially and the individual needs of the various countries 
must be carefully studied. 



Logs 


Builders' finish 


Sash 


Doors 


Blinds 


Windows 


Panels 


Flooring 


Squared timber 


Poles 


Cross ties 


Mine timber 


Wheel stock 


Handle stock 


Rough lumber 


Dressed lumber 


Shingles 


Lath 



Machinery and Machine Tools. — It has already been indicated 
in previous paragraphs that the demand for machinery and ma- 



382 



EXPORTING TO LATIN AMERICA 



chine tools of all sorts is on the increase. This demand is not 
confined to one particular variety but includes practically all sorts, 
as the following specifications will indicate. The exports of ma- 
chinery to the Latin American countries during the next fifteen 
years will increase by leaps and bounds. Both hand- and foot- 
power machinery is in demand. Machinery for rice-cleaning, irri- 
gation, and water power is required. 



Bakers 

Brewers 

Cement mixing 

Dynamo electrical 

Excavating 

Hydraulic 

Metal working 

Power transmission 

Oil mill 

Textile 

Boring tools 

Cutting-off 

Grinding 

Key seating 

Slotting 



Boot and shoe 

Brickmaking 

Coopers 

Elevating 

Filtering 

Laundry 

Quarrying 

Road-making 

Paper mill 

Well-drilling 

Turning tools 

Drilling 

Milling 

Planing 



Bottling 

Butchers 

Dredging 

Conveying 

Flour milling 

Mining 

Refrigerating 

Sawmill 

Tanning 

Woodworking 

Broaching tools 

Gear cutting 

Bobbing 

Shaping 



Motion Picture Apparatus, Stereopticon. — Among the earliest 
users of the biograph apparatus were the Latin Americans. The 
demand for films, motion picture machines, etc., will grow in 
proportion to the increase in population, and already American 
films have a fine demand. 



Slides 



Fihns 



Motion picture ma- 
chines 



Musical Instruments. — The people of Latin America are ex- 
tremely fond of music in all its forms. The sale of pianos, or- 
gans, player pianos, etc., is rapidly increasing. Latin America 
offers one of the most fertile fields for the manufacturers of these 
instruments. 



Pianos 

Pianolas 

Phonographs 



Organs 

String instruments 



Player pianos 
Wood instruments 
Brass instruments 



SALABLE PRODUCTS AND MANUFACTURES ^83 

Mining Machinery, Equipment and Supplies. — One of the chief 
sources of Latin American wealth is mining. This industry is 
already conducted on a large scale and all the best methods for 
the extraction of the ore are applied. As the development of min- 
eral bo.dies during the next few years will undoubtedly make for 
an increase in mining, the sale of mining machinery, products, 
and supplies will rapidly grow. While the opportunities are 
greater in certain of the countries than others, the field as a whole 
is a highly attractive one. 

Digging machinery Excavating machinery 

Drilling machinery Gears 

Drop hammers Grease cups 

Ore handling machinery Hangers for shafting 

Shaft hangers Chains 

Hydraulic machinery Rope 

Castings Aerial tramways 

Oils. — The demand for oils increases with the growth of manu- 
facture and the development of the countries. The manufacturing 
is increasing, and as the sale of motors is also becoming very 
heavy, a splendid field is open to the producers of oils. The use 
of oils for illuminating, for food, etc., is also encouraging and 
the outlook is very bright. 

Vegetable oils Com oils Cottonseed oil 

Linseed oil Sesame-seed Peanut oil 

Mineral oils Crude oil Naphthas 

Lubricating Animal oils Hluminating oil 

Lard oil Oleo oil 

Optical Goods. — Among the manufacturers who have success- 
fully introduced their products in Latin America have been the 
producers of optical supplies. There is an increasing demand for 
optical glasses and lenses, and as they are needed in all of the 
countries the field is a large one. 

Spectacles Eyeglasses Lenses 

Opera glasses Frames Cases 

Naval Stores, Pitch, Rosin, Tar. — The growth of commerce with 
Latin America will automatically increase the demand for naval 



384 



EXPORTING TO LATIN AMERICA 



stores of aU sorts. The number of ships, both passenger and 
freight, which sail to Latin American ports is rapidly growing, 
and in addition there is an increasing number of vessels used for 
local freight carrying. Because of this fact the manufacturers of 
naval stores, pitch, rosin, etc., will find Latin America a promis- 
ing field. 



Awnings 


Tents 


Sails 


Boats 


Accessories 


Cordage 


Twine 


Rope 


Turpentine 


Rosin 


Pitch 


Tar 



Paints and Varnishes. — Much of the paint used in Latin Amer- 
ica has heretofore been bought in Europe, Owing to the growing 
wealth of the people, the importation of paint will become greater 
each year. The present is an admirable time to make the initial 
efforts because of the European War. 



Paints in oil 

Kalsomines 

Varnishes 

Lacquers 

Stains 



Ready-mixed 
Pigments 
Shellac 
Liquid 
Carbon black 



Water paints 
Fillers 
Japan 
Hardwood fillers 



Photographic Supplies and Art Materials. — The increasing sale 
of photographic supplies and equipments has been one of the 
features of Latin American trade development. This is another 
industry which will be materially benefited by the growing wealth 
of the people. The demand exists in practically all of the repub- 
lics and manufacturers will find a steadily increasing demand for 
their products. 



Cameras 


Lenses 


Films 


Plates 


Developers 


Pastels 


Canvas board 


Oil Colors 


Water colors 


Brushes 


Crayons 


Palette knives 


Picture frames 


Moldings 





Printers' Supplies, Materials, Etc. — One of the greatest successes 
in the Latin American field has been achieved by a combination 



SALABLE PRODUCTS AND MANUFACTURES 385 

uf manufacturers of printers' supplies. Heretofore Europe, and 
particularly Germany, has been depended upon for these sup- 
plies; hence the outlook is even greater than in the past. 

Machinery Presses Paper cutters 

Typesetting machines Paper rulers Perforators 

Staplers Embossers Rides 

Railway Equipment and Supplies. — The railways and street cars 
in many Latin American countries have been supplied by Ameri- 
can manufacturers. The transportation facilities are being ex- 
tended; hence the development of the countries will be reflected 
in an increasing demand for railway material. In thig field the 
opportunities are among the most promising. 



Rails 


Frogs 


Switches 


Locks 


Turntables 


Passenger care 


Freight cars 


Parts 


Fittings 


Signal apparatus 







Plumbing: Material and Sanitary Supplies- — The effect of Amer- 
ican sanitary methods has been felt in an increasing demand for 
an installation of modern plumbing in practically all of the Latin 
American countries. Because of the general backward conditions 
in methods of sanitation, the outlook is most promising. Large 
sales of plumbing materials to every Latin American country are 
assured. 



Bathtubs 


Lavatory fixtures 


Sinks 


Tanks 


Pipe 


Valves 


Washers 


Basins 


Faucets 


Pipe connections 


Rubber goods 





Refrigerators, Water Coolers, Etc. — Although in many places in 
Latin America ice is still a luxury and the duty on refrigerators 
is very high, in certain of the republics the opportunities for their 
sale are very bright. With the increase in wealth will come an 
insistence upon greater comfort, and this applies with particular 
force to the demand for ice. In this, as in many of the other 



386 S:XPOETING TO LATIN AMERICA 

branches of trade, it is highly important to make investigation of 
the individual needs of the countries. 

Roofing Materials. — Within the last few years the demand for 
patent roofing has rapidly increased. Manufacturers of prepared 
roofing will find an excellent field in many of the countries, but 
because of the great variety of climates, the need for the study of 
local requirements is perhaps greater than in most lines. Con- 
scientious, sincere efforts will be crowned with success. 



Patent roofings 


Asphalt 


Asbestos 


Cement 


Felt 


Paper 


Gravel 


Pitch 


Slate 


Tile 


Tin 


Corrugated iron 


Steel sheets 







Rubber Goods. — Although much of the rough rubber of the 
world comes from South America, articles of which it forms the 
basis are not produced in Brazil or Peru. As a consequence a 
splendid field exists for American producers of rubber goods of 
all sorts. 



Bags 


Balls 


Blankets 


Bottles 


Brushes 


Bulbs 


Caps 


Corks 


Erasers 


Funnels 


Gloves 


Mats 


Sheets 


Tubing 


Life preservers 



Safes and Vaults. — The demand for safes has been largely sup- 
plied from Europe but within the last few years many safes and 
vaults have been shipped from the United States. The require- 
ments of different sections vary greatly but on the whole the out- 
look for the sale of safes is bright. 

Scales, Balances, and Weighing Machines. — Among the pio- 
neers in Latin American trade have been the manufacturers of 
scales and balances. By adapting their products to local require- 
ments, particularly as regards the metric system, they have made 
rapid headway. A considerable business can be done in this 
important line. 

Automatic weighing machines Computing weighing machines 

Scales Slot weighing machines 

Balances 



SALABLE PRODUCTS AND MANUFACTURES 387 

Sewing Machines and Parts. — Perhaps one of the most remark- 
able successes in the export field has been won by a large sewing 
machine company. The demand for sewing machines can be 
measured only by the increase of population and the outlook for 
a continued sale is very promising. 

School Supplies and Equipment. — The educational facilities in 
most of the Latin American republics are still very primitive.. 
The example set by certain of the more progressive countries 
points to the extension of education in the other republics and 
this will be to the advantage of those American manufacturers 
who undertake a careful study of the situation. Of this field it 
may be said that the opportunities are practically unlimited. 

Scientific and Medical Supplies. — Among the best opportunities 
for American manufacturers are scientific and medical supplies. 
A number of Latin American students at American institutions of 
learning finish scientific courses yearly. As many return to their 
own countries to practice, the demand for scientific, medical, and 
surgical equipment increases. An unusual opportunity exists at 
the present time, since Germany has heretofore supplied most of 
the surgical and other apparatus. Dental supplies already have a 
large sale and the demand will naturally increase. 

Dental instruments and supplies Architectural supplies 

Surgical instruments and appliances Optical goods 

Soap, Washing Powder, Grease, Candles, Etc. — The manufac- 
ture of candles and soap is carried on in practically all of the Latin 
American countries. The stearin which is largely used has been 
almost exclusively imported from Germany. The better grades of 
soap, candles, etc., are imported largely from Europe and the 
L^nited States; therefore the field for American manufacturers is 
very bright. 

Grease Tallow Soap 

Sugar Mill Equipment and Supplies. — One of the chief indus- 
tries of Latin America is the cultivation of sugar and the sale 
of its by-products. An important item in American exports has 
been equipment for sugar mills, and as the area devoted to the 



388 



EXPORTING TO LATIN AMERICA 



raising of sugar will increase in proportion to the increase of popu- 
lation, manufacturers of sugar mill machinery and supplies are 
afforded an additional field. 

Spirits, Wines, Malt Liquors, Mineral Waters, Etc. — It is 
widely known that wines and liquors have a large demand in Latin 
America. Heretofore they have been bought principally in Eu- 
• rope and this has especially been the case with beer. The Euro- 
pean War opens new possibilities for American manufacturers 
whose opportunities for sales in Latin America are very large. 



Beer 


Brandy 


Gin 


Liquors 


Cordials 


Rum 


Whisky 







Sporting and Athletic Goods. — The introduction of sports and 
games into Latin America insures an increasing demand for the 
sporting articles and appliances. Hunting, fishing, etc., are very 
important in Latin America and the need for articles used therein 
is rapidly growing. 



Baseball 

Tennis 

Gymnasium supplies 

Rowing supplies 



Bowling 
Golf 

Dumb-bells 
Sporting uniforms 



Football 
Fishing tackle 
Punching bags 
Skates 



Stationery, Office Supplies, Stationers' Goods, Etc. — The intro- 
duction of modern methods and the adoption of time-saving ap- 
pliances has marked the development of Latin American trade. 
Because of , this fact the manufacturers of office supplies of all 
sorts and business equipment in general find in Latin America 
a field in which their opportunities will grow in proportion to the 
development of the country. The business already being done is 
large, but susceptible of further development. 



Writing paper 


Envelopes 


Carbon paper 


Blank books 


Ledgers 


Blotting paper 


Pens 


Pencils 


Chalk 


Crayons 


Ink 


Inkstands 


Desk pads 


Erasers 


Clips 


Fasteners 


Index cards 


Playing cards 


School supplies 


Typewriters 


Ribbons 


Cleaning tools 







SALABLE PRODTTCTS AHD MANUFACTIJBES 389 

Store Fixtures. — One of the most promising fields for American 
manufacturers of certain goods is that of store fixtures. The shops 
of Latin America are being rapidly modernized and store fixtures 
and equipment of the most effective Sorts are being sought by the 
progressive Latin American merchants. This is a field which 
should be carefully cultivated, as the opportunities are greaiw-dJ 



APPENDIX 

SOME FEATURES OP THE LATIN AMERICAN CLIMATES 

Rainfall. — It is a peculiarity of the wet season in many of the 
Latin American countries that the heaviest rains fall late in the 
afternoon or early evening. The days often open very beautifully, 
while clouds gather and become so charged with moisture that a 
storm breaks in the afternoon. In the uplands the sun, because 
of the latitude, is often extremely hot, though the temperature may 
be far less in the shade. For this reason its full glare should be 
avoided, the quick changes from shade to sun being very treacher- 
ous. During the dry seasons the days are hot with heavy winds 
which are charged with dust. Many experienced travelers prefer 
the wet months, as the nights are usually pleasant and the mornings 
most delightful, while engagements can be made quite definitely be- 
cause of a foreknowledge of . the rainfall which usually begins at 
a certain hour daily. 

THE SEASONS IN LATIN AMERICA 

Argentina. — Northern part. Two seasons characterize that portion 
of the republic lying north of Bahia Blanca; the rainy season 
from October to March ; the dry season the balance of the year. These 
are more marked in the interior than along the Atlantic Coast. 

Southern part. The seasons are about the same but there is less 
rainfall than in the north, and it is far more evenly distributed. 
Spring, as known in the United States, begins in Buenos Aires, 
September 23; summer, December 21; autumn, March 20; winter, 
June 21. 

Bolivia. — In the temperate belt, including the western plateau and 
the Cochabamba plateau, there are four seasons — spring from Septem- 
ber to November; summer, December to February; autumn, March 
to May; winter, June to August. In the other portions of the 
republic there is not much change during the year. In the extreme 
elevations it is always cold; in the lowlands, hot. The seasons 
are better known as the wet and dry, the wet occurring from Decem- 
ber to May, the dry the balance of the year. 

Brazil. — There are two seasons, wet and dry. The latitude deter- 

390 



APPENDIX 391 

mines the opening of the seasons, beginning much earlier in the 
south than in the north. The rainy season is as follows: between 
Rio Grande do Sul to Sao Paulo, from October to April; in Rio de 
Janeiro, November to May; Pernambuco, March to August; Maran- 
hao, December to June; Para, January to June. Inland, the wet 
season begins later, generally continuing from December to May 
in the Amazon Yalley; at Manaos the heaviest rainfall is between 
April and June. 

Chile. — Because of the extreme length there are three geographical 
divisions, the northern, the central, and the southern, which influ- 
ence the seasons. In the extreme north there is almost no rain 
and in the central division the rainfall is moderate. In the south 
the rainfall is excessive. The seasons in Chile are the reverse of 
those in the United States, winter beginning in June and summer 
in December. 

Colombia. — The republic of Colombia has four seasons, two wet and 
two dry. The wet seasons include the months of April, May and 
June, and October, November, and December, these being periods 
when the sun is at its highest. The dry seasons represent the inter- 
vening months. This applies practically to the entire republic, but 
particularly to the interior plateaus. 

Ecuador. — There are two seasons, the dry or summer from June to 
December, the wet or winter from December to May. During the 
summer the winds are hot and dry. During the wet the heat is 
intense, but there are heavy storms and great precipitation at night. 
This applies, of course, to the coast, while on the uplands, especially 
Quito, the seasons are not as definitely defined as at the seaboard. 

Paraguay. — There are four seasons: winter, June, July and Au- 
gust; spring, September, October and November; summer, Decem- 
ber, January and February; autumn, March, April and May. This 
applies practically to the entire country. During the summer months 
the rainfall is heaviest; during the winter it is less. The precipita- 
tion is fairly well distributed through the year. 

Peru. — There are two fairly well marked seasons — winter, from 
March to October; summer, November to April. The rainfall differs 
greatly in the three sections of Peru. The coast region west of the 
mountains, temperate; the plateaus and elevations, dry and cold; 
the forest regions, warm and moist. During the summer months 
in the plateau regions the rainfall is comparatively heavy. The rain- 
fall in the other portions of the country varies materially. 

Uruguay. — There are four seasons : winter, June, July and August ; 
spring, September, October and November; summer, December, Janu- 
ary, February; autumn, March, April, May. Because of its latitude 



392 APPENDIX 

and the mildness of the climate, only two seasons are generally recog- 
nized: the cool season, from May to October; the warm season, from 
November to April. The mean annual temperature differs only 
about 8 degrees. During the summer the winds which prevail 
in the interior blow steadily; during the cool season not quite 
so regularly. On the seacoast the pamperos, which are southwest 
winds, blow most frequently during the summer, frequently accom- 
panied by heavy downpours of rain. 

Venezuela. — There are two well recognized seasons — ^the dry season, 
November to March; the rainy season, April to October. In the 
interior the rainy season is longer than on the coast where it is 
but four months long. May to August. 

Cuba. — There are two seasons — the dry extending from November 
to April; the wet from May to October inclusive. The temperature 
during the wet period is hotter than during the dry. More than 
two-thirds of the rainfall occurs during the wet period. Storms 
are more frequent during the autumn than at any other time, and 
especially so in the months of October and November. 

Haiti. — There are two seasons — wet and dry. At Port au Prince 
the rainy season lasts from April to October. In other portions 
of Haiti there is a slight variation, but the rainfall is general 
throughout the island. The dry season is from November to 
March inclusive. 

Santo Domingo. — The seasons are practically those of Haiti — wet 
and dry. The rainy season begins in April and ends in October. 
The dry period extends from November to March inclusive. The 
rainfall is quite general. 

Central America 

Costa Rica. — There is a* wide difference in seasons in the different 
parts of Costa Rica because of the configuration of the republic. 
On the Pacific Slope the wet season may be said to last from April 
to December. During June there is a curious phenomenon — a ten- 
day dry period. Towards the Atlantic Coast the rain occurs during 
the dry months. The dry season or winter, in Costa Rica, lasts from 
December to February. 

Nicaragua. — There are two seasons — wet and dry. The wet in- 
cludes the months from May to November inclusive. This applies to 
the Pacific Coast. In the district influenced by the Caribbean, the 
wet season extends from June to December. The dry season lasts 
during the balance of the year, January to May. 

Uor^^'Wro^' — There are two seasons — ^wet and dry. The wet lasts 



APPENDIX 393 

from May to November, the dry from November to May. The great- 
est rainfall is along the coast where the temperature is most 
oppressive. 

Salvador. — There are two seasons — the wet or winter, and the 
dry or summer. The rainy season extends from May to October, 
the dry from November to April. During July and August there 
are high winds. During September and October the rain is con- 
tinuous, although not very heavy. 

Guatemala. — There are two seasons — ^the rainy and the dry. The 
first begins, in the interior, in May and extends to October. On the 
coast it sometimes lasts until December. The dry period lasts 
from November to April. 

Panama. — There are two seasons — the wet and the dry. The 
wet lasts from April to December 15, the dry from December 15 to 
April 1. Eighty-five per cent, of the rainfall occurs during the wet 
season. During the other period it is fairly dry and dusty. 

Mexico. — Because of the configuration of the country, there is no 
marked seasonal division. Generally speaking, there is a rainy and 
a dry season. The rainy season generally begins in June and lasts 
until October. The rain is not continuous. It usually begins late in 
the afternoon, falls for several hours, and then the atmosphere 
becomes clear. In some portions of the republic rain occurs during 
the dry season. Along the coasts, especially the southern Gulf shore, 
there is a second rainy season during January and February. In 
other places along the Gulf coast and slopes which face the coast, it 
is never entirely dry. 



A DETAILED DESCEIPTION OF THE LATIN AMERICAN 
REPUBLICS FROM THE COMMERCIAL STANDPOINT 

INTRODUCTION 

The following brief summary of conditions in the various republics 
of Latin America will be found useful to the reader. The resume of 
the foreign commerce, the debt, railways, etc., afford means of an in- 
teresting comparison between the various countries. 

THE REPUBLIC OF ARGENTINA 

Language. — Spanish. Newspapers are published in Buenos Aires in 
Spanish, French, German, Italian, and English. 

Currency. — Gold peso — 100 centavosni:$0.965. Paper peso is con- 
vertible at 44 per cent of its f aca value, making it worth $0.4246. The 



394 



APPENDIX 



gold peso is designated by the sign $0/3, the o/s standing for oro 
sellado (coined gold). The paper peso is designated by $c/l or 
$m/n, the c/1 standing for curso legal (legal tender) and m/n for 
moneda nacional (national money). Sometimes the abbreviations 
o/s, c/1 and m/n are placed before the $, as o/s$, or they may 
follow the figures, as $500 o/s. 

Weights and Measures. — Metric system. 

Postage. — Postal Union rates. No parcel post arrangement with 
United States. 



Area Square Miles 



Population 



Population Per Square Mile 



1,139,196 



8,700,000 



7.64 



Year 



Foreign Commerce 
Total Imports Imports from United States Total Exports Exports to United States 



1912 



Dollars 
406,805,000 



Dollars 
59,862,000 



Per Cent. 
14.7 



Dollars 
466,582,000 



Dollars 
22,093,000 



Per Cent. 
4.7 



Imports 



Exports 



Per Capita 
Revenue Expenditure 



Debt 



Interest 



Dollars 
46.76 


Dollars Dollars 
53.63 20.65 


Dollars Dollars 
20.70 84.18 


Dollars 
4.12 


Length of Railways 


Telegraphs 


Railroads 


Telegraphs 



Date 



Miles 



Date 











Length 


Length 


Miles 


Miles 


Per 10,000 


Per 1,000 


of Line 


of Wire 


of 


of 


Inhabit- 


Square 


per 10,000 


per 10,000 


Line 


Wire 


ants 


Miles 


Inhabit- 
ants 


Inhabit- 
ants 



1914 21,909 1913 45,272 142,104 25.2 



19.2 



52.0 



163.3 



Year 



Revenue and Expenditure 

Revenue Expenditure 



Funded 



Dollars 
1914 ■ 179,637,000 

Debt 
Unfvmded, Including 
Floating Non-interest- 
bearing, Etc. 



Dollars 
180,091,000 



Total 
in U. S. 
Currency- 



Rates Interest and 
of Other Annual 
Interest Charges 



Currency Amount Currency Amount Dollars Per Cent. Dollars 

£SterUng 135,260,000 Pesos, gold 3,095,000 732,398,000 4-6 35,818,000 

Pesos, paper 167,619,000 



Location, Area, Physical Characteristics. — The Republic of Argen- 
tina is in size the third largest of the American republics. It is 
bounded on the north by Bolivia and Paraguay, on the east by Brazil, 
Uruguay and the Atlantic Ocean, on the west by Chile. Because of its 
great length, about 2200 miles, its climate and products range from 
the tropical to the arctic. The area is about 1,139,400 square miles, 



APPENDIX 395 

The physical characteristics of the country are generally vast plains. 
The western part of the republic is broken by the Andes Moun- 
tains with numerous gigantic peaks. There are also many very 
fertile valleys which afford splendid grazing. The river system is 
extensive with 1000 miles of waterways. The climate varies greatly, 
the northern part of the country being hot and moist. The extreme 
southern regions are very cold, the eastern regions are temperate, 
while in the west the temperature varies according to altitude. The 
mean annual temperature of Buenos Aires is 61 degrees, ranging 
between 28 and 103 degrees. In the northern part the temperature 
often reaches 190 degrees, while in Tierra del Fuego the mean tem- 
perature is about 42 degrees. 

Population. — The population of Argentina (estimated 1911) is 
7,200,000. The largest percentage of the native population consists of 
the mixed or Mestizo. There are about 30,000 pure Indians. Among 
the foreigners the Italians predominate, with the Spaniards a close 
second, and there are many thousand French, Russians, Servians, 
Austrians, Germans, English, and Brazilians. 

Purchasing Power. — The purchasing power of Argentina has been 
rapidly increasing. As the exports are large and the country ex- 
tremely productive, opportunities exist for American manufacturers 
in the supplying of practically every variety of merchandise and 
manufactures which can be sold in the United States. The range 
of prices and qualities is very large. 

Railroads and Transportation. — Argentina is well served by rail- 
roads but especially in the central portion. The total number of 
miles is about 21,000, of which 3,100 are owned by the State, the 
balance by private corporations. The miles of roads of broad 
gauge are 13,000, standard gauge 1,700, narrow gauge 6,300. There 
are numerous steamship lines to the principal ports and an ex- 
cellent river steamship service into Uruguay, Paraguay, and west- 
em Brazil. 

Resources. — The chief resources of Argentina are agricultural and 
the exports consist principally of food products. In 1914 the exports 
totaled $470,000,000. Of agricultural products, corn amounted to 
$109,000,000, wheat and flour $107,000,000, linseed $48,000,000, oats 
$20,000,000, bran $4,000,000. Of animal products the total was 
$166,000,000, of which beef and mutton amounted to $42,000,000, wool 
$45,000,000, hides and skins $43,000,000, miscellaneous animal prod- 
ucts $6,000,000, tallow and grease $10,000,000, manufactured prod- 
ucts $8,000,000, live stock $10,000,000, forest products $10,000,000, 
consisting mainly of quebracho logs and extracts. 

Industries. — While Argentina is noted for its agricultural re- 



396 APPENDIX 

sources, the number of industrial establishments has increased in 
fifteen years about 33 per cent. The principal industries are boot 
and shoe factories, saw mills, brick, tile, and cement factories, manu- 
factures of iron products, meat refrigerators (frigorificos), forestal 
manufactures. The most important industry is that of the chilled 
meat establishments. The manufacture of dairy products is also 
increasing but the republic is essentially agricultural, not manu- 
facturing. 

Mining. — The mining development of Argentina has not been 
important although mineral deposits have been found in the Andes 
Mountains, and oil has also been discovered in the southern part 
of the country. 

The Principal Cities. — The principal cities of Argentina are as 
follows: Buenos Aires, population 1,439,518; La Plata, population 
106,382, 30 miles southeast of Buenos Aires; Bahia Blanca, 72,706, 
530 miles by sea southeast of Buenos Aires; Eosario, 214,000, 214 
miles northwest of Buenos Aires; Cordoba, 100,000, 432 miles north- 
west of Buenos Aires; Tucuman, 78,965, 720 miles northwest of 
Buenos Aires; Mendoza, 60,000, 647 miles west of Buenos Aires; 
Santa Fe, 48,600, 299 miles northwest of Buenos Aires; Salta, 
40,000, 996 miles northwest of Buenos Aires; Jujuy, 20,000, 1006 miles 
northwest of Buenos Aires ; San Juan, 15,000, 745 miles northwest of 
Buenos Aires; San Luis, 14,000, 485 miles west of Buenos Aires. 

The Best Method of Canvassing the Republic. — ^For commercial 
purposes, the republic must be divided into several zones. While 
Buenos Aires naturally overshadows all the rest of the republic and is 
also the largest city in South America, there are many other important 
business places. The first city to be visited is, of course, Buenos 
Aires and the manufacturer who seeks to establish relations in 
Argentina will find it most advantageous to make this a basic 
point. From Buenos Aires trips can be made to the southeast. 
La Plata and Bahia Blanca; and to the northwest (via Eosario), 
Santa Fe, Tucuman, Cordoba, and Mendoza. When the obtaining 
of business depends upon local agencies these may be advantageously 
established as follows : Buenos Aires, Bahia Blanca, Eosario, Cordoba, 
Tucuman, and Mendoza. These are the most important strategic 
points, and not only the business interests of the merchants in the 
cities mentioned, but in the adjacent territory, can best be served. 

Articles Most Needed. — One of the chief opportunities for Anjeri- 
can manufactures in Argentina is the sale of those products which 
in the past have been bought largely in Europe but particularly in 
Germany, Austria, and Belgium. Among the more important 
products which are salable in Argentina are the following: beer. 



APPENDIX 397 

hardware, cutlery, tools, seed, electrical apparatus, dynamos, but- 
tons, toilet articles, chemicals, safety matches, ties, paper, woolen 
manufactures, paint and oils, autos, iron beams, book paper, cotton 
hose, iron and steel, wire iron parts, machinery, earthenware, glass- 
ware, stoneware, galvanized pipes, steel rails, watches. 

ARGENTINA 

Foreign Commerce in Values 

Imports Exports Total 

1912 «373,307,865 $465,979,518 $839,287,383 

1913 408,711,966 468,999,410 877,711,376 

1914 263,663,363 338,776,517 602,439,880 

Dittribution of Foreign Trade (four principal commercial countries) 

Per cent. Per cent. 

Imports of whole Exports of whole 

191S 

United Kingdom $126,959,989 31.1 $116,756,777 24.9 

Germany 69,172,279 16.9 56,178,368 12.0 

United States 60,171,867 14.7 22,207,965 3.0 

France 36,933.537 9.0 36,586,981 1.2 

19H 

United Kingdom 89,700,441 34.0 J)9,084,941 29.2 

Germany 38,796,249 14.8 29,809,479 8.8 

United States 35,585,913 13.4 41,680,985 12.3 

France 21,721,747 8.2 19,372,480 5.7 



THE REPUBLIC OF BOLIVIA 

Language. — The laws and official records of Bolivia are kept in 
Spanish and it is the language of the educated people and polite 
society, as well as the business classes. 

Currency. — Boliviano — 100 centavos=$0.389. 

Weights and Measures. — Metric system has been adopted. Old 
Spanish weights and measures are commonly used in the retail trade, 
among them being the vara, 32.91 inches; quintal, 101 pounds; and 
arroba, 25.36 pounds. 

Postage. — Postal Union rates. Parcel post with United States. 

Area Square Miles Population Population Per Square Mile 

708,195 2,268,000 3.20 

Foreign Commerce 
Year Total Imports Imports from United States Total Exports Exports to United States 



Dollars 
1913 21,358,000 


Dollars 
1,900,000 


Per Cent. 
8.9 


Dollars 
36,551,000 


DoUars 
218,000 


Per Cent. 
6 


Imports 


Per Capita 
Exports Revenue Expenditure Debt 


Interest 





Dollars Dollars Dollars Dollars Dollars Dollars 

9.42 16.12 3.70 4.23 8.54 ,74 



398 

Length of Railways 


APPENDIX 

Telegraphs Railroads 


Telegraphs 


Date Miles Date 


MUes Miles Per 10,000 Per 1,000 

of of Inhabit- Square 
Line Wire ants Miles 


Length Length 
of Line of Wire 
per 10,000 per 10,000 
Inhabit- Inhabit- 
ants ants 



1913 



895 



1912 3,811 5,562 



3.9 



1.3 



16.8 



24.5 



Year 



Revenue and Expenditure 

Revenue Expenditure 



1914 


DoUars 
8,392,000 

Debt 


Dollars 
9,589,000 




Funded 


Unfunded, Including 

Floating Non-Interest- 

bearing. Etc. 


Total 
in U. S. 
Currency 


Rates Interest and 
of Other Annual 
Interest Charges 


Currency Amount 
BoUvianoa 41,650,000 


Currency Amount 
Bolivianos... 8,101,000 


Dollars 
19,369,000 


Per Cent. Dollars 
3-10 1.688.000 



Location and Area. — The republic of Bolivia is the third largest 
of the South American countries. The area is about 708,000 square 
miles. It is bounded on the north and east by Brazil, on the south 
by Paraguay, the Argentine Republic, and Chile, and on the west 
by Chile and Peru. 

Physical Characteristics. — The chief physical characteristics of 
Bolivia are the mountain ranges of the Andes, the high tableland 
or plateau, as it is known, while in the eastern part there are vast 
forests and grassy plains. Because of the location and varying 
altitudes, there are many climates, ranging from the hot lowlands in 
the eastern section to the temperate plateau regions and the colder 
regions at all the elevations in excess of 13,000 feet. The tempera- 
ture in the temperate region averages fifty-five degrees while in the 
lowlands the temperature is that of the tropics. The district in 
which is located the city of Cochabamba has the most pleasant cli- 
mate. 

Population. — The population of Bolivia, estimate of 1915, is about 
2,270,000 or about 3.20 to the square mile. The inhabitants consist 
largely of Mestizos, although there are several hundreds of thousands 
uncivilized Indians. The number of higher classes is in the neighbor- 
hood of 700,000. 

Purchasing Power. — The upper classes in Bolivia are limited in 
number, but the importations are relatively high and the wealth of 
the country is increasing. Although the requirements of the lower 
classes are not great, the total of staple imports is large. Because 
of the exploitations of the mineral wealth and the development of 



APPENDIX 3dd 

the agricultural resources of the country, Bolivia offers a promising 
field for American manufacturers. 

Resources. — The resources of Bolivia are chiefly mineral, but 
agriculture is receiving increasingly more attention. In the lowlands 
there are found the products of the tropical regions, including rubber, 
hard wood, tropical fruits, etc. Among the chief agricultural prod- 
ucts of Bolivia may be cited rubber, cocoa, cinchona bark, from which 
is made quinine and coffee. The output of wool is on the increase and 
cattle raising is receiving more attention in the pastures of the 
eastern and southern parts of the republic. 

Mining. — Bolivia is famous for its output of silver, tin, and 
copper, but particularly of silver, the republic being one of the 
largest producers of this metal, as of tin also. The mines of Potosi 
have been famous since the sixteenth century and have yielded ore 
whose value is in excess of $3,000,000,000. With the extension of 
railroad facilities, the wealth of the republic will be more easily 
exploited, as it is now greatly hampered because of the difficulty of 
access. 

Principal Cities. — The principal cities of Bolivia are the following : 
La Paz, population 78,856; Sucre, population 23,416, 385 miles from 
La Paz; Cochabamba, population 24,512, 279 miles from La Paz; 
Oruro, population 20,670, 152 miles from La Paz; Potosi, population 
23,450, 90 miles from Sucre; Santa Cruz, population 20,535, 694 miles 
from La Paz. 

Best Method of Canvassing the Republic. — The chief center of busi- 
ness in Bolivia is La Paz, which has a population of about 78,000. 
Some manufacturers find it advantageous to make sole connections 
with merchants or agents there and allow the rest of the country 
to be developed from that point. However, the commercial traveler 
would find it advantageous to visit the other trade centers, especially 
Cochabamba, Potosi, and Oruro. The republic can be reached via 
the ports of Antofagasta, Arica, and Mollendo, and many travelers 
find it desirable to enter the country at Arica, a seaport, via Mollendo. 
The chief agricultural center of the republic is Cochabamba, while 
Oruro, Potosi, and Santa Cruz are famous chiefly for their mines. 
If local agencies are the most effective means of marketing goods, 
they should be established in each of the cities, owing to the fact 
that the cities are located at such distances from each other. Par- 
ticularly is this true of Santa Cruz which is almost 700 miles from 
La Paz. 

Railroads and Transportation. — Bolivia has three lines of railways 
from the Pacific coast ports of Chile and Peru. These routes are 
as follows: (1) Prom Mollendo to Puno, Peru, thence via Lake Ti- 



400 APPENDIX 

ticaca to Guagui, Bolivia, thenc6 to La Paz, distance 525 miles; (2) 
from Arica, Chile, to La Paz direct, 274 miles; (3) from Antofa- 
gasta, Chile, to Oniro, Bolivia, thence connections with La Paz 
and other places, 790 miles. 

Industries. — The industries of Bolivia are unimportant, being 
confined principally to the manufacture of articles for home consump- 
tion. These include the production of cheap clothing, sugar, chocolate, 
soap, etc. 

Articles Now Needed. — An analysis of Bolivian imports indicates 
that Germany and the United Kingdom have dominated Bolivian 
trade. As the imports from Germany in 1913 were over $7,000,000 
and those from the United Kingdom almost $4,000,000, against less 
than $2,000,000 from the United States, the opportunities are self- 
evident. American manufacturers and exporters may find it very 
advantageous to lay the foundation now for the sale of goods to 
take the place of those heretofore bought in Europe, particularly 
from Germany. The principal articles for which opportunities exist 
are the following : arms and ammunition, rice, candles, cement, manu- 
factures of cotton including piece goods, etc., powder and explosives, 
hats, hardware, barbed wire, dyes and chemicals, jewelry, drugs, 
pharmaceutical products, paper and cardboard, wearing apparel, 
canned meats and vegetables, beer, earthenware, chinaware, house- 
hold utensils, leather, electrical materials, ink, combs, musical in- 
struments, machinery, fancy goods, paints, matches, stationery. 

Foreign Commerce in Values 

Imports Exports Total 

1911 $22,764,849 $32,226,157 $54,991,006 

1912 92,308,506 35,147,965 64,456,471 

1913 21,357,505 36,551,390 67,908.895 

Distribution of Foreign Trade (four principal commercial countries) 

Imports Exports 

19118 

Germany $6,440,316 $4,368,301 

United Kingdom 3,537,112 26,112,023 

United States 1,791,911 152,976 

France 949,885 2,133,950 

1913 

Germany 7,000,000 3,109,758 

United Kingdom 3,850,000 29,548,087 

United States 1,900,000 218,195 

France 1,100,000 1,783,017 



Note. — The classification of imports for 1913 are estimates. None of the Bolivian fig- 
ures classif jdng the trade by countries can be very accurate owing to the fact that the entire 
foreign trade is carried on through adjacent countries and oooseQuently cannot always b« 
diU'erentiated as to origin and destination. 



APPENDIX 



401 



THE REPUBLIC OP BRAZIL 

Language. — ^Portuguese; German and Italian are also spoken in 
some settlements. 

Currency. — Gold milreis — 1,000 reis=:$0.546. Actual currency is 
paper, the exchange value of which in January, 1914, was $0.3242. 
A cantos is 1,000 milreis. In expressing sums in milreis and reis 
the $ is used in practically the same manner as a period. Thus the 
sum 125 milreis 225 reis is written 125$225; again 125 milreis is 
written 125$ or 125$000. 

Weights and Measures. — Metric is legal system. Of the old Portu- 
guese weights and measures still used occasionally, libra= 1.012 
pounds, and arroba=32.38 pounds. 

Postage. — ^Postal Union rates. Parcel post arrangement with the 
United States. 

Area. — 3,292,000 square miles. 

Population.— 24:,0Q0,Q00. 

Capital. — Eio de Janeiro; population 1,500,000. 



Area Square Miles 



PopuJation 



Population Per Square Mile 



3,292,000 



24,000,000 



7.i 



Foreign Commerce 

Year Total Imports Imports from United States Total Exports Exports to United States 
Dollars Dollars Per Cent. Dollars Dollars Per Cent. 



1913 



326.865.000 



51,358,^ 15.7 315,856,000 102,700,000 32.5 



Imports 



Per Capita 
Exports Revenue Expenditure 



Debt 



Interest 



Dollars 


Dollars Dollars 


Dollars Dollars 


1 DoUars 


13.45 


12 


.98 7.93 


7.88 42.22 


1.65 


Length of Railways 




Telegraphs 


Railroads 


Telegraphs 










Length Length 






Miles Miles 


Per 10,000 Per 1,000 


of Line of Wire 


Date MUea Date 


of of 


Inhabit- Square 


per 10,000 per 10,000 






Line Wire 


ants Miles 


Inhabit- Inhabit- 
ants ants 



1914 15,279 1912 36,199 73,124 



6.3 



4.6 



14.9 



30.1 



Year 



Revenue and Expenditure 

Revenue Expenditure 



1914 



Dollars 
192,729.000 



Dollars 
191.656.000 



403 APPENDIX 

Debt 

Unfunded, Including Total Rates Interest and 

Funded Floating Non-interest- in U. S. of Other Annual 

bearing, Etc. Currency Interest Charges 

Currency Amount Currency Amount Dollars Per Cent. Dollars 

£SterUng 91,609,000 £SterUng... 2,000,000 1,026,312,000 4-6 40,121,000 

Francs 299,032,000 Francs 278,502,000 

Milreis, paper. . 701,383,000 Milreis, paper 601,488,000 

Location. — The republic of the United States of Brazil lies prac- 
tically within the Southern Hemisphere, extending on both sides of 
the Equator, from the Torrid Zone into the South Temperate Zone. 
It is bounded on the north by British, French, and Dutch Guiana, 
Venezuela, and Colombia; on the west by Ecuador, Peru, Bolivia, 
Paraguay, Argentina and Uruguay; on the east and south by the 
Atlantic Ocean. 

Area and Physical Characteristics. — The area of Brazil is 3,292,000 
square miles, about 200,000 square miles larger than the United States. 
It comprises over 40 per cent, of all South America. Its extreme 
length is 2,630 miles, its width 2,540 miles. Brazil consists largely 
of rolling uplands and tablelands, some of which are very high. 
There are numerous mountain chains and a vast system of rivers. 

Climate. — ^Every possible climate is represented, from the extremely 
torrid to the temperate, and the climatic conditions are effected 
materially by altitudes. In most parts of Brazil the climate is warm 
and moist. In the tropical division, the mean annual temperature is 
about 80 degrees Fahrenheit. In the semi-temperate division, which 
includes the mountainous parts of Brazil, the mean temperature 
averages 65 degrees. The rainfall varies materially and occurs in 
periods which are much dependent upon latitudes; thus in Para, the 
annual rainfall is 20 inches with 291 days of rain; Bio de Janeiro, 
43 inches, with 127 days of rain; Santos, 98^/^ inches, etc. The wet 
and dry seasons are materially different and are dependent upon 
latitude. 

Population. — Brazil has a population of 24,000,000 or about 7.4 to 
the square mile. The population consists largely of four classes: 

1st. White. 

2nd. Mixed whites, of which a large percentage are whites. 

3rd. Half-breeds, Indian and Negro blood. 

4th. Negros and Indians. 

The white population is descended from the Portuguese and there 
are large colonies of Germans and Italians, particularly in che states 
of Kio Grande and Sao Paulo. As immigration has been greatly 
encouraged, the number of immigrants from Europe until the 
outbreak of the European War was very large, principally Portuguese, 



APPENDIX 403 

Italian, German, Spanish, Kussian, etc. English and French resi- 
dents are found in all the larger cities and the business of Brazil 
is greatly affected by this European influx. 

Purchasing Power of the Different Classes, — The republic of Brazil 
has a high per capita purchasing power and importations from the 
United States are rapidly increasing. The staple necessities of the 
lower classes are an important item in the importations, while the 
increasing wealth of the growing upper class opens a rapidly de- 
veloping field. The requirements of the white Brazilian and Euro- 
pean population are those of the wealthiest nations and not only 
articles of common use but also luxuries of all sorts are in demand. 
Brazil is being developed from the agricultural as well as other stand- 
points, and the enormous wealth already existing in many portions 
of the country insures large sales of American products. 

Chief Resources. — The great wealth of Brazil is largely due to its 
two chief products, coffee and rubber, which make up about 85 
per cent, of its exjwrts. Besides these, many other agricultural 
products are produced, including sugar, Paraguay tea, nuts, tobacco, 
cotton, etc. The coffee industry is especially important and rubber 
is a close second. The efforts of the Brazilian Government to insure 
a diversity of crops opens vast opportunities for American manu- 
facturers in the sale of agricultural machinery suitable for their 
cultivation. 

Other Resources. — The raising of cattle whose hides and skins are 
exported, the exploitation of the forests which produce mahogany, 
ebony, and other hard woods, the cultivation of plants which furnish 
fibers, the growth of tropical fruits, the gathering of medicinal 
plants, dye woods, etc., the raising of grapes for wines, etc., all 
contribute to the wealth of Brazil. Because of its vast area, the 
individual states and centers require study. 

Mining. — Brazil is one of the very richest countries of the 
world in ores, with almost every kind of minerals. Valuable deposits 
of iron ore, zinc, lead, tin, copper, graphite, manganese, diamonds, 
etc., are found and are gradually being exploited, although they are 
still in a primitive state, owing to lack of capital and transportation 
facilities. 

Industries. — The raising of live stock is being encouraged while 
lumbering is likewise receiving increasing attention. All articles 
useful in these industries can be sold. 

Factories and Mills. — The number of factories in the more progres- 
sive states of Brazil is already large and their investments approxi- 
mate several millions of dollars. These are principally flour mills, 
breweries, enamel factories, iron foundries, electric light plants, etc, 



404 APPENDIX 

Great opportunities are afforded in the sale of machinery, equipment, 
and supplies suitable for such industries. 

Principal Cities. — The principal cities of Brazil are Bahia, popu- 
lation 300,000, Manaos 50,000, Para 200,000, Paramaribo 125,000, 
Porto Alegre 100,000, Eio de Janeiro 1,200,000, Sao Paulo 450,000, 
Nichteroy 35,000, Eio Grande do Sul 25,000, Santos 40,000, Victoria 
25,000, Ceara 35,000, Maceio 30,000, Parahiba 35,000, Sao Luiz 
35,000. 

Best Method of Canvassing the Republic, — The republic of Brazil 
covers such a vast area that several distinct territories are absolutely 
essential in case it is decided to establish local agencies. No general 
agency for Brazil should be granted unless the house accepting it 
possesses a traveling organization capable of reaching all districts. 
As it takes over three weeks to make the journey from Rio de Janeiro 
to Manaos on the Amazon, the latter is obviously not a city to be in- 
cluded in the territory of an agency established at Rio. Naturally 
the capital, Rio de Janeiro, is the most important city strategically 
from a commercial standpoint. Before reaching it, however, the 
traveler from New York will touch at Para where an enormous 
business is being done and which is the headquarters for northern 
Brazil. 

The city and the port of Maranham may be included in the terri- 
tory of the agent at Para and the traveler with a limited time may 
omit it, but Pemambuco should invariably be visited because of its 
great importance from the commercial standpoint. Bahia, which 
is 800 miles from Rio de Janeiro, with a considerable population, 
should likewise be included in the itinerary of the commercial rep- 
resentative, being the last important port before Rio. In southern 
Brazil the ports of Rio Grande do Sul and Porto Alegre are also 
important. In case it is desired to cover the countries thoroughly, 
the other cities mentioned above may be visited advantageously. 
Very frequently the time required to establish direct relations with 
the merchants of smaller communities is well spent, instead of 
depending upon the importers of the larger places. Whether the 
small places are visited depends upon the arrangements made with 
the dealers, but the importance of not granting an agency for the 
whole of Brazil to a concern in Rio de Janeiro must be stressed. 
There are some importers in the growing cities in the states of 
Minas Geraes and Sao Paulo, which may be made advantageously 
from Rio. The merchants of the more important communities are 
listed in the trade directories published by the Bureau of Foreign 
and Domestic Commerce. 

Articles Most Needed hy Brazil — Almost all articles which can 



APPENDIX 405 

be sold in the United States are salable in Brazil. The opportunities 
are greater than ever before, because of the European War. 

Transportation Facilities. — For transportation the republic of Brazil 
is dependent, in large measure, upon its rivers and important lines 
of coasting ships. The railway systems already represent 160,000 
miles, of which the government owns about 12 per cent, and state 
governments 25 per cent.; the balance is owned by private corpora- 
tions. With the development of the mineral and agricultural re- 
sources of the country, the railroads will naturally be greatly 
extended. 

Foreign Commerce of Brazil in Values 

Imports Exports Total 

■ 1911.... $257,164,128 $325,271,614 $582,435,742 

1912 308,243,736 362,794,846 671,038,582 

1913 326,428,509 315,164,68^ 641,593,196 

Distribution of Foreign Trade (Jour principal commercial countries) 

1912 

Imports Exports 

United Kingdom $77,615,548 $43,065,547 

Germany 53,018,079 51,928,195 

United States 48^109,316 141,914,885 

France 27,751,094 35,514,990 

1913 

United Kingdom $79,881,000 $41,701,815 

Germany 57,043,754 44,392,410 

United States 51,289,682 38,685,561 



THE REPUBLIC OF CHILE 

Language. — Spanish. 

Currency. — Gold peso— 100 centavos=:$0.365. Actual currency is 
paper money that fluctuates in value, the exchange rate of the paper 
peso on January 1, 1914, being approximately $0.2061. The mark $ 
when followed by the word oro means the gold peso; if followed by 
the abbreviation m/c, for moneda corriente, it means the paper peso. 
The gold peso is sometimes designated as peso of 18d., that being 
its value in terms of sterling. 

Weights and Measures. — The metric is the legal system. Among 
old Spanish weights and measures still used are vara=i:32.91 inches; 
quintal=:101.41 pounds. 



406 



APPENDIX 



Postage. — Postal Union rates. Parcel post arrangement witli the 
United States. 

Area. — 292,100 square miles. 

Population.~5,000,000. 

Capital. — Santiago; population 500,000. 



Area Square Miles 



Population 



Population Per Square Mile 



292,100 



5,000,000 
Foreign Commerce 



11.85 



Year Total Imports Imports from United States Total Exports Exports to United States 
Dollars Dollars Per Cent. Dollars Dollars Per Cent. 



1913 



120,274,000 _ 20,089,000 



16.7 



144,653,000 30,418,000 



21.0 



Imports 



Exports 



Per Capita 
Revenue Expenditure 



Debt 



Interest 



Dollars 
34.72 

Length of Railways 



Dollars 
41.76 



Dollars 
23.61 

Telegraphs 



Dollars 
22.69 

Railroads 



Dollars 
59.96 



Dollars 
2.37 

Telegraphs 



Date 



Miles Date 











Length 


Length 


Miles 


Miles 


Per 10,000 


Per 1,000 


of Line 


of Wire . 


of 


of 


Inhabit- 


Square 


per 10,000 


per 10,000 


Line 


Wire 


ants 


Miles 


Inhabit- 
ants 


Inhabit- 
ants 



1913 



3,958 1912 23,384 30,287 



11.4 



13.5 



64.6 



87.4 



Revenue and Expenditure 
Year Revenue Expenditure 



Funded 



Ciu-rency 



Amount 





Dollars 


Dollars 




1914 


81,801,000 
Debt 


78,604,000 






Unfunded, Including 


Total 


Rates Interest and 




Floating Non-interest- 


in U. S. 


of Other Annual 




bearing, Etc. 


Currency 


Interest Charges 


nt 


Currency Amount 


Dollars 


Per Cent. Dollars 



£ Sterling . . 
Pesos, gold. 



34,498,000 Pesos, paper. 181,204,000 207,704,000 4i^-5 
5.917,000 



8,212,000 



Location. — The republic of Chile is located on the west coast of 
South America, being the longest and narrowest country in the 
world. It is bounded on the north by Peru and Bolivia, on the 
east by the Argentine Eepublic, on the west by the Pacific Ocean. 

Area and Physical Characteristics. — The area of Chile is approxi- 
mately 305,000 square miles, with a coast line of almost 3,000 miles 
and an average width of about 90 miles. The chief physical char- 
acteristics are the two mountain chains called the Cordillera de la 
Costa, and the Andes, which traverse the country from north to 
south. Between these two chains lies the great central valley which 



APPENDIX 407 

is very rich from the agricultural standpoint. There are numerous 
streams, although comparatively few are navigable. There are a 
number of high mountain peaks including Copiapo, 20,000 feet, and 
Parincata, 21,000 feet. 

Climate. — The climate of Chile varies greatly because of the 
great length of the republic, about 3,000 miles. In the extreme 
northern regions the climate is hot and dry, with but little rain. 
Here the country is largely desert with the rich nitrate deposits. 
In the central region in which mining is carried on extensively the 
climate is more temperate. In the agricultural region the tempera- 
ture is altogether temperate with abundant rains, making the fertile 
valleys exceedingly rich. In this region there are various forest 
regions, mineral deposits, etc. In the extreme southern portion it is 
cold, particularly in Patagonia and Tierra del Fuego. The tempera- 
ture at Santiago averages 56 degrees Fahrenheit while in the ex- 
treme north the average is 91 degrees Fahrenheit, and in the extreme 
south 17 degrees Fahrenheit. Because of the vast differences in the 
climatic conditions of Chile, they must be carefully considered in 
studying business opportunities. The rainfall varies greatly, increas- 
ing from north to south. At Santiago the annual rainfall is 14 
inches. At Valdivia the rainfall is almost daily, annual average 
115 inches. At Atacama, in the extreme north, no rain has been 
known for over 50 years. 

Population. — The population of Chile is estimated at between 
four and five millions. Chile is said to be the most homogeneous 
nation in South America. The people are largely the descendants 
of the Spanish conquerors who intermarried with the Indians. The 
peasant class of Chile is an industrious, peaceful race and, con- 
sequently, the republic has reached a high state of development. In 
all the commercial centers, particularly the more important ones, the 
European nations have numerous representatives. 

Purchasing Power. — The purchasing power of Chile ranks high 
among the Latin American republics. This is due to the great 
and rapidly growing wealth of the republic which is chiefly due to 
the wonderful deposits of nitrate which have added enormously to 
the revenue of Chile, producing over $500,000,000 in export taxes 
during 35 years. The extraordinary wealth of the upper classes 
makes possible the purchase of any luxury that is desired. 

Chief Resources. — The chief source of Chile's wealth is nitrate. 
The nitrate beds are found in a territory of about 450 miles in 
length, stretching from Caldera to the River Camarones in the north. 
The sale not only of nitrate but also of its by-products, especially 
iodine, is a source of great revenue. The influence of the develop- 



408 APPKNTDIX 

ment of the nitrate beds on the building of railroads and the con- 
sequent purchasing of supplies has been very important. Besides 
nitrate, enormous quantities of coal, copper, and borates have been 
exported. The chief copper mines of Chile are operated by Ameri- 
can companies. Silver exists but latterly has not been produced 
in the quantities that formerly were found. Gold likewise exists, 
besides numerous other metals. Salt, zinc, graphite, sulphur, etc., 
are of some importance. 

Other Resources. — Agriculture and stock raising are of scant im- 
portance in comparison with mining. The valleys and the plateaus 
offer excellent fields for these industries, and the outlook for the 
development of agriculture is better than it has been for years. The 
cultivation of desirable immigration will increase the importance of 
this industry. Besides the growth of cereals, there are raised numer- 
ous vegetables, alfalfa, etc. Fruit trees of all sorts are abundant, 
besides walnuts and fruits of the tropics, including oranges, lemons, 
coconuts, etc. Viticulture is an important and growing industry. 
Stock raising has been greatly developed and the exports of hides, 
goatskins, etc., are growing. The building of refrigerating and can- 
ning establishments has also resulted in the exportation of much 
frozen and canned meat besides the by-products of the packing plants. 

The Lumber Industry. — Chile has an enormous wealth in forest 
land, which is now being developed. Much timber is produced and 
enormous trees are found suitable for furniture, tan-bark, etc. 

Manufacturing. — The manufacturing interests of Chile have grown 
greatly in recent years and bid fair to rival the mining and agricul- 
tural industries of the republic. Particularly is this the case with 
the smaller manufacturing establishments which are used chiefly in 
the production of foods and food preparation, clothing, breweries, 
mills, and candle manufacturing, the production of chemical and 
pharmaceutical products, tobacco and its manufactures, the produc- 
tion of paper, printing presses, textiles, tanneries, woodworking 
establishments, etc. The growth of manufacturing will result in an 
increased sale for all sorts of machinery, engines, electrical ap- 
pliances, etc. 

Transportation. — The republic of Chile has an excess of 5,000 
miles of railway in operation, of which two-thirds are owned by 
the republic, the remainder being in the hands of private corpora- 
tions. The chief railways run north and south with numerous 
branches, spurs, and feeders. When the Longitudinal Kailway is 
completed it will cover almost the entire length of Chile, about 
2,200 miles. Some lines make connections with railroads in Bolivia, 
while there is also a connection with the Transcontinental Kailroad 



APPENDIX 409 

running to Buenos Aires. The continuous railway construction, and 
the improvement of old lines, make for a heavy purchase of locomo- 
tives, cars and railway supplies of all sorts. 

Chief Cities. — The chief cities of Chile are the following : Santiago, 
population, 350,000; Valparaiso, 200,000; Antofagasta, 35,000; Con- 
cepcion, T0,000; Iquique, 40,000; Punta Arenas, 15,000; Talcahuano, 
20,000; Yaldivia, 16,000; Talca, 40,000; Chilian, 45,000; La Serena, 
25,000; Temuco, 16,000. 

Best Method of Canvassing the Republic. — Many American travel- 
ers visit Chile after having completed a tour of Argentina. On the 
other hand, some prefer to visit the west coast first and then go to 
the eastern republics. In either event, there are certain cities which 
should by all means be included. The most important are the fol- 
lowing: Valparaiso is the chief port and commercial center of the 
republic, with an enormous shipping traffic, the greatest percentage of 
the imports coming in that way. The traveler should stop here first 
and become acquainted with commercial conditions. Santiago can 
easily be reached from Valparaiso, requiring less than four hours. 
This is a larger city than Valparaiso and with a considerable trade, 
and many firms, American houses, appoint agents either in Santiago 
or Valparaiso to cover the republic. In certain lines this may be 
recommended but should be done only where the resident agent can 
demonstrate that he is possessed of an efficient traveling organization 
to visit the other important places. For most lines it may be safely 
recommended that direct relations be established with reliable im- 
porters in the chief cities and that agents in one or another city 
should not be depended upon to obtain distribution. After Santiago 
and Valparaiso, important cities which should be visited are: Talca, 
lying south of Santiago, easily reached by the trunkline. Its port 
is Constitucion. South of this place lies Chilian, the capital of the 
province of Nuble and the center of an important trading district, 
particularly in cotton and horses. Prom this place a visit can be 
made to Concepcion which is the capital of the province of the same 
name and the center of an important German population. There are 
numerous manufacturers, and in the neighborhood are mines, farming 
districts, etc. On the Straits of Magellan is located the city of 
Punta Arenas which has become very important on account of the 
sheep-raising industry, besides being a distributing point for southern 
Chile. Near by are coal mines, gold and silver likewise being ex- 
ported and cattle raising being an increasing source of wealth. To 
the north of Valparaiso is the city of Taltal, which is in the province 
of Antofagasta. It is a regular port of call. Antofagasta is a little 
further north, and important because of being the terminus of the 



410 APPENDIX 

Antofagasta Railway through which much of the commercevto Bolivia 
passes. Antofagasta is the key to Oruro in Bolivia. North of this 
point is Iquique, which is the second port of importance in Chile. 
Its importance is due to the great nitrate industry which is respon- 
sible for the wealth. Still further north is the port of Arica, the 
most northerly port of Chile. It is the terminus of a road connecting 
the port with La Paz, Bolivia. The chief wealth of the district is 
due to agriculture and fruit raising. Tacna, which is located at a 
short distance from the port of Arica, is the capital of the province 
of the same name and an important center of trade between Bolivia 
and the port of Arica. Near by are important copper smelting 
works. Coquimbo, situated about 200 miles north of Valparaiso, is 
^^ the key to a very rich district and should be visited. Whether other 

. iju #^ places are to be visited depends upon the investigation of the traveler. 

'' ^Articles Most Salable. — ^It will be realized from the foregoing de- 

scription, that the republic offers opportunities for the sale of prac- 
tically everything that can be exported. The wealth of the country 
is rapidly increasing and the outlook for the future is even more 
bright than it has been in the past. 

Foreign Commerce of Chile in Values 

Imports Exports Total 

1911 $127,381,479 $123,884,417 $251,265,896 

1912 122,075,994 139,878,201 261,954,195 

1913 120,274,001 144,653,312 264,927,313 

Distribution of Foreign Trade (Jour principal commercial countries) 

1912 

Imports Exports 

United Kingdom $38,616,886 $55,102,650 

Germany 33,189,070 28,060,695 

United States 16,806,341 24,514,565 

France 7,261,061 7,668,570 

1913 

United Kingdom $36,109,211 $55,548,341 

Germany. 29,578,138 30,772,743 

United States 20,089,158 30,413,386 

France 6,623,260 8,847,885 



REPUBLIC OF COLOMBIA 

Language. — Spanish. 

Currency. — Gold dollar, $1, United States currency. Actual cur^ 



APPENDIX 



411 



rency is inconvertible paper, the exchange rate of which is approxi- 
mately $102 to $1 gold. 

Weights and Measures. — The metric is the legal system. Of the old 
Spanish weights and measures, the vara, 33.38 inches ; the libra, 1.014 
pounds, and the arroba, 25.36 pounds, are still used. 

Postage. — Postal Union rates. Parcel post arrangement with 
United States; parcels cannot exceed 2 feet in length, and greatest 
girth permissible is 4 feet. 



Area Square Miles 



Popiilation 



Population Per Square Mile 



435,278 



12.57 



Year 



5,473,000 
Foreign Commerce 
Total Imports Imports from United States Total Exports Exports to United States 



1913 



Dollars 
26,987,000 



Dollars 
7,630,000 



Per Cent. 
28.3 



Dollars 
34,316,000 



Dollars 
18,862,000 



Per Cent. 
55.0 



Imports 



Exports 



Per Capita 
Revenue Expenditxire 



Debt 



Interest 



DoUars 


Dollars Dollars 


Dollars Dollars 


Dollars 


4.93 


6.27 3.10 


3.51 4.43 


.51 


Length of Railways 


Telegraphs 


Railroads 


Telegraphs 









Length 


, Length 




Miles Miles Per 10,000 


Per 1,000 


of Line 


of Wire 


Date MUes Date 


of of Inhabit- 


Square 


per 10,000 


per 10.000 




Line Wire ants 


Miles 


Inhabit- 
ants 


Inhabit- 
ants 


1913 621 1914 


11,721 11,721 MUes 


Miles 


MUes 


MUes 




1.1 


1.4 


21.4 


21.4 




Debt 










Unfunded, Including 


Total 


Rates 


Interest and 


Funded 


Floating Non-interest- 


in U. S. 


of ' 


Other Annual 




bearing. Etc. 


Currency 


Interest 


Charges 


Currency Amoxmt 


Currency Amount 


Dollars 


Per Cent. 


Dollars 


£ Sterling 4,035,000 


Dollars 4,599,000 


22,234,000 


3-6 


2,806,000 



Location and Area. — This is the northernmost country of South 
America, with an area of 438,436 square miles. 

Physical Characteristics. — Colombia is traversed by three chains 
of mountains, producing practically all climates, ranging from the 
extreme tropical to the regions of eternal snow. There are several 
important rivers, notably the Magdalena, which is the largest; there 
are also the Cauca, the Atrato, and the San Juan. The climate 
of the lowlands in general is torrid, but the plateaus enjoy a climate 
which is practically perpetual spring. 

Population. — The population of Colombia, estimate of 1915, is 
5,500,000, about 13 inhabitants per square mile. The Mestizo or 



412 APPENDIX 

mixed white and Indian classes dominate, the all white population 
being very small. The Negroes and Mulattos number about 350,000 
while there are many aborigines, said to number in the neighbor- 
hood of 150,000. 

Purchasing Power. — As the well-to-do class is comparatively small 
the market for luxuries is limited, but there is a considerable im- 
portation of staple products needed by all classes. The development 
of the resources of the republic, particularly from the agricultural 
and mineral standpoint, makes this a promising field, which would be 
even more desirable if the difficulties of transportation could be 
overcome. Up to this time there has been comparatively little rail- 
road building. 

Resources. — The resources of Colombia are chiefly agricultural, the 
principal crops being coffee, bananas, ivory, nuts, and tobacco. The 
exports of bananas are growing as the Santa Marta district is being, 
rapidly exploited by the United Fruit Company. The largest percent- 
age of the_ exports is coffee, for which the republic is famous. The 
growth of vegetable ivory, sugar cane, cacao, and tobacco is also en- 
couraged. 

Other Resources. — The exports of rubber, Panama hats, hides and 
skins have also been increasing. The raising of cattle for hides 
should prove very remunerative because of the excellent grazing 
facilities on the hills and in the valleys. The exploitation of the 
valuable forests of the republic also offers good opportunities, par- 
ticularly if assisted by the development of transportation facilities. 

Mining. — Colombia is rich in mineral wealth, and gold has been 
one. of the principal exports, the output having reached over $7,000,000. 
There are many other regions in which gold is known to exist both 
in veins and in placers. Another important mineral is coal, the 
valuable deposits of which will prove a source of enormous wealth 
when developed. Most of the world's emeralds come from Colombia. 
Petroleum, iron ores, and other metals need only foreign capital to 
insure great wealth to the republic. 

Principal Cities. — Colombia has about 25 cities whose population 
is in excess of 20,000. Each is usually the center of an important 
district, mineral or agricultural, or a port. Some are reached by 
railroads, but many are accessible only by steamboats or by animal 
transportation. The principal cities are the following : Bogota, 82,000 ; 
Barranquilla, 49,000; Cartagena, 37,000; Buenaventura, 6,000; 
Santa Marta, 14,000; Medellin, 72,000; Bucaramanga, 22,000; 
Paste, 28,000; Socorro, 21,000; Cali, 28,000; Ibague, 25,000; 
Manizales, 35,000; Palmira, 25,000; Popayan, 20,000; Neiva, 
22,000; Son Son, 30,000; Guaduas, 27,000; Monteria, 22,000; 



APPENDIX 413 

Yarumal, 22,000; Cucuta, 21,000; Miraflores, 20,000; Lorica, 
20,000; Cartago, 20,000; Palmira, 20,000; Andes, 20,000; Salamina, 
20,000; Fredonia, 20,000. . 

Best Method of Canvassing the Republic. — Most of the travelers 
who visit Colombia enter via the ports on the Caribbean Sea, the chief 
one of which is Port Colombia, connected by rail with Barranquilla, 
18 miles distant. Other important ports are Cartagena, Santa Marta, 
and Kio Hacha. All of these places may be reached by steamers 
from New York City and a number of European lines likewise 
touch there. The republic may also be entered at the ports of 
Buenaventura and Tumaco on the Pacific, which are visited by the 
steamship lines plying on the Pacific coast. It is customary for 
travelers to visit the city of Barranquilla first, as it is the most 
important commercial center in the east. Here are located a 
number of factories used to supply the demand for local necessities 
in cotton goods, certain lines of wearing apparel, chocolate, matches, 
etc. There is also an electric lighting and power system. From 
Barranquilla, representatives of certain industries find it advantageous 
to visit Santa Marta, the headquarters of the United Fruit Com- 
pany, although most of the firms there are supplied from Barran- 
quilla. Another important place is Cartagena, many of whose mer- 
chants import direct. It is found advantageous for some concerns 
to have a local agency to care for business in the coastal regions, 
and for this Barranquilla is the most advantageous. Commercial 
travelers enter the interior of the republic via the Magdalena River 
steamers, requiring ten or twelve days for the journey. The trip is 
generally made direct, although some travelers find it advantageous to 
visit Bucaramanga, capital of Santander, the center of a rich district 
and with a very promising future. Travelers also occasionally stop 
at Puerto Berrio, the port for the city of Medellin, the second 
largest city of the republic and naturally very important commercially. 
This city is an excellent place for the establishment of agencies to 
care for the district of Antioquia, and many important firms are 
established there. Bogota is the chief city of the interior and 
should be included in the itinerary of every visitor. When local 
agents are necessary one should always be established here, as he 
can then serve a considerable district. The city of Buenaventura 
on the Pacific Coast is an important commercial place where a large 
business is carried on. Local agencies may be advantageously estab- 
lished bere to serve the entire Pacific Coast district. Cali, which 
is the capital of the department of Cauca, is 111 miles from Buena- 
ventura, and also worthy of the visit of travelers, who will find ex- 
cellent opportunities for business. The city of Popayan, being in a 



414 



APPENDIX 



strategic position for trade between Bogota and Quito, can also be 
visited to advantage. The time at the disposal of the traveler must 
determine whether any of the other places can be visited to advantage, 
but merchants in the other sections of Colombia are supplied by the 
importers of the cities mentioned. 

Railways and Transportation. — The principal artery in Colombia 
is the Magdalena River, although other rivers are important. The 
total number of miles of railway operated in Colombia is 700, prin- 
cipally short lines connecting important places in the interior and 
some cities on either coast. 

The country is peculiarly rich and with capital, credit, and the 
development of its transportation facilities would offer one of the 
best fields for North American enterprise. . 

Articles Now Needed. — The disturbance of business relations with 
the European countries affords an opportunity for American manu- 
facturers to supply certain products. The principal ones are as 
follows : 



Rice 

Woolen cloth 

Blankets 

Hardware 

Barbed wire 

Chemicals 

Dyes 

Safety matches 

Oils 

Print paper 

Writing paper 

Stationery 

Cardboard 

Perfumery 

Soap 

Paints 

Varnishes 

Arms 

Ammunition 

Fancy goods 

Vehicles 

Crockery- 



Manufactures of cotton (includ- 
ing ready-made clothing) 

Canned meats and vegetables 

Miscellaneous machinery 

Drugs 

Pharmaceutical products 

Beer 

Mineral waters 

Earthenware 

Chinaware 

Household utensils of tin and 
enameled ware 

Leather 

Miscellaneous manufactures of 
leather '' 

Electrical material 

Ink 

Pigments for paints 

Manufactures of rubber, celluloid, 
etc. 

Combs and other manufactures of 
tortoise shell, horn, and bone 

Musical instruments (including 
pianos, music boxes, and other 
instruments) 



APPENDIX 415 

Foreign Commerce of Colombia in Valves 

Imports Exports Total 

1911 $18,108,863 $22,375,899 $40,484,762 

1912 23,964,623 32,221,746 56,186,369 

1913 28,535,800 34,315,800 62,851,600 

Distribution of Foreign Trade (four principal commercial couniries) 

1912 

Imports Exports 

United Kingdom $7,838,879 $4,376,182 

Germany 4,201,125 [ 1,854,211 

United States 7,612,037 15,832,882 

France 2,011,886 625,199 

1913 

United Kingdom $5,837,490 $5,566,000 

Germany 4,012,100 2,216,200 

United States 7,629,500 18,861,800 

France 4,408,600 797,900 

THE REPUBLIC OF COSTA RICA 

Language. — Spanish. In Port Limon there are two newspapers, 
one in Spanish and the other with both Spanish and English sec- 
tions. San Jose newspapers are Spanish. 

Currency. — Colon — 100 centavos=$0.465. 

Weights and Measures. — The metric is the legal system, but some 
old Spanish weights and measures are still largely used in local trade, 
among them being the vara, 33 inches, the arroba, 25.36 pounds, and 
the libra, 1.014 pounds. 

Postage. — ^Postal Union rates. Parcel post. 

Area Square Miles Population Population Per Square Mile 

18,691 411,000 21 99 • 

Foreign Commerce 

Year Total Imports Imports from United States Total Exports Exports to United States ~ 

Dollars Dollars Per Cent. Dollars Dollars Per Cent. 

1913 8,685,000 4,468,000 50.14 10,322,000 6,241,000 50.8 

Per Capita 

Imports Exports Revenue Expenditure Debt Interest 

Dollars Dollars Dollars Dollars Dollars Dollars 

21.13 25.11 10.41 10.20 40.12 1.77 



416 



APPENDIX 



Postal Business 
Domestic Money and Postal Orders Sent 



Foreign Money Orders Sent 



Number 
Length of Railways 


Value 
Dollars 
188,397 

Telegraphs 


Number 
Railroads 


Value 
Telegraphs 


Miles Miles 
Date Miles Date of of 
Line Wire 


Per 10,000 
Inhabit- 
ants 


Per 1,000 
Square 
Miles 


Length Length 
of Line of Wire 
per 10,000 per 10,000 
Inhabit- Inhabit- 
ants ants 


1914 402 1913 
Fimded 


1,521 9.8 
bebt 
Unfunded, Including 
Floating Non-interest- 
bearing, Etc. 


21.6 

Total 
in U. S. 
Currency 


37.0 

Rates Interest and 
of Other Annual 
Interest Charges 


Currency Amount 

£SterUng 2,000,000 

Francs 35,000,000 


Currency 


Amount 


Dollars 
16,488,000 


Per Cent. Dollars 
4-5 727,000 







Location, Area, and Physical Characteristics. — This is the most 
southerly of the five Central American republics. Its extreme len^h 
is about 280 miles and the width 156 miles. The area is about 
23,000 square miles. 

The Country in General. — A lofty plateau rising from low, sandy 
plains along both coasts. There are numerous mountain ridges 
and a number of great volcanoes. 

Climate. — Along the coast the climate is quite tropical, being 
hot and moist, with a mean annual temperature of 78 degrees. On 
the plateau the climate is moderate, at San Jose, the capital, being 
68 degrees. The rainfall at San Jose is between 60 and 70 inches. 
In the more tropical and lower levels the rainfall annually ranges 
between 120 and 140 inches. 

Population. — By the estimate of January 1st, 1915, the population 
is 400,000, about 22 per square mile. The population is largely 
white, including several thousand foreigners. Among the latter are 
2,200 Europeans and 600 Americans. There are only about 3,500 
aborigines and 15,000 Negroes, principally from Jamaica. A high 
degree of racial purity exists and the population is very different 
from that of other Central American countries, particularly Gua- 
temala. 

Purchasing Power of the Different Classes. — Costa Rica is unique 
in its high per capita importation. This is accounted for by the small 
percentage of aborigines, and the fact that there is a larger middle 
class with substantial purchasing ability. The Negroes are prin- 
cipally employed in the cultivation of the banana plantations of 



the United Fruit Company. The general wealth of the country in- 
sures a market for many American manufactures. 

Resources and Wealth. — The resources are chiefly agricultural, the 
principal crops being bananas, coffee, and cacao, in the order named. 
The exports of bananas in 1914 totaled over ten million bunches. 
Costa Rican coffee is famous throughout the world and enjoys a 
high price. The production of cacao is rapidly increasing and 
many plantations are approaching the productive stage. 

Other Resources, — ^Hides, rubber, and timber are' additional re- 
sources. Hides are exi)orted in moderate quantities as there are 
excellent grazing facilities on the hills and in the valleys. The out- 
put of rubber has also been enlarged and the exjwrtation of valuable 
timber, principally cabinet woods, is increasing. 

Mining. — The principal output of the mines of Costa Rica is 
gold largely taken from a group of mines known as the Aguacate. 
Aside from this there is but little mining development. 

Industries. — The principal industries in Costa Rica are the manu- 
facture of shoes, the distillation of liquors, and brewing. The 
republic is not in any sense a manufacturing one. 

Principal Cities. — ^In order of importance the principal com- 
mercial places of Costa Rica are: the capital, San Jose, 30,000 
population; Port Limon, 18,000; Cartago, 12,000; Punta Arenas, 
7,600. 

Best Method of Canvassing the Republic. — Costa Rica may be en- 
tered at Port Limon on the Atlantic and Punta Arenas on the 
Pacific. The traveler who goes via Port Limon will find it advanta- 
geous to canvass that city through which the bulk of importations 
pass, but should then go on direct to San Jose. For most products 
this city is the logical place in which to establish selling agencies as 
the merchants in other towns usually depend upon the distributors 
in San Jose. The dealers in the outlying places do not make 
purchases which are of sufficient importance to warrant direct im- 
portation. A number of American manufacturers are represented in 
Central America by agents whose headquarters are in San Jose 
and who make periodical trips to the other countries of Central 
America from this point. 

Articles Now Needed. — ^In the past certain products have been 
imported largely from Belgium, France, and Germany. The chief 
opportunities for American manufacturers will be in obtaining this 
business. Following is a list of these articles : cement, dyes, coloring 
matter, chemicals, corks, bottle stoppers, rice, beer, tramway ma- 
terial, sewerage material, pharmaceutical products, cotton fabrics, 
woolen fabrics. 



41S APPENDIX 

List of Principal Articles for Which Costa Rica Offers a Field.— ^ 
The following articles would be desirable imports: coal, canned and 
preserved foods, leather, iron pipe, wheat flour, lumber, lard, butter, 
furniture, building material, electrical material, railway material, 
sawmills, coffee machinery, sewing machines, typewriters, agricul- 
tural machinery, sugar machinery, mining machinery, grain mills, 
cotton fabrics, woolen fabrics, silk fabrics. 

Foreign Commerce of Costa Rica in Values 

Imports Exports Total 

1911 $8,867,561 $9,020,149 $17,987,710 

1912 10,187,686 10,071,144 20,258,830 

1913 8,778,497 10,432,553 19,211,050 

Distribution of Foreign Trade (four principal commercial countries) 

1912 

Imports Exports 

United Kingdom $1,291,003 $4,193,036 

Germany 1,503,944 559,566 

United States 5,865,908 5,025,694 

France 424,189 131,683 

1913 

United Kingdom $1,303,187 $4,364,436 

Germany 1,355,417 509,804 

United States 4,515,871 5,297,145 

France 391,681 96,666 

THE REPUBLIC OF CUBA 

Language. — Spanish. 

Area. — 44,164 square miles. 

Population.— 2,S8S,000. 

Capital. — Havana; population 350,000. 

Area Square Miles Population Population Per Square Mile 





44,164 2,383,000 53.92 




Foreign Commerce 


Year 


Total Imports Imports from United States Total Exports Exports to United States 




Dollars Dollars Per Cent. Dollars Dollars Per Cent. 


1914 


133,975,000 71,380,000 28.3 34,316,000 18,862,000 55.0 




Per Capita 




Imports Exports Revenue Expenditure Debt Interest 



Dollars Dollars Dollars Dollars Dollars Dollars 

54.15 69.03 15.34 13.73 27.33 1.80 



APPENDIX 



419 



Length of Railways 



Telegraphs 



RailroadB 



Telegraphs 



Length Length 

Miles Miles Per 10,000 Per 1,000 of Line of Wire 

of of Inhabit- Square per 10,000 per 10,000 

Line Wire ants Miles Inhabit- Inhabit- 

ants ants 



Date Miles Date 



1913 2,331 1912 



5,065 6,184 9.4 50.8 

Revenue and Expenditure 
Year Revenue Exi>enditure 



20.5 



25.0 



Funded 



Dollars 
1913-14 37,940,000 

Debt 
Unfunded, Including 
Floating Non-interest- 
bearing, Etc. 



Dollars 
33,974,000 



Total 
inU. S. 



Rates Interest and 
of Other Annual 



Currency Interest Charges 



Currency Amount 

Dollars.. 67,620,000 



Currency 



Amount 



Dollars Per Cent. Dollars 
67,620,000 4H-5 4,458,000 



Location. — The island of Cuba lies about 72 miles southwest of 
the United States. 

Area and Physical Characteristics. — The area of Cuba is 44,164 
square miles. The country varies materially in characteristics, having 
fertile plateaus and valleys, lowlands along the coast, and a num- 
ber of regular mountain chains. 

Climate. — Along the coast the climate is tropical although made 
agreeable by the sea breezes. The heat grows less in approaching 
the interior because of the altitudes of the mountains and plateaus. 
The rainfall varies but is not excessive. The climate, except during 
the four months of summer, is almost ideal. 

Population. — The population of Cuba is 2,500,000, about 56 to the 
square mile, being one of the most densely populated of the Latin 
American countries. The people of Cuba are: (1) Whites; (2) 
Mulattos (mixture of white and black blood) ; (3) Europeans. The 
Spaniards have greatly influenced the population and the greatest 
immigration has been from Spain, most of the business being in the 
hands of the merchants of that nationality. The immigration from 
the United States has been increasing and has influenced to no 
small degree the imports from this country. 

Purchasing Power. — Cuba is one of the richest countries of Latin 
America and the per capita imports are extremely heavy. The 
wealth in general is much greater and the purchasing power of 
the Cuban people as a whole higher than in many of the other 
Latin American republics. 

Chief Sources of Wealth. — The chief sources of Cuban wealth are 
sugar, tobacco, fruits, and forest products. By far the greatest 



420 APPENDIX 

source of wealth is the cultivation of sugar, which has been developed 
to a high state of efficiency, as has likewise the production of 
tobacco. 

Other Resources. — The by-products of the sugar industry — ^molasses, 
rum, etc. — make up an important item in Cuban exports. The raising 
of cattle for their hides and skins, the exploitation of the sponge 
fishing industry, the development of beekeeping with its accom- 
panying production of honey and wax, are all important factors 
in the wealth of Cuba. 

Mining. — Within recent years, the importance of Cuba as a min- 
eral country has rapidly increased, due to the exploitation of iron, 
copper, and gold, but particularly of iron ore which is exported 
largely to the plants of the United States Steel Company. 

Industries. — The principal manufacturing of Cuba is of small 
articles for local consumption. This is, of course, with the excep- 
tion of cigars and cigarettes which represent a large percentage 
of the exports of manufactured tobacco. 

Principal Cities. — The principal cities of Cuba are Havana, about 
350,000 population, Santiago de Cuba, Cienfuegos, Matanzas, Car- 
denas, Sagua La Grande, Caibarien, Manzanillo, Nipe, Puerto Padre, 
and Guantanamo. 

Transportation Facilities. — The republic of Cuba has one of the 
best systems of railways of the American republics. There are 
now in excess of 2,200 miles in service; consequently every important 
place can easily be reached. The service between Havana and San- 
tiago is particularly good. There are also excellent lines of fast 
steamers and sailing vessels which can be taken if desired. 

Best Method of Canvassing Cuha. — Cuba is easily reached from the 
United States by many lines and from numerous ports. The most 
important city is, of course, Havana and many manufacturers have 
found it advantageous to establish agencies there for the whole of 
Cuba. Havana offers excellent facilities for the solicitation of busi- 
ness in other communities because of their accessibility and the com- 
parative shortness of the distances. If it is desired to establish other 
local agencies, a city that should be taken into consideration is 
Santiago which is at the other end of the island. Some houses find 
it preferable not to establish more than two agencies, in order to 
allow sufficient territory to make it of interest to the representative. 

Articles Salable in Cuha. — Because of the great wealth of th(^ 
country and the earning power of the people, there are opportunities 
for the sale of practically every kind of American merchandise and 
manufactures. The statistics of exports show that almost nothing 
which has a sale at home is excluded from Cuban importations. 



APPENDIX 
Foreign Commerce of Cuba in Values 

Imports Exports 

1911-12 $120,229,000 $146,787,000 

1912-13 135,810,000 165,208,000 

19ia-14 134,008,000 170,797,000 



42l 



Total 



$267,016,000 
301,018,000 
304,805,000 



Distribution of Foreign Trade (four principal commercial countries) 
1912-13 

Imports Exports 

United States $71,754,000 $132,581,000 

United Kingdom 16,097,000 15,663,000 

Germany 9,515,000 6,498,000 

France 8,237,000 1,826,000 

1913-14 

United States. $71,420,000 $136,936,000 

United Kingdom 14,581,000 18,242,000 

Germany 8,276,000 4,436,000 

France 8,257,000 2,652,000 

DOMINICAN REPUBLIC 

Language. — Spanish. 

Area. — 19,325,000 square miles. 

Population.— 10Q,(iQ0. 

Capital. — Santo Domingo; population 30,000. 



Area Square Miles 



Population 



Population Per Square Mile 



19,325 



700,000 



25.89 



Year 



Foreign Commerce 
Total Imports Imports from United States Total Exports Exports to United States 



1913 



Dollars 


Dollars 


Per Cent. 


Dollars 


Dollars 


Per Cent. 


9,272,000 


5,769,000 


62.2 


10,470,000 


5,601,00C 


53.5 



Imports 



Exports 



Per Capita 
Revenue Expenditure 



Debt 



Interest 



Dollars 


Dollars Dollars 


Dollars 


Dollars 


Dollars 


22.79 


14.44 6.94 


6.74 


18.23 


2.54 


Length of Railways 


Telegraphs 


Railroads 




Telegraphs 



Date Miles Date 











Length 


Length 


Miles 


Miles 


Per 10,000 


Per 1,000 


of Line 


of Wire 


of 


of 


Inhabit- 


Square 


per 10,000 


per 10,000 


Line 


Wire 


ants 


Miles 


Inhabit- 
antr 


Inhabit- 
ants 



1913 



400 



1911 



5.5 



14.3 



17.5 



17.5 



422 APPENDIX 

Revenue and Expenditure 
Year Revenue Expenditure 

Dollars Dollars 

1913 5,035,000 4,890.000 

Unfunded, Including Total Rates Interest and 

Funded Floating Non-interest- in U. S. of Other Annual 

bearing. Etc. Currency Interest Charges 

Currency Amount Currency Amount Dollars Per Cent. Dollars 

Dollars 13,218,000 Francs 70,000,000 316,693,000 4-5 17,582,000 

Location. — The island upon which Haiti and the Dominican Re- 
public are located is about 1,300 miles from New York, being 70 
miles in the east from the island of Porto Rico. 

Area and Physical Characteristics. — Its area is approximately 19,324 
square miles. The country rises from the lowlands at the sea level 
to many valleys, plateaus, and mountain ranges, there being four 
almost parallel ranges which traverse the republic. The highest 
peak is Mt. Tina with an altitude of 10,300 feet. 

Climate. — The climate is tropical, but very healthful and modi- 
fied considerably by the altitude in the interior. The sea breezes 
make the climate even at the sea level very pleasant. The dry season 
is from December to March when the weather is the coolest; the 
wet or rainy season is from July to October. The average minimum 
temperature of Santo Domingo for a given year was 69 degrees 
Fahrenheit, the average maximum 86 degrees Fahrenheit. The rain- 
fall generally is adequate. 

Population. — The population of Santo Domingo is chiefly Creole in 
character, being composed of the descendants of Spaniards. There 
is also a percentage of European, African, and Indian blood, including 
Turks and Syrians, who, in general, dominate the dry goods trade 
of Santo Domingo. Spanish is the language of the republic. The 
population of Santo Domingo is about 700,000 or about 35 per 
square mile. 

Purchasing Power. — In recent years, political conditions were ex- 
cellent, and the purchasing power of the republic is rapidly in- 
creasing. The lower classes require certain staples which make up a 
large percentage of Dominican imports. The development of various 
industries and the increasing wealth of the better classes influence 
the purchase of luxuries as well as machinery, implements, etc. 

Resources. — Santo Domingo is largely an agricultural country, 
the chief products being sugar, bananas, tobacco, coffee, and cacao; 
sugar is by far the most important. The output of cacao is rapidly 
on the increase. 



APPENDIX 423 

Other Resources. — The fertile valleys make possible the raising 
of cattle, the hides of which are being exported in increasing quan- 
tities. Bee farming, the honey and wax being sold abroad, the 
gathering of medicinal plants, the production of fibers of many kinds, 
the raising of cocoanuts for copra, are further items which contribute 
to the wealth of the republic. 

Mining. — As yet the exploitation of mines has not assumed com- 
mercial importance and no exports of minerals are reported, al- 
though because of the general formation of the republic it is be- 
lieved that they exist. 

Principal Cities. — The principal cities of Santo Domingo are Santo 
Domingo, Monte Cristi, Puerto Plata, Samana, Sanchez, San Pedro, 
Macoris, Azua, Barahona, Moca. 

Best Method of Canvassing the Republic. — The chief ports of the 
Dominican Bepublic can be reached by numerous ways from New 
York. There is also a line which connects Cuba and Porto Rico 
with certain Dominican ports. The chief city of the Domin- 
ican Pepublic is its capital, Santo Domingo, which must be 
visited first. 

Because of the comparatively limited opportunities, it may be 
advisable to confine an agency for the republic to an importer of 
this place. While the traveler is in the republic he may find it 
advisable to visit Sanchez, which is becoming increasingly impor- 
tant because of the cacao shipments, likewise Puerto Plata, and if 
there is time, San Pedro Macoris and Azua should also be included. 
For some lines, the other cities are good fields, but this can be deter- 
mined in the capital. 

Transportation Facilities. — The republic of Santo Domingo has 
about 100 miles of railways in addition to 230 miles of private lines 
on the large plantations. A service of coastwise steamers is available 
for travelers who desire to visit the various ports. 

Articles Now Needed. — The principal imports have been manufac- 
tures of iron, textiles, steel, dairy products, rice, meat, flour, oils, 
etc. The well-to-do classes of Santo Domingo are becoming con- 
stantly larger users of the luxuries imported from the United 
States. 

Foreign Commerce of Santo Domingo in Values ' 

Imports Exports Total 

1911 $7,949,662 $10,995,546 $17,945,208 

1912 8,217,808 12,385,248 20,603,146 

1913 9;272,278 10,469,947 19,742,23^ 



424 



APPENDIX 



Distribution of Foreign Trade (Jour principal commercial countries) 

1912 



Imports 



Exports 



United States $5,100,001 $7,274,606 

Germany 1,628,286 1,774,049 

United Kingdom 720,242 1,242,980 

France 224,912 933,212 

1913 

United States $5,769,061 $5,600,768 

Germany 1,677,833 2,068,384 

United Kingdom 730,191 241,810 

France 274,318 887,907 



THE REPUBLIC OF ECUADOR 

Language. — Spanish. 

Currency. — Sucre — 100 centavos=$0.487. Ten sucres make a 
condor, equivalent to the pound sterling. 

Weights and Measures. — Metric system adopted, but old Spanish 
weights and measures are still used to some extent. Of these the 
quintalr=101.4 pounds; libra=1.014 pounds, and varar=:33 inches. 

Postage. — Postal Union rates. Parcel post arrangement with 
United States; limit of value, $50. 

Area. — 116,000 square miles. 

Population.— 1,500,000. 

Capital. — Quito; population 60,000. 



Area Square Miles 



Population 



Population Per Square Mile 



116,000 



1,500,000 



12.64 



Year 



Foreign Commerce 
Total Imports Imports from "United States Total Exports Exports to United States 



1912 



Dollars 
10,653,000 



Dollars 
2,764,000 



Per Cent. 
26.0 



Dollars 
13,718,000 



Dollars 
3,965,000 



Per Cent. 
28.9 



Imports 



Exports 



Per Capita 
Revenue Expenditure 



Debt 



Interest 



Dollars 


Dollars Dollars 


Dollars Dollars 


Dollars 


7.10 


9.15 6.81 


6.81 13.19 


1.74 


Length of Railways 


Telegraphs 


Railroads 


Telegraphs 



Date 



Miles Date 











Length 


Length 


Miles 


Miles 


Per 10,000 


Per 1,000 


of Line 


of Wire 


of 


of 


Inhabit- 


Square 


per 10,000 


per 10,000 


Line 


Wire 


ants 


Miles 


Inhabit- 
ants 


Inhabit- 
ants 



1913 



652 



1912 3.318 3,318 



4.3 



5.5 



22.1 



22.1 



APPENDIX 425 

Revenue and Expenditure 
Year Revenue Expenditure 



Dollars Dollars 

1914 10.218.000 10,218,000 



Debt 
Unfunded, Including Total Rates Interest and 

Funded Floating Non-interest- in U. S. of Other Annua 

bearing, Etc. Currency Interest Charges 

Currency Amount Currency Amount Dollars Per Cent. Dollars 

Sucres 37,520,000 Sucres 3,125,000 19,780,000 4-10 2.604,000 

Location. — Ecuador is located on the west coast of South America, 
at the Equator. It is bounded on the north by Colombia, on the 
east and southeast by Colombia and Brazil, on the south by Peru, 
and on the west by the Pacific Ocean. 

Area and Physical Characteristics. — ^Ecuador contains about 116,- 
000 to 119,000 square miles. It may be roughly divided into three 
different areas: (1) The coastal region lying between the Andes 
Mountains and the Pacific Ocean, extremely tropical in character 
and with a heavy tropical vegetation; (2) The higher, mountainous 
area including about one-third of the republic, with plateaus and 
valleys, and varying from three to twelve thousand feet above the 
sea level; (3) The eastern Andean region falling to the plains of 
the Amazon Eiver. In Ecuador are found some of the highest peaks 
of the Andes and, in fact, some of the highest in South America. 
Among these are Chimborazo, 21,498 feet, Cotopaxi, 20,000 feet, etc. 
There are a number of important rivers, including the Guyas, the 
Maranon, the Daule, the Esmeraldas, etc. 

Climate. — In the coastal regions the climate is distinctly tropical, 
being hot and dry, with a mean annual temperature of 80 degrees 
Fahrenheit. The dry season lasts from June to December; the wet 
season from January to June. The plateau regions which lie be- 
tween two ranges of the Andes have a temperate climate closely 
resembling perpetual spring. The seasons are somewhat like those 
at the seaport. Quito has a mean temperature of 56 degrees Fahren- 
heit. In the third region or Montana, particularly on the lower 
mountain slopes, the climate is tropical. The rainfall is very heavy 
and the temperature high. 

Population.— The population of Ecuador is estimated at 1,500,000. 
The people are composed largely of Indians, representing from one- 
half to three-fourths of the population; Mestizos, between 300,000 
and 400,000; and pure whites, 100,000 to 200,000. Naturally, repre- 
sentatives, of European nations are found among the commercial 
classes in all the principal cities. 



426 APPENDIX 

Purchasing Power of the Different Classes. — The large percentage 
of Indians in the population of Ecuador makes the per capita pur- 
chasing ability of this country smaller than that of some of the other 
republics. The upper classes are well-to-do and are rapidly develop- 
ing a taste for all the articles which increasing wealth makes pos- 
sible. The bulk of imports is to supply the staple requirements of 
the Mestizo and lower classes. The steady development of the repub- 
lic will make for an increasing demand by all classes for Amer- 
ican products and manufactures, in direct ratio to their purchasing 
ability. 

Chief Sources of Wealth. — The resources of Ecuador are chiefly 
agricultural. The most important product is the cacao bean which 
represents over half the exports. Another product that is very 
important is the tagua or ivory nut, of which many millions of 
pounds are shipped to different markets of the world. Sugar is be- 
ing raised in increasing quantities, while coffee, rubber, and plants 
used for medicinal purposes are likewise important factors in the 
foreign trade. Among these are the mangrove, kapok, fibers, etc. 
The various products enumerated will undoubtedly become increas- 
ingly important. 

Other Resources. — One of the chief industries of Ecuador is the 
weaving of straw hats known as Panama hats, of which approxi- 
mately a million and a half dollars' worth are shipped ahnuallyT 
Cattle breeding is growing in importance, and hides, as well as goat- 
skins, are being exported. 

Mining. — Although Ecuador is recognized as having very rich 
deposits of metals, they have, as yet, been slightly developed. Those 
which are most commonly found are gold, mercury, copper, iron, 
lead, coal, silver ore, and platinum. Petroleum and sulphur have 
been found, and only the lack of transportation facilities prevents 
development of the coal deposits. The future for the mining indus- 
try of Ecuador is very bright. 

Manufacturing Industries. — The manufacturing industries of 
Ecuador are carried on in a comparatively small way. The more 
important manufacturing plants are devoted to the production of 
woolen and cotton blankets, carpets, etc. Among the other indus- 
tries represented are a shoe factory, flour mills, foundries, ice fac- 
tories, and sugar refineries. There is a good and growing field in 
Ecuador for the sale of machinery and equipment for smaller manu- 
facturing establishments. 

Principal Cities. — The principal cities of Ecuador are the fol- 
lowing: Guayaquil, population 80,000; Quito, the capital, 80,000; 
Cuenca, 35,000; Loja, 12,000; Riobamba, 15,000; Machala, 6^000, 



APPENDIX 427 

Best Method of Canvassing the Republic. — The chief commercial 
city of Ecuador is Guayaquil, which is situated on the Guayas Eiver 
35 miles above its mouth and easily accessible, to vessels drawing 
25 feet, via the Gulf of Guayaquil. Many manufacturers are satis- 
fied to place their representation with firms in Guayaquil when the 
latter have facilities for visiting the other places throughout the 
republic. This is the first point the traveler visits and for that rea- 
son he can early decide what is the best course to pursue. From 
Guayaquil the trip is usually made to Quito, the capital, also an im- 
portant commercial center. This should be included in the route 
of every traveling representative. On the way back from Quito, 
if it has been found inadvisable to depend upon agents in Guayaquil 
or Quito, the following cities are worthy of visits: Ambato, which 
is in the center of an important agricultural district; Riobamba, the 
chief city of a district in which cattle raising is carried on ex- 
tensively, besides agriculture, etc. ; Cuenca, in the province of Azuay, 
a rather important place noted for its agriculture and stock raising; 
Esmeraldas, which is located in the western part of that prov- 
ince, may be found desirable for the establishment of an agency 
for an otherwise isolated district; Manta, situated in the province 
of Manabi, is the port for the towns of Jipijapa and Monte Cristi, 
the principal places for the production of Panama hats. Manta 
may, for certain lines of merchandise, prove a good place to 
visit. 

Transportation Facilities. — ^In the republic of Ecuador, the prin- 
cipal railway extends from the port Guayaquil to Quito, a distance 
of almost 300 miles. The balance of the lines are short strips run- 
ning between some of the smaller places. The total mileage in opera- 
tion in Ecuador is 365. There is a considerable use of the rivers 
for transportation where these are navigable. 

Articles Salable in Ecuador. — The chief imports of Ecuador have 
been foodstuffs, clothing, manufactures of iron and steel, hard- 
ware, machinery, and textiles, the latter the most important. 
The more important cities of Ecuador today offer opportunities 
for the sale of almost anything that can be exported to South 
America. 

Foreign Commerce in Values 

Imports Exports Total 

1911 $11,489,104 $12,692,237 $24,181,341 

1912 10,354,564 13,689,696 24,044,260 

1913 8,836,689 15,789,367 24,626,056 



428 



APPENDIX 



Distribution of Foreign Trade {four principal commercial countries) 

1912 



Imports 



Exports 



United Kingdom $3,058,391 $2,042,278 

United States 2,686,712 3,957,306 

Germany 2,105,372 1,523,356 

France 616,053 4,096,863 

1913 

United Kingdom $2,617,027 $1,620,092 

United States 2,817,754 3,833,728 

Germany 1,563,129 2,627,353 

France 434,740 5,382,352 



THE REPUBLIC OF GUATEMALA 

Language. — Spanish. 

Currency. — The value of the Guatemalan silver peso on January 
1, 1912, was given by the United States Treasury Department as 
$0.40. The actual currency of the country is inconvertible paper, 
subject to wide fluctuations. Pesoz=100 centavos; reali=12V2 cen- 
tavos; medio real=6^ centavos. 

Weights and Measures. — The metric is the official system, but some 
old Spanish weights and measures are still used in local trade, among 
them being the vara=32.87 inches and the arrobazz:25.36 pounds. 

Postage. — ^Postal Union rates. Parcel post. 





Area Square Miles Population Population Per Square Mile 


Year 


48,290 2,119,000 43.88 

Foreign Commerce 
Total Imports Imports from United States Total Exports Exports to United States 


1913 


Dollars Dollars Per Cent. Dollars Dollars Per Cent. 
10,062,000 5,053,000 50.2 14,450,000 3,923,000 27.1 



Imports Exports 



Per Capita 
Revenue Expenditure 



Debt 



Interest 



Dollars 
4.75 



Dollars 
6.82 



Dollars 
1.31 



Dollars 
1.26 



Dollars 
8.29 



Dollars 



Length of Railways 



Telegraphs 



Railroads 



Telegraphs 



Date Miles Date 



1914 



602 



1913 



Miles 

of 

Line 


Miles 

of 
Wire 


Per 10,000 
Inhabit- 
ants 


Per 1,000 
Square 
Miles 


Length 
of Line 
per 10,000 
Inhabit- 
ants 


Length 
of Wire 
per 10,000 
Inhabit- 
ants 




3,783 


2.4 


10.4 




17.9 



APPENDIX 429 

Debt 

Unfunded, Including Total Rates Interest and 

Ftinded Floating Non-Interest- in U. S. of Other Annual 

bearing, Etc. Currency Interest Charges 

1- — 

Currency Amount Currency Amount Dollars Per Cent. Dollars 

Pesos, gold.. .. 11,584,000' Pesos, paper . 107,885,000 17,577,000 4-8 1,401,000 

Location, Area, and Physical Characteristics. — The republic of 
Guatemala is the most northerly of the Central American republics. 
It is bounded on the north and west by Mexico and British Honduras, 
on the east by the Atlantic Ocean and Spanish Honduras, on the 
south by Salvador and the Pacific Ocean. Its area is approximately 
48,290 square miles. The altitude of the country is very clearly 
defined into three regions; the hot coast lands less than 2000 feet 
above sea level, the temperate regions between 2000 and 6000, and 
the colder regions which lie at an altitude of 6000 feet and higher. 

Population. — The population of Guatemala, as estimated in 1915, 
is 2,100,000, or about 43 per square mile. The largest proportion 
of the people (about 60 per cent.) is comprised of pure-blooded In- 
dians of many different tribes. The rest of the population consists 
largely of a mixed class which includes most of the business men. 
Of foreigners there are about 1600 Americans, 600 Spaniards, 700 
Italians, 800 Germans, 200 English, 100 French, and 150 other 
Europeans. 

Purchasing Power. — In consequence of the large percentage of 
Indians, the per capita importations of Guatemala are rather small, 
although the possibilities for the future are great. Many American 
products have a sale among the better classes. Agricultural machin- 
ery, tools, and other modern implements are needed in the outlying 
districts. 

Resources. — The chief source of Guatemalan wealth is coffee, which 
forms the largest percentage of its exports. The banana industry 
dominated by the United Fruit Company has been growing and in 
1913 exports of this item amounted to about $825,000. Other ex- 
ports consist of cattle, hides, sugar, timber (principally hard woods), 
rubber, and chicle. 

Mining. — The mineral wealth of Guatemala is conceded by all 
authorities to be great, although the output until now has been 
small. This has been due to the lack of transportation facilities, to 
unfavorable mining laws, and to other causes which have been re- 
moved. The possibilities for the development of this industry are 
very promising. 

Industries. — Guatemala is not an industrial country. The manu- 
factures are limited to a modern textile mill for which cotton iq 



430 APPENDIX 

imported; there are also a number of ice factories, breweries, tan- 
neries, and small factories in which are made furniture, soap, candles, 
shoes, etc. 

Principal Cities. — In order of importance the principal commer- 
cial places of Guatemala are the following: Guatemala City, popu- 
lation 100,000; Quezaltenango, 30,000; Coban, 22,000; Totonicapam, 
18,000; Chiquimula, 1^,500; Antigua, 12,000; Escuintla, 13,000; 
Ketalhuleu, 8,000; Puerto Barrios, 8,000. 

Best Method of Canvassing the Republic. — The republic of Guate- 
mala can be entered from both the Atlantic and the Pacific oceans. 
On the Atlantic the principal seaports are Puerto Barrios, terminus 
of the Northern Eailway, and Livingston. The ports of the Pacific 
are San Jose, Champerico, and Ocos. San Jose is the starting point 
of the Guatemala Central Railway, by which most of the travelers 
enter the republic. Travelers usually find it most advantageous to 
canvass the republic from Guatemala City, in which selling agencies 
are logically established and to which city most of the general mer- 
chants of the interior come for their supplies. Generally speaking, 
it does not pay the exporter, unless dealing with individuals whose 
purchases warrant it, to establish direct relations with merchants in 
the cities outside of Guatemala, except in Quezaltenango, which is 
about 120 miles from the capital and in the heart of a very rich 
coffee and corn region. Many firms have found it advantageous 
to establish representatives at this place, which can best be reached 
from Champerico although a branch railroad is in course of con- 
struction from the Guatemala Central Railway. Similar arrange- 
ments may also be made in Coban, which is about 90 miles from 
the capital and is likewise the center of a rich agricultural district. 

Railways and Transportation. — Guatemala has excellent connec- 
tions by railway between the ports and the capital. There are other 
lines reaching some of the principal places, the total mileage be- 
ing 500. 

Articles Now Needed. — Many of the goods imported into Guate- 
mala previous to the European War came from Europe, Germany 
having supplied over two million dollars' worth. Trading with the 
other European countries may also be handicapped for a time, and a 
portion of that commerce may be obtained by American firms if the 
right effort is made. 

Articles Now Needed. — One of the opportunities of the American 
manufacturer is afforded by the sale of articles which have hitherto 
been bought exclusively in Europe, or the sale of which the Euro- 
pean nations have controlled. The principal articles of this charac- 
ter E^re the following: beer, mineral waters, cement, cutlery and tin,^ 



APPENDIX 451 

ware, barbed wires, leather, rice, dyes, candles, glass and glassware, 
miscellaneous cotton goods (including ready-made clothing), manu- 
factures of linen, tools and implements, paper, books, stationery, 
canned and preserved fruits, drugs and chemicals, perfumery and 
toilet articles. 

Foreign Commerce of Guatemala in Values 

Imports Exports Total 

1912 $9,822,462 $13,156,538 $22,979,000 

1913 10,062,328 14,449,926 24,512,254 

1914 9,331,115 12,754,026 22,085,141 



Distribution of Foreign Trade (four principal commercial countries) 

1912 

Imports Exports 

United States 

United Kingdom 

Germany 

France 

1913 

United States 

United Kingdom 

Germany 

France 

THE REPUBLIC OF HAITI 

Language. — ^French. 

Area. — 10,200 square miles. 

Popidation.— 2,000,000. 

Capital. — ^Port au Prince; population 90,000. 

Area Square Miles Popvilation Population Per Square Mile 



$4,532,361 


$3,863,829 


1,739,598 


1,458,492 


2,250,862 


7,653,557 


436,882 


969 


$5,053,060 


$3,923,354 


1,650,387 


1,600,029 


2,043,329 


7,653,557 


402,025 


21,268 





10,200 2,000,000 225.79 




Foreign Commerce 


Year 


Total Imports Imports from United States Total Exports Exports to United States 




Dollars Dollars Per Cent. Dollars Dollars Per Cent. 


1913 


10,935,000 6,499,000 59.4 17,273,000 842,000 4.9 




Per Capita 




Imports Exports Revenue Expenditure Debt Interest 



Dollars Dollars Dollars Dollars Dollars Dollars 

4.37 6.91 2.51 3.25 17.15 1.19 



4^3 

Length of Railways 


APPENDIX 

Telegraphs Railroads 


Telegraphs 


Date Miles Date 


Miles Miles Per 10,000 Per 1,000 

of of Inhabit- Square 
Line Wire ants Miles 


Length Length 
of Line of Wire 
per 10,000 per 10,000 
Inhabit- Inhabit- 
ants ants 



1913 



140 



1910 



124 



124 



12. 



.5 



Year 



Reventie and Expenditure 

Revenue Expenditure 



1913-14 



Dollars 
6,282,000 



Dollars 
8,127,000 



Funded 



Debt 
Unfunded, Including Total 

Floating Non-interest- in U. S. 

bearing, Etc. Currency 



Rates Interest and 
of Other Annual 
Interest Charges 



Currency Amount 

Dollars 12,763,000 

Franca 119,286,000 



Currency 
Dollars 



Amount 
7,077,000 



Dollars 
42,863,000 



Per Cent. 
21^-5 



Dollars 
2,984,000 



Location. — The republic of Haiti occupies the western portion of 
the island of Haiti. It is about 1200 miles from New York. 

Area and Physical Characteristics. — ^Haiti has an area of about 
12,000 square miles. It is very mountainous and has numerous val- 
leys besides many natural harbors. There are numerous rivers, but 
iu the main unnavigable. 

Climate. — The climate is naturally tropical, being particularly 
warm along the coast where it is hot and moist, although the sea 
breezes, which blow steadily, make the climate very agreeable. On 
the plateaus and in the uplands the latitude renders the conditions 
very delightful. Haiti is, on the whole, very healthful. The rainfall 
is sufficient for the needs of the island, but not excessive. 

Population. — The population of Haiti is estimated at 2,000,000, or 
about 200 per square mile. The people are chiefly of African blood, 
but there are some Europeans and Americans. French is the chief 
language spoken, and Haiti has come very greatly under French 
influence. 

Purchasing Power. — Haiti is extremely rich, possessing large min- 
eral resources which are quite undeveloped, besides a wonderful wealth 
in tropical agriculture. Because of the unsettled political conditions 
which prevailed prior to this time, the resources have not been ex- 
ploited, but with the signing of the treaty with the American Gov- 
ernment for the administration of the revenues of the island a rapid 
development will unquestionably follow. The purchasing power of 
the lower classes has been confined to the staple necessities, but there 



APPENDIX 433 

is an increasing sale for luxuries which will undoubtedly show a still 
larger growth during the next few years. 

Resources. — The chief resources of Haiti are agricultural. The 
products are mainly coffee (of which a high grade is produced), 
cacao, cotton, fibers, tobacco, etc. 

Other Resources. — ^Haiti exports large quantities of logwood, me- 
dicinal plants, etc. The raising of cattle is becoming increasingly 
important, and goatskins are one of the most important items in the 
exports. 

Mineral Resources. — The republic has large deposits of valuable 
metals — gold, silver, tin, sulphur, etc. — but thus far they have not 
been developed. The outlook for these industries in the future is 
very bright. 

Manufacturing Industries. — The manufacturing industries of 
Haiti are not important, being confined principally to the manu- 
facturing of soap, shoes, and small items for local consumption. 
The by-products of the sugar industry, rum and spirits, are 
produced. 

Transportation. — ^In the republic of Haiti there are a number of 
Jines of railway in operation, and the lines which have been pro- 
jected will undoubtedly be constructed during the next few years. 
The total now is about 70 miles, consisting principally of short lines 
in particular localities. The construction of the railroads will result 
in the development of splendid lands suitable for grazing, farming, 
etc. Most of the rivers are not navigable, but one, the Artibonite, 
can be used for about 100 miles. 

Chief Cities. — The chief cities of Haiti are : Port au Prince, Cape 
Hatien, Petit Goave, Port de Paix, Gonaives, Goave, Aux Cayes, 
Jacmal, and Jeremie. 

Best Method of Canvassing the Republic. — The chief city of Haiti 
is Port au Prince. It is here that many American manufacturers 
have establi