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 not insuperable 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 stores established 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 orders should 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.

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 industrious race, 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 internecine troubles, 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:

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:

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 cheaper and 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 the Republic'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 freight comes 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 a special 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:

Thus, from having a surplus of trade in Salvador over all other countries in 1909 to the value of $74,298 (as against $251,595 in 1908), we show a loss of $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!"