EntranceEntrance to Avenida La Ceiba at San Salvador.
Entrance to Avenida La Ceiba at San Salvador.
Entrance to Avenida La Ceiba at San Salvador.
AvenidaThe famous Avenida under construction.
The famous Avenida under construction.
The famous Avenida under construction.
As an instance of the German's enterprise may be cited the supply of cloths and hats for the natives which are found exclusively in Bolivia, the same individual trading in Peru, however, bringing out quite a different class of stuffs and styles for that country. The ordinary British or American manufacturer would probably contend that it would be useless or unprofitable to make special materials or designs of this kind so entirely unlike anything before attempted, and he would leave the matter just there. Not so with the observant travelling German. He first studies the question of demand, then he sends a complete range of patterns and samples from the looms of the native manufacturers to his house in Germany. In a few months' time there arrive in the country the German imitation, and, first in small, then in ever-increasing quantities, is built up a connection; and where the Salvadorean, Guatemalan, Bolivian, or Peruvian importer finds his materials and his hats, he buys most of his other miscellaneous European goods, so as to have but one account and one customer.
Then, in regard to credits, the German is most accommodating, granting payments over twelve, eighteen, and even twenty-four months, and never asking any interest upon his outstanding accounts. How he does it is a mystery, more especially as his prices in no way exceed, and in the majority of instances are below, the prices of other European and American houses, while the number of his bad debts is considerable. Probably there is a seamy side to all this promiscuous trading by the German houses; but if there is, there must likewise be some decided advantages accruing, since no one would credit Teutonic manufacturers and dealers with motives ofphilanthropy. But whether their commercial dealings with the Latin-American races be profitable or profitless, it is beyond question that they are extending, and extending rapidly—all of which means that there is so much smaller a field for other countries. These specimens of Bolivian hats, Peruvian dress-cloths, Mexicanrebosos, and Guatemalanmantillas, made in Germany, resemble in every way the native manufactures—so closely, indeed, that they cannot be told from the original except by an expert. The Germans are actually making all these articles, exporting them to these countries, and selling them there more cheaply than the native article. The question is, "Howcan they do it?"
It is decidedly useful to come abroad to such countries as the Latin-American States, if only to glean a few opinions as to the position which Great Britain occupies in the minds of the people of these regions. There are many individuals whose judgments are well worth recording, since while they may have gathered their ideas from trading only—and, indeed, few of them have been outside the borders of their own State—are sufficiently shrewd in their criticisms to make these latter worth observing.
The good people of Salvador, like a great many other experienced individuals, both in Latin-America and elsewhere, know the advantages to be derived from a system of Protection, and they are at a complete loss to understand how it is that Great Britain alone among the trading nations of the world can "afford"—that is the expression used—to admit a policy of Free Trade, and especially in view of the Empire's Colonies' well-known feelings on the subject. Here, as elsewhere, the advantages of Free Trade areadmitted; but without some form of retaliation it is absurd to suppose that any other nations will ever accept it. The opinion in general in these countries, where local manufactures are gradually commencing to make themselves a potent object of attention, is that Free Trade is desirable for all raw materials, but that a duty should be imposed upon all manufactured articles, whether they compete with local productions or no.
These Latin-American critics can but observe how the export trade of other foreign countries, such as Germany, the United States, and France, is continually increasing, while that of Great Britain, where it does not exhibit positive signs of decay, remains in a stagnant condition. This state of things is attributed to Great Britain's adherence to Free Trade, and the system of Protection adopted by its competitors. I have not encountered a single individual with whom I have discussed such matters as these who does not hold the opinion that, without reciprocity, real Free Trade is an impossibility. These intelligent people are just as convinced that, were Great Britain to tax those countries which protect their industries against it, they could before long be forced to adopt Free Trade also; and if they did not do so, Great Britain could and should continue to tax them until they did. They can see quite clearly that the interests of the producer and consumer are so closely interwoven and connected that any injury to the trade of the former at once reacts on to the latter; in slack times, as these Latin-American races have good reason to know, it is really the consumer who is most seriously affected, since his very existence depends upon the producer and manufacturer. Thus any action, they very sensiblyargue, which serves to revive or to promote trade must, of a necessity, increase the prosperity of all. It is strange, indeed, that such a view should be so clear to individuals living out here, and remain absolutely obscure to those thousands of individuals at home.
Our great strength in these Latin-American countries has always been our textile manufactures, and it is here that we are being attacked by both the United States and Germany. The former have successfully imitated most of the English designs, and these, combined with the better class of printing, the larger proportion of cotton, and the superior quality of the water employed in the dyeing of the material, have combined to make the American textiles more to the liking of the native buyers. So much is this the case, that the importers who formerly took British goods almost exclusively now send home American patterns and designs to be produced in England, even the United States trade-marks and lettering upon the piece-goods being followed as closely as it is possible to do without risking an action for infringement. The labels, instead of being printed, as heretofore, are now lithographed, and are likewise colourable imitations of the American ones; and it is sad to have to relate that, in order to keep together some semblance of British trade, it is apparently necessary to pass off the products of our looms as "American."
So far there has been but little attack made upon British bleached cotton goods, the proportion of which is 80 per cent. in favour of our country; but German importers, of whom there are an ever-increasing number in Salvador, are now seeking to increase the supply of these goods from the Fatherland. The United States,as yet, have done little in this direction. In yarns we seem steadily to be losing ground, mainly, as I understand, on account of our poor colouring. The people of these sunny lands insist upon the brightest of bright hues—the most vivid scarlet or vermilion for Turkey-red yarns; the deepest of blues; the prettiest of greens. The British products are lacking in these, so much so that many of the Turkey-reds spun in Scotland are sent to Germany to be dyed before they are exported to these countries as "British" yarns. Our next great competitor in regard to textiles is France.
British trade has been no more fortunate in regard to its machinery, hardware, or iron and steel trade connections with Salvador, and here it is the United States that is met with as a powerful and resourceful rival at all times. The great combine which was formed in the United States in 1909 to supply the wants of Latin-America with all iron and steel productions, has met with an immense success, so much so that even its organizers have expressed astonishment. The geographical advantages possessed are not the only ones. The United States Steel Produce Export Company is enabled to handle orders more promptly and much more cheaply than any European factory could do, but with these commanding points in its favour the Company is not satisfied. It has organized a system of canvassing either directly by personal application or by mail, which is both timely and effective. Immediately it is known, or even suspected, that any new railway or other construction is about to be entered upon, the Company despatches an agent to see the promoters, or, in the absence of this, forwards by mail a complete library of handbooks, cost estimates, attractive illustrations, drawings and code-lists,even prepaying a cable message when business is likely to result. The terms offered are often such as no European could or would tender, and, even if it were a question of direct competition, the Steel Company would probably win-out; but the prices which it quotes and the conditions which it imposes are of so tempting a nature that they stand alone.
It is to be remembered that practically the whole of the transportation arrangements in Central America, Salvador excepted, are in the hands of Americans, whose carefully arranged Pan-American Railway System is now fast approaching practical realization. When completed, it will be possible to journey from New York to Panama without change of car, and what this means for quick and cheap freights can be realized. In all probability there will be severe shipping competition to meet with, however, more especially on the part of the Tehuantepec Railroad, which is already carrying an enormous traffic, and is regarded with envious eyes by the Panama Railroad Company. With the exception of the Tehuantepec route and the Salvador Railway, the Americans now control the transportation arrangements of Central America, being thus enabled to regulate the freight charges upon all merchandise entering these countries. Already several cases of unfair discrimination have been recorded, such, for instance, as charging a British commercial traveller in Costa Rica a sum of $75 (£15) for the conveyance of his samples between the Port of Limón and the capital of San José, while an American drummer was actually granted a rebate of 50 per cent. off the ordinary rates, his expenses amounting to little more than $20 (£4) all told. In both cases the weight of the samples was the same.
British trade declines—Suggested remedy—Distributing centres—Trading companies and branches—Unattractive cheap goods—Former hold upon Salvadorean markets—Comparative statistics between Great Britain, Germany, and the United States—Woollen and cotton goods—Absence of British bottoms from Salvadorean ports—Markets open to British manufacturers—Agricultural implements.
British trade declines—Suggested remedy—Distributing centres—Trading companies and branches—Unattractive cheap goods—Former hold upon Salvadorean markets—Comparative statistics between Great Britain, Germany, and the United States—Woollen and cotton goods—Absence of British bottoms from Salvadorean ports—Markets open to British manufacturers—Agricultural implements.
While everyone who has studied the question of British trade abroad is practically agreed that it is at present suffering from more than the average number of disadvantages, few have any real remedy to suggest that might possibly put a different face upon matters. One idea which has been suggested to me, however, is worthy of careful attention. This is to establish throughout the Central and South American States a number of retail British houses which shall act as agents and distributing centres for our home-made goods. I acknowledge that the notion is not a new one, since the enterprising Germans, who are, as I have shown, our keenest competitors in this part of the world, have long conducted such retail establishments, and have found them most beneficial in the extension of their business with the Latin-American countries. To open up new branches without the aid of some such method, it may be said at once, is almost, if not wholly, impossible. I admit that there are difficulties which will have to be encountered, as there are in all enterprises of this nature; but that these are notinsuperable the Germans have themselves very clearly demonstrated.
In the first place, the establishment of these retail establishments, if undertaken at all, would have to be upon a large and a very comprehensive scale. For this reason it is possible that few British manufacturers would have the pluck to enter upon the project. The result of such timidity is that, in the minor branches of trade in the Latin-American Republics, the volume of which is continually increasing in importance side by side with the increase in the demand for the small luxuries and the conveniences of life, the representation of British manufactures is becoming an insignificant factor.
The remedy—or at least a partial one—for this, as already indicated, lies in the formation of large trading companies, which would combine a retail and wholesale business in all branches of imported goods, with the purchase of local produce for export. Apart from the advantages which such a company would enjoy, due to the magnitude of its operations over ordinary importers, its retail department would afford a practical means of advertising and placing upon sale all kinds of novelties, which naturally would serve to continually widen the scope of its operations. It would likewise be in a position, better than that of any private firm, to receive goods for sale upon commission; and by exporting produce it would be able to effect considerable economies in its remittances (especially in such countries as Salvador and Guatemala, where the exchange is often altering), while at the same time it could afford to pay better prices than its competitors. The question is already really answered by the success of the co-operative storesestablished in England, and it is upon some such basis as this that the scheme for the Latin-American Republics is laid. It must be remembered that in all of these countries the difference between the wholesale and the retail prices is enormous, and that the dealers' profits are exceedingly high. It is an idea which Mr. Lionel Carden, who is, perhaps, one of our greatest Pro-Consuls, and particularly gifted with common sense, has frequently urged in his reports to the Home Government, and perhaps for this very reason it has never been adopted. It is one which I cordially commend to the careful consideration of my readers.
Yet another point to which the attention of British manufacturers may be drawn is the unattractive manner in which the cheaper classes of goods are turned out. I have in previous publications shown how trade with the Latin-American countries is injured by the extremely commonplace and often ugly coverings and wrappings used upon boxes or bindings. The question is, "Why should an article, because it is perhaps cheap, be made particularly ugly?" The long-established custom among our manufacturers of using the commonest and crudest of coverings is matched by their fondness for finishing off their cheaper articles in the dullest and least attractive of colours or casings. This is in striking contrast to both American and German manufacturers, whose artistic taste is shown in the manner in which their goods—often mere rubbish though they be—are packed, and with very excellent results, so far as the export trade is concerned. In an age like ours, when lithography of every description is so cheap and taste in design so improved, it seems wholly absurd that good ordersshould be continually lost on account of their non-adoption.
I have heard of another idea which I may pass on to manufacturers of small articles enjoying a large sale in these countries, and this is to procure, through anyone living in the country, photographs of the rulers—the Presidents and Vice-Presidents—and use them lavishly upon their labels and box-covers whenever possible. The people are extremely fond of collecting these cheap oleographs and pasting them upon their walls and windows; and in all parts of South and Central America may be seen thousands of the pictures of King Edward and Queen Alexandra, of the Kaiser, and even of famous actresses. How much more readily would the features of a familiar ruler or a popular Minister help the sale of a cheap material or a low-priced article of any kind? The desire to secure something for nothing—or as an extra "thrown in"—is as predominant in Latin-America as elsewhere in the world, and must be pandered to.
NewView of the new Avenida leading to San Salvador, taken from the north.View of the new Avenida leading to San Salvador, taken from the north.
View of the new Avenida leading to San Salvador, taken from the north.View of the new Avenida leading to San Salvador, taken from the north.
View of the new Avenida leading to San Salvador, taken from the north.
View of the new Avenida leading to San Salvador, taken from the north.
Salvador is one of the many Latin-American States whose great richness and prosperity repose in their immediate future. In area it is one of the smallest of the Central American Republics, but it is in no whit less important from a prospective development point of view. Its superficial area is but 7,225 miles, but its population is considerably over 1,000,000, which gives it an average to the square mile much in excess of either Guatemala, Costa Rica, or Nicaragua. It is, moreover, an easier country to deal with, physically considered, since it is in fully three parts of its area quite amenable to cultivation. It is remarkably well-watered, it is richly endowed with mineral deposits, and its people are a quiet, peaceful, and industriousrace, well-disposed towards foreigners, and with as much distaste nowadays for revolutions and internecine disturbances as their immediate neighbours would appear to display for similar diversions.
In a word, Salvador seems to offer at the present time an excellent field for the investment of both capital and enterprise. It is quite clear that the favourable position existing is also appreciated, since the country is, and has for some time past been, full of the "commercial ambassadors"—in other words, of commercial travellers—representing the manufacturing trade of the United States and of many European houses, mainly German.
While several British firms still maintain their connection with the Republic, there are to be found barely half a dozen British houses throughout the length and breadth of the country. This is all the more surprising since the names—and nothing but the names—of many one-time influential British firms are to be seen on the door-posts and signs of the shops. The old-established emporiums in San Salvador, in Sonsonate—the next most important trading centre—in Ahuachapán, in Santa Ana, in Chalatenango, and in Sensuntepeque, all tell that formerly they imported their goods through English establishments almost exclusively, and that British travellers called upon them at regular intervals for their orders. To-day, the greater part of the orders, with some notable exceptions, are taken by German and American travellers, and a British "drummer" is about as rare an object as the fabulous Dodo. "We should be glad enough to see them," added one of my informants; "but they seem to have forgotten that such a place as Salvador exists."
The President of the Republic, General Fernando Figueroa, who retired last November from office, a very intelligent and charming man, in conversation with me, dwelt in the same strain concerning the disappearance of the Britisher as a trading factor from the Republic of Salvador. He frankly expressed both his regret and his surprise that the desirable commerce of this wealthy and promising Central American State should have been practically abandoned by the shrewd and enterprising Northerners, when they had at one time so firm a hold upon its commercial relations.
The Germans, who have to all intents and purposes taken possession of the connections, but not of the affections, of the Salvadoreans, which formerly were the almost exclusive holdings of the British, are now to be found everywhere. They not alone year by year further extend the tentacles of their trade by all usual means and methods, but they make a point of coming out to reside for a number of years; and this is one of their strongest holds upon the country. The Germans are prepared to endure any personal sacrifice in the way of comforts or conveniences to make and maintain profitable commercial relations with the people of the countries among which they elect to trade. In the majority of cases they open branch-houses in the chief cities of these countries, sending either one of their partners, or, failing him, one of his junior relations, to live in the State and personally conduct the business of the house and closely study the conditions of the country. Dozens of bright, intelligent, and enthusiastic young Germans are met with, who have been, perhaps, but a few years away from school or college, serving in their shirt-sleeves,without a blush or sense of humiliation, behind the counters at the small country stores, opening their establishments at 6 a.m., and closing them at 8 or 9 p.m., Sundays and weekdays alike.
I have asked many of these young fellows how many years they have been in the country, and how many more they mean to remain. Some have been quite new arrivals; others have been, perhaps, serving in Mexico, Costa Rica, Guatemala, and other of the Latin-American States; but none of them, apparently, think of going home, even upon a temporary visit, in less than ten years, and to all appearances they are perfectly happy to be where they are, not even saving money, but building up a trade connection for themselves or for their employers, as already indicated—in most cases their relations—which may one day prove valuable.
I may say that, although these same young Germans live quite like the people of the country, eating the same food, occupying the same kind of houses, rising and retiring at the same primitive hours, and not infrequently even marrying into their families, they maintain all the cleanliness of their own lives and habits, and are always as orderly and as well-conducted in all relations of life as any self-respecting young man need be.
While it is true that the Germans do not succeed, any more than North Americans, in ever endearing themselves to the inhabitants of these countries of the South, they do most assuredly earn the respect and the esteem of their neighbours, and succeed in living for many years in their countries, surrounded, as is found the case, by occasional revolution and internecinetroubles, without in any way becoming involved in the vortex.
This cannot be truthfully said of the average American, who comes down either upon a business or a pleasure trip; the political affairs and the border complications seem to have a peculiar and dangerous fascination for him, and, as in the case of the celebrated "Little Jack Horner" of nursery memories, he must have a finger in the pie. As often as not, the "plum" which he at length succeeds in pulling out proves to be a fairly indigestible one, and he is compelled to drop it and make a bolt from the kitchen rather precipitately, too.
It would appear, from the statistics which are given in a previous chapter (see p.106), that Great Britain in 1909 led in the net value of the country's foreign imports. The figures, however, must not be read in the light of competition only, but in the much more disturbing aspect of the closeness of their totals to the completion attained by the most serious rivals to the United Kingdom—namely, the United States and Germany. The returns for 1910 prove this.
Comparison has been made with the figures of 1904 (which were selected for the special purpose referred to), and I now desire my readers to glance at some of more recent date.
For the whole of the Republic the foreign importation of merchandise for 1908 was as follows: Packages = 267,791; kilogrammes = 18,830,121. Value: $4,240,561.21. Out of all the different countries concerned, we are interested for the moment in three only—namely, Great Britain, Germany, and the United States of America, and these returns stand as follows:
Packages.Kilos Weight.Value.$Great Britain42,6133,740,1381,539,046Germany29,6052,542,732442,860United States146,8579,765,0561,287,452
Looking into the details of the returns, it seems that British textile and cotton manufactures have been the most vigorously attacked by both the German and the American competing houses. The shares respectively for 1909 were as follow:
Total Value.Great Britain$957,172.07United States451,692.72Germany57,376.64
In woollen and cotton textile goods there is not any further improvement in the trade of the United States, the 1910 figures being $300,075; but those of Germany stand at $71,080, as against $763,171 for Great Britain. From this it will be observed that in this respect they "who were last may yet become first," a very significant fulfilment of the Biblical prognostication so far as Great Britain is concerned. The chief articles of export of "other countries" to Salvador are iron and hardware, $73,447.96; sacks for coffee, $92,937.38; and various articles, $132,660.04. Germany is represented by an immense number of different articles, but none of them in net value touch very high figures. The most important is hardware, which is represented by a value of $69,092.25, while linen goods stand at $57,376.64, as against the British total of $957,172.07.
A somewhat different kind of trade is done in this class of goods to that most general, for instance, in Guatemala. There the natives demand a cheaperand more flimsy kind of material. In Salvador they would appear to prefer a somewhat higher class of goods and of a rather more sober pattern. The Germans are catering actively for this market, and although, as will be observed, they have a very long headway to make up before they approach to within the region attained by either the British or the American figures, the persistency with which the Teutons are pursuing these Latin-American markets makes their competition a serious factor for the future (see p. 149).
In regard to exports from the port of Acajutla, a few words will suffice to explain the situation. France stands first as the recipient of the Republic's products from this particular port. The figures for the first half of the year (1909) show that France took coffee to the value of $749,946, Germany came next with $667,304, while the United States stood third with $506,064. Great Britain did not figure at all in the trade of Acajutla; but from the port of La Libertad the United Kingdom took goods to the value of $106,043 in coffee, against $127,740 by Germany, $311,093 by France, and $124,700 by the United States.
$874,958.32 represents the total value of the coffee shipped from the port of La Libertad for the six months of that year. This business with England must have been carried on in foreign bottoms, for, as mentioned elsewhere, a British vessel had not been seen in the port of La Libertad for some years, a fact vouched for by the Comandante of the Port, who keeps the records of all ships arriving and departing. The values, it is as well to mention, are given in gold dollars, the equivalent in Salvadorean dollars being $2,186,495.80. In regard to theRepublic's trade generally, the countries with which it does its export business stand in the following order of importance: France, Germany, United States, Italy, Austria, Great Britain, Spain, and "other countries."
Reference may be made to the trade done in the article known as balsam, which is a product peculiar to Salvador. Hamburg is the principal market for the article, and its quotations fix the price for the world. Within the last two years the price has fluctuated from 12 to 22 marks per kilogramme—say $2.86 to $5.24 per 2.2 pounds. The price at the beginning of 1909 was 14 marks—say, $3.33 per kilogramme. The method of obtaining the balsam is very curious, and is described at some length in Chapter VII.
Manufacturers of agricultural implements and machinery for the Latin-American markets should remember that it is unnecessary and undesirable to make the articles in such a manner as to last for ever. While durability and substantiality are no doubt excellent features of machinery of all kinds, and in connection with British-made goods have always been much depended upon, it is quite possible to carry the virtue too far. It must be borne in mind that out "in the West" the same ideas do not prevail as at home, and in any case these countries are still in the experimental stage, when new industries are continually superseding the old. The Americans and the Germans both understand this, and consequently they are ousting the British-made heavier goods from the market.
What are required are light ploughs, watering-carts, hay-rakes, seed-sowers, and similar machines, but of a light yet strong character. The question of freightcomes in very seriously, since not only is the steamship charge to be considered, but the frequently long overland journey upon mule-back. By the time that the implement or machine has reached its destination, it frequently costs double the invoice price. All easily detachable and duplicated-part machines are very much more in demand than other kinds, and they are but seldom found in Central America of British manufacture. But there is absolutely no reason why they should not be made, and as freely sold, as the American classes, which are to be seen displayed—painted in all the gaudy colours of the rainbow—in practically every hardware store in Latin-America. No small part of the dealers' profits, either, is derived from supplying duplicate parts, due to losses and breakages. The purchasers seldom, if ever, complain of breakdowns, and they prefer discarding their latest purchase for a new, and maybe an untried, invention, which is advertised to do all the wonderful things which the late implement did, in addition to numerous others which it could not do.
Small pamphlets, printed in Spanish, showing, with the aid of drawings, how the machine or implement may be detached, cleaned, repaired, and again put together, are also to be recommended. I would even suggest sending out with each article a brightly-coloured illustration of the machine in operation, since purchasers are very fond of hanging such upon their walls; and in the absence of any other picture I have often seen the flaring advertisement of some totally different machine, such as a plough or a reaper, occupying a conspicuous position upon the house-walls of a farmer's establishment. If he were sufficiently fortunate to possess an actual illustration of his own particular machine, I think that he would gladly endow it with aspecial frame, and thus advertise it freely for the benefit of the manufacturer. It is, therefore, well worth while for dealers to give such matters their attention. The initial cost is very small, while the corresponding advantages are undoubtedly great. At least our American and German competitors think so, and have the courage of their opinions.
The present chapter could hardly be more usefully completed than by adding the latest trading returns to hand from the Republic—up to July, 1911—which provide the figures for the whole of the year 1910. These show that what has been so long threatened has actually occurred—Great Britain has lost to the United States its first place upon the Imports List; while upon the Exports List, it stands fifth. Here let the statistics speak for themselves:
1908.1909.1910.Imports:$$$United States1,287,4521,344.3161,346,598Great Britain1,539,0471,438,6141,165,993Great Britain+251,595+74,298-180,605Exports:$$$$United States2,046,3981,838,3022,280,156+441,854Germany1,038,305955,8881,584,627+428,739France1,417,4281,146,3161,097,118-49,198Italy374,434440,163609,674+209,511Great Britain449,167440,359480,737+40,278
Thus, from having asurplusof trade in Salvador over all other countries in 1909 to the value of $74,298 (as against $251,595 in 1908), we show alossof $180,605 in 1910. While the United States, Germany, and Italy all showed an increase in their purchases from Salvador of considerable amounts, Great Britain records the contemptible advance of $40,278! We may well echo Syrus's maxim: "Heu, quam difficilis gloriæ custodia est!"
British fire apparatus—Story of a British installation—Coffee and sugar machinery—Cane-mills—Fawcett, Preston and Co.'s installations—High reputation enjoyed by British firms—United States coffee equipment—German competition—Methods of German commercial travellers—Openings for British trade—Effect of Panama Canal—A libel upon Salvador manufacturers—Salvador Chamber of Commerce.
British fire apparatus—Story of a British installation—Coffee and sugar machinery—Cane-mills—Fawcett, Preston and Co.'s installations—High reputation enjoyed by British firms—United States coffee equipment—German competition—Methods of German commercial travellers—Openings for British trade—Effect of Panama Canal—A libel upon Salvador manufacturers—Salvador Chamber of Commerce.
picturesqueView of the picturesque town of Marcala.
View of the picturesque town of Marcala.
View of the picturesque town of Marcala.
There are, on the other hand, certain classes of machinery and appliances of British manufacture which can be met with not only in practically every part of the world, but which no amount of foreign competition would seem to seriously affect. Among these specialized manufactures may be included, coffee and sugar machinery and fire-engines. The latter stand, indeed, quite alone as effective and universally known features of British construction, and I do not in any way exaggerate when I state that in no part of the world to which I have been—and that is equivalent to saying "everywhere upon the face of the habitable globe"—have I failed to see some kind of fire-extinguishing apparatus, old or new, of British manufacture. In the Central American States the reputation of such appliances stands very high, as was exemplified at the time of one of the several serious conflagrations which have afflicted San Salvador, and which occurred some four years ago, when a great portion of the capital city was for a time in jeopardy of destruction. One of the principal churches wasactually destroyed, and this so affected the people that the Government determined to invest in fire-engines and necessary appliances.
As soon as this determination became known, the officials were inundated with the catalogues of manufacturers from Germany, France, the United States, and other countries. An emissary from America even came down personally from the States to canvass for the order; but the reputation of the British fire-apparatus was strong and its general effectiveness was generally recognized, so that the Government did not hesitate in its decision to follow Mr. Mark J. Kelly's advice to award the order to a Greenwich firm. A larger type of the Merryweather steam-engine, with a very complete outfit for the firemen, has since been added, through the instrumentality of the same gentleman.
Further proof of the utility of the English engines was afforded later on, when yet another serious and disastrous fire occurred in San Salvador, the work, it is believed, of an incendiary, with the result that an entire block of fine buildings, including the National Theatre, was burned to the ground. It is admitted by everyone that but for the services rendered by the fire-engines, and not a little also by the heroic work of the local brigade, the greater portion of the city, in all probability, would have been destroyed. It is the intention of the authorities, I understand, to further increase the effectiveness of the service by ordering more hose and additional salvage appliances.
In conversation with the former President of the Republic, General Fernando Figueroa, upon one occasion, he paid an eloquent tribute to the excellence of British machinery of all kinds. He has had, itmay be mentioned, some experience of the manufactures of other countries as well as of our own. He mentioned to me the fact that he recollected at one time that many British manufactures, not only of machinery, were to be met with largely in Salvador, and that the names of several of the large importing firms and store-keepers in many of the other cities of the State were British. To-day there are but five or six English houses to be found in Salvador. On the other hand, as previously pointed out, one meets with many German names, these ubiquitous and enterprising trade rivals having firmly established themselves in the Republic, as they have also succeeded in doing in Guatemala and Costa Rica.
In regard to coffee and sugar machinery, of which mention has already been made, this trade is split up between the two houses of John Gordon and Co., of London, and Marcus Mason and Co., of New York. Both make excellent apparatus for the purpose of treating the berry and cane, the Germans in this particular direction finding but very little favour even among their own people. I visited several of the largefincasor estates, where both coffee and sugar are treated, and in all such instances the properties were either owned or being managed by Germans. In all cases the machinery was either British or American, and in a number of instances both were freely employed.
Upon inquiry, I was informed that the sugar machinery turned out by German manufacturers in the majority of cases is too complicated and delicate for practical purposes, and that it needs an expert mechanician—a decidedlyrara avisin this part of the world—to understand the apparatus or to carryout the necessary repairs when things go wrong. In all of the factories visited by me the equipment, with the exception of the boilers and some of the vertical donkey-engines for feeding them, came either from Great Britain or the United States of America.
One excellent testimonial to the superiority of British machinery was afforded at the Laguna Finca, belonging to Herr Fédor Deininger, who, as may be assumed from his name, is a German proprietor. Here I found a complete sugar-manufacturing plant, consisting of cane-mill, liquor pumps and tanks, defecators, juice-heaters, clarifiers and evaporators, steam eliminators, filters, and, indeed, everything but the centrifugals, which alone were of German construction, had been provided by the Liverpool firm of Messrs. Fawcett, Preston and Co., Limited, of the Phœnix Foundry. The date upon this installation is "1867"; and Herr Deininger, the present owner of the factory, who acquired it from his uncle, Herr Bogen, some twenty years ago, declares that it is quite unnecessary to replace the installation, "as it is still working most satisfactorily." Of this I, indeed, assured myself by personal observation. I venture to believe that this is an altogether unique instance of a sugar-machinery installation, erected over forty-three years ago, and which has been in constant operation during that time, day by day, Sundays included, being found in a sufficiently sound and workable condition as to need nothing more serious than an occasional replacement of a small part or a temporary stoppage for overhauling.
In Salvador there are several cane-mills of quite recent construction throughout, and in most instances these are the manufactures of Messrs. Fawcett,Preston and Co., Limited, who, it would appear, have erected similar installations in many other parts of the world, since I have come across them in Southern Brazil, Cuba, India, and the Argentine. The cattle-mills, which are peculiarly adapted for this country, where oxen are used everywhere and for all purposes of road-hauling, are made with three horizontal rolls, secured upon strong gudgeons, running in adjustable gun-metal bearings, supported and held in place by two massive head-stocks bolted to a strong bedplate. This latter extends under the rolls from one side of the mill to the other, serving as a juice-pan attached to it. There is also fitted an upright shaft, turning in a footstep secured to the mill bedplate, and in a pedestal bolted to an entablature, supported by four pillars, which form part of the head-stocks. To this upright shaft is keyed a bevel-wheel, which gears into another keyed upon the toproll gudgeon. In addition to the bevel-wheel, the shaft is provided with ironwork for carrying wooden steps for the hitching of oxen, horses, or mules.
Of recent years Messrs. Fawcett, Preston and Co., Limited, have introduced an improved type of Rousselot cane-mill, by which the returner-bar and knife are reduced to the smallest dimensions by a special patented arrangement of bringing the side-rolls as close together as the top cap-bolts will admit. These latter are inclined vertically to one another, and the effect of this arrangement is to reduce the width of the knife, and consequently the friction of the cane passing over it, and also economizing the power and consumption of fuel necessary to drive the mill. The special feature of the Rousselot patent is to be found in this improvement—that is to say, that the strain istaken off the cast-iron head-stock by through bolts, which secure against the breakage of the head-stocks. Greater ease is also found both in the erection and the taking down of the mill. These rolls are made of a special mixture of cast-iron, selected as the best to withstand the wear and tear to which they are necessarily subjected. The gudgeons are of the best hammered scrap-iron, and are forced into the rolls by means of hydraulic pressure, while, in addition, the rolls are keyed on to the gudgeons. All the head-stocks, mill-bottom, and crown, are of cast-iron.
Yet another improvement which this firm have introduced into their sugar machinery is in connection with the juice-heaters. These now consist of three cylindrical heaters of a compound type, with Chapman's patent steam separator, and which are fixed horizontally side by side, being so connected that while any one of the three is out of use for cleaning or repair, either of the other two can be worked as a high-pressure or finishing heater, and the other as a low-pressure heater, thus economizing considerable fuel. The steam separator worked in connection with these heaters economizes about 8 per cent. of the steam required in the multiple effect apparatus for evaporating the cane juice, since by this arrangement the steam that would otherwise flash off from the superheated juice into the atmosphere and be lost is collected and conveyed to the heating drums of the multiple effect, and so utilized for the evaporation of a corresponding amount of water from the juice. Improvements are also to be observed in connection with the subsiding defecators, the steam eliminators, bag-filters, the apparatus known as the "Coffey" still.
Reference has been made above to the vogue whichBritish-made coffee machinery, and especially that of Messrs. John Gordon and Co., of London, has had in the Latin-American States. So far as Salvador is concerned, I understand that this class of product stands in serious danger of being ousted from the market by American competition. While it is generally admitted that none better than British machinery for coffee, rice and cocoa can be obtained, the very success of these manufactures seems to an extent to have resulted in a slackness to obtain further orders, and the field, thus neglected, and always most carefully watched, is being occupied by the Americans. I am informed, for instance, that to-day fully 65 per cent. of the coffee machinery to be found in Salvador is of American make, and that fresh orders are being despatched frequently for further supplies. I also learn that no British traveller in this class of machinery has been seen in Salvador for fully five or six years, while, on the other hand, the largest of the United States manufacturers has an agent, in this case a young German speaking Spanish fluently and possessing a very pleasant manner, who is continually travelling up and down the country, visiting the differentfincasat which, apparently, he is always welcome, submitting drawings, plans, and estimates for improvements and new installations.
Moreover, this young man is an expert mechanic, and most skilful in effecting repairs and alterations to machinery and plant installations. It is not at all difficult to understand how such an individual makes headway with the kind-hearted and hospitable Salvadorean estate owners, and how he succeeds, not alone in obtaining orders from them for their coffee and other machinery, but in introducing German manufactures ofother kinds; for your German traveller is always open for business, and, indeed, appears to live for very little else. Thus, it would seem, unless some "move" is made by British manufacturers of coffee and rice machinery in this part of the world, at no distant date the trade will be snatched from them; and that once done, nothing will probably succeed in bringing it back again. Lost ground of this character is seldom recovered, and it may be hoped that those manufacturers who are mostly concerned will take the hint here conveyed, and set out to put their neglected houses in order. The coffee industry of Salvador isthemost important of all its exports, and its pursuit is the mainstay of the country. In 1910 the value was $5,130,404, out of a total export trade of $7,294,602.
Among the British goods which I have more particularly noticed to be well displayed in the retail stores are chemical preparations and drugs. The Salvadoreans, like most Latin-Americans, are large users of all kinds of patent medicines; and although a great many of these come from the United States, those of British manufacture are not at all poorly represented. Such articles as Eno's Fruit Salt, Apollinaris and Apenta Water, Pears' Soap, Odol, and many of the better-known vegetable pills, are to be found here—except Cockle's, which are a very difficult drug to obtain, although in my opinion one of the most efficacious. The chemists' shops are full of all kinds of other drugs and patent medicines, and apparently the proprietors conduct a remarkably good trade.
Relative to the trade of pharmacy, a new law is proposed which will regulate the practice of this trade, and which will create a Faculty of Pharmacy and Natural Sciences, to which all chemists and druggists,whether native or foreign, operating in the country, must belong. In default of membership in this faculty, a special licence will have to be taken out for pharmaceutical practice.
Drugs, medicines, and perfumery to the value of $82,676 were imported in 1910.
In regard to British wines and spirits, these are hardly ever seen except in the houses of the few British residents who may have imported a small supply for their own use. The total value of victuals, wines and spirits, however, is not inconsiderable, amounting in 1909 to about 12,748,249 kilos, representing a value of £179,431, which, however, contrasts with 15,689,307 kilos, or a value of £211,819, for the previous year. The wheat, rice, cereals and breakfast foods, which are not as well known here as in other parts of Latin-America, come from the United States, which also send here by far the greater part of the lard, tallow, dairy produce, sweetmeats, and dried and smoked meat and fish. The United Kingdom shares in the salt trade, but this is only small.
I am of opinion that a better trade could be done by exporters of British beers and liquors, which would be purchased here to a more considerable extent. The number of cafés and restaurants is increasing, and the tendency of the inhabitants, especially in good times, is to dine from home. Although beer is brewed, it is more the beverage of the workers than of the well-to-do.
In regard to the tobacco and liquor trades carried on in Salvador, a record of the progress and management is maintained by means of the regulations which have been introduced covering the operation of cigar and cigarette factories and of breweries and bottling establishments in the Republic. This control has beenin vogue since June of 1909. Proprietors of these establishments are required to furnish to the proper authorities a sworn statement as to the capacities of their plants, the number of the operatives employed, etc. The analyses previously ordered for wines and liquors is also extended to beers, both manufactured and imported.
In regard to the duties on wines and canned goods, imported liquors pay a duty of 50 cents; heavy and white wines, 25 cents; and old table wines, 5 cents—per quart bottle. Canned goods pay 10 cents per kilo (=2,204,622 pounds). These duties are in addition to Customs charges.
What effect will the completion and opening of the Panama Canal have upon Salvador and other Central American countries? I have often been asked this question, and perhaps this is as good a place as any in which to answer it. That capital from North America will flow more abundantly into Central America after the completion of the great waterway is a practical certainty; but I do not consider that there will be any such considerable augmentation, nor that the difference will be so prodigious, in regard to results, as some critics imagine. For many years to come the United States, with its great area and its many undeveloped resources, will need more capital—much more, indeed, than it can conveniently find among its own people; that is to say, it will have to borrow from Europe in addition to saving all that it can on its own account. The old world has nowadays fewer opportunities for industrial and commercial expansion; money is comparatively cheap, and all new countries on the other side of the Atlantic offer the inducement of higher interest.
How much of this investment will be made with purely American money? The Yankees are certainly becoming more and more enthusiastic, and at the same time more and more reckless, in their foreign investments, and especially in regard to Latin-American countries. Nevertheless they have a long way to go before, in actual figures, they can in any way approach the value and extent of British foreign investments. In regard to the return which their investments bring them also, they have, on the whole, proved far less fortunate. In all probability, British foreign holdings in South and Central America to-day approach the sum of £500,000,000 (=$2,500,000,000), and upon this gigantic amount of capital they earn a fair average of 51⁄8per cent. per annum, allowing for the higher and the lower rates of interest paid, and which amounts to anything between 25 per cent. and 35 per cent. on some land shares, and the modest 41⁄2per cent. and 43⁄8per cent. earned upon railway debentures. I also include in this return some "bad eggs" among a very diversified list of investments.
I should say, on the other hand, that American foreign investments would not amount in the aggregate to more than £200,000,000 ($1,000,000,000), and of this at least seven-tenths are invested in the Republic of Mexico, and probably two-tenths in enterprises in Canada. American foreign investments are, in a large measure, tributary to great concerns located in the United States, which have their agents in foreign countries looking after their local interests. From this considerable invested amount it would be impossible to estimate a higher return than 23⁄4or 3 per cent.; for while many of the investments—such as the Standard Oil interests in Mexico and the many bankinginterests in Cuba, Panama and other countries—yield often a sensational amount of profit, so much capital has been lost through rank speculation and dishonest management, and so little sound judgment has been displayed in the matter of sound original selection, that a considerable portion has been irretrievably lost. This has been the case in the Sonora district of Mexico (especially in the Cananea Copper-Mines); in the gold and silver mines of Guanajuato; and in connection with some of the railways of Costa Rica, Guatemala and Ecuador, so that what has been made on the one hand has, to an appreciable extent, been lost on the other.
Thus I do not anticipate any very pronounced rush of American capital into Central America merely because the Canal will have becomeun fait accompli. On the other hand, the United States trade and commerce must feel benefit from the speedier means of transport. Already the United States control 60.8 per cent. of the importations into Mexico, and 89 per cent. into Panama; something over 70 per cent. into Costa Rica, and about 60 per cent. (increasing year by year) into Guatemala. With the active assistance of the Washington Government, in conjunction with the compulsory financial "assistance" forced upon them by the J. Pierpont Morgan Syndicate, Honduras will also shortly be taking about 80 per cent. of the United States goods as well as acceptingnolens volensthe loan of United States capital.
It is, however, the Republics of Ecuador, Peru, Bolivia and Chile which will become better markets for the United States through the medium of the Panama Canal; and while I was travelling recently upon the west coast, I particularly remarked thearrangements which were being organized to handle this anticipated additional trade with all efficiency and despatch. American agents were busy opening-up new branches or appointing local representatives to handle the goods destined to be consigned in increased quantities; German houses, already established, were also arranging their houses and remodelling their order-books to deal with the expected reorganization of North American trade, all of which proves that a very substantial belief exists in the approaching trade "boom" consequent upon the opening, in 1915, of the Panama Canal.
What attention are British manufacturers and British agents paying to this all-important question? This is very easily answered—None!
The first place in the Imports from European countries into Salvador is given to cotton-manufactured goods, nearly the whole of which, I may again point out, come from Great Britain. In 1906, out of a total of $4,000,000, which represented the value of the imports, cotton goods figured for $1,500,000, or 30 per cent. of the total. Of this $1,500,000, Great Britain was responsible for $974,964, which represented woven goods, in addition to $141,328 representing the value of thread. The United States came second on the list, with textiles valued at $409,072, and thread $2,885, although in the list of this classification America was outranked by both Germany and France, which sold thread to Salvador to the value of $8,349 and $4,160 respectively. These two countries exported textiles to Salvador to the amount of $32,199 and $71,890 respectively, while Italy figured for $54,952.