Now, if that proposition be true, it is basic as regards all our thought of
commerce in the coming days, for how shall the twelve billions with its interest
t>e paid ? In goods ? Those who owe have not the goods with which to pay the
twelve billions and if they had, it is not at all certain we should want them at the
time and in the quantity and the kind in which they might be offered for payment.
Before the war we accepted services from other nations. We used their
ships, we used their insurance companies, we used other facilities. Now we do
away with those services and use our own ships and are forming our own marine
and other insurance companies. The nations cannot pay us in services as once in
part they did. The nations have not the cash with which to pay or the credits to
give us in payment. There is not in the world sufficient free liquid cash to pay
these great obligations due us.
How, then, shall the problem of our prosperity be met? We are in the
position of a creditor, a kindly and I trust a generous creditor, who has due him
huge sums from friends, thank God ! friends who are abundantly able so far
as assets are concerned to liquidate their debt but who have not those assets ready
to be speedily turned into goods, services, cash or credits to pay the debt at once.
There is certainly no occasion for impatience, for neither you nor I as business
men would treat a debtor who was our friend hardly when he was in such a case.
There would be but one way for the business man to act toward such a debtor :
trTat is first to say, "Take such time as you require and as we can afford to give."
and second to extend to him, because he is a friend and because he is dependable.
TUESDAY MORNING SESSION 25
the hand of helpfulness to aid him to pay. That is the proposition which faces the
Simply because we are creditors on an enormous scale, we must help those
who owe to pay us what they owe. For it would be interesting to see what would
be said by an advocate of some other method, if there be one, whereby these vast
sums can be repaid to us with interest in reasonable time. If there be some other
way than these three that I have mentioned, I should be glad to" have it suggested.
There does dawn, however, out of this problem the very constructive or
development type of foreign trade to which a few moments ago I referred and so
far as my thinking goes, it offers the only solution to these great problems. It
also applies with peculiar force and opportunity to the nations that have great
undeveloped natural resources
We have accumulated a great wealth of free capital in the United States
What shall we do with it? It is my belief that our constructive service to the
world calls on us to let this capital of ours now flow out into the world that needs
it for the world's enrichment. You observe I do not say for our enrichment. There
will come inevitably to the United States rewards from such use of its wealth
abroad. There will come, I hope, to the lands in which that wealth is used far
greater rewards than we can receive thereby.
The principle and practice I am now advocating are not strange to you.
Your countries have gone to Great Britain, to Belgium, to France and in part to
Germany and Italy for funds with which to develop your own lands just exactly
as we ourselves did in the last century. The money that was thus invested in your
lands and in our land from abroad brought, of course, a reward to those that
loaned it as it should have done, but it brought a far* richer reward to your lands
and to ours. Our great industries and railways and utilities were in no small de-
gree due to it. By that building we have been gainers. In greater or less degree
the same is true of every land here represented.
Now, but with a new spirit of service, we must take up this duty ourselves.
We were not able to do it before the war. Others are not able to do it now- Your
peoples can no longer call upon Vienna and Berlin and Paris and London as they
did because things have changed. There are other problems yonder, problems of
great difficulty which they must needs face first, and while in some measure as we
all. know some of those nations may still be able and willing to continue this fruit-
ful investment of their funds abroad, the ability to do so has been very greatly
reduced. That ability has come to us with great increase and now we must adjust
our commercial vision to the opportunity which Providence has placed in our hands.
But with that adjustment of vision and on that ability must be superimposed
always the spirit of service. I hope to see the constructive and the development
commerce of the United States take the form whereby the securities of all the lands
here represented shall be readily sold in the markets of the Unitd States, not
merely national securities but municipal and industrial and railway and corporate
securities. I hope to see developed here, and soon the sooner the better an appre-
ciation of, interest in and a reaching out for the securities which the countries of
South America shall offer in our markets. From that process I hope for a two-
fold result which can only be helpful if we can keep out the spirit of grasp and
I look first, as an American, as an officer of the United States, for a three-
fold benefit to the United States from investment in the securities of all the lands
you represent. I look to the direct return from the investments, to the normal flow
of trade to us from operations thus carried on by the use of American capital in
your countries, and to the development of wealth by the use of this capital in your
lands which shall add to your buying power and so to your ability to become
larger customers of ours three real and definite contributions to our prosperity
from this process.
But, on the other hand, in any broad view of the matter the larger gain
should" be yours as the larger gain in the past has been ours. By the development
of the untouched lands, by the bringing into use of the unused resources, by the
discovery of riches that as yet I think you do not know and we certainly are not
aware of, by the expenditure of large sums in the employment of labor in your
countries, by the organization of the countries for a larger and more rapid eco-
nomic growth in all these ways the use of our capital abroad on fair and generous
terms should be mutually constructive and generally helpful. We should want you
to know and to understand and to desire that the United States profited as I have
26 SECOND PAN AMERICAN COMMERCIAL CONFERENCE
suggested. We should want to know on our part, and to desire that the larger
and the more permanent gain would be, yours. This, it seems to me, is the only
safe ground of international commerce. When it is done upon a constructive
basis, when it passes far beyond the mere competitive trading of the hour and
builds up both parties to the contract then and then only I am willing to work
for its extension at present and in the coming days.
The war brought conditions in South America into an unusual state and there
is now going on a very rapid process of change. It may interest you to have
stated here, though I assume that you are all more or less familiar with it, the fact
that the nations of South and Central America in their trade with the United
States during the calendar year 19t8 had a credit balance against the United States
of approximately four hundred million dollars. The largest sharers in this credit
balance were Argentina, where the credit balance was nearly a hundred and twenty-
two million dollars; Chile, where the credit balance was almost a hundred million
dollars; Mexico, where the credit balance was sixty-one million dollars, and Cuba,
where it was over fifty-one million dollars.
On the opposite side of the account the nations which showed a balance due
us were Panama, twelve million dollars; the Dominican Republic, nearly eight
millions; the British West Indies, six millions; British Guiana, five millions, and
others under five millions. The result was a favorable balance for South and
Central America against the United States of a little less than four hundred million
dollars. It is certain, of course, that in very large part that was brought about by
war conditions which will be familiar to you all and into which I need not now go.
We may, however, bring to your attention certain facts of the first four
months of 1919 which will indicate the state of change which is going on. For
example, during the calendar year 1918 we bought from Argentina twenty-two
million dollars' worth of hides. For the first four months of 1919 the amount is
less than four million. We took hides from Brazil in 1918 to the extent of nearly
three millions of dollars ; for the first four months of 1919 the amount is six
hundred and sixty-nine thousand dollars. We took linseed from Argentina in the
year 1918 to the amount of twenty-three millions of dollars. For the first four
months of the present year the amount is a little in excess of two and a quartei
millions of dollars. We took from Argentina wool in 1918 to the amount of almost
a hundred and nineteen millions in value and in the present year in the first four
months a little less than eight millions in value.
A somewhat similar comparison runs through other products. I mention it
only that there may be made clear to you a state of change, a condition in which we
may not, unless things alter, assume the continuance of this four hundred million
dollars of balance in your favor, and I wish to point out that there are certain
products of South and Central America that we greatly need and which we should
like to have offered, for we do not and cannot produce them ourselves. In this
way our neighbors may have the larger balances against which to buy the goods that
we hope we may be able to sell them to mutual advantage.
We should like to see a development in the business already reaching con-
siderable proportions of skins and pelts as those of nutria, rabbit, etc., the business
in vegetable oils, waxes and gums, tke business in timber and cabinet woods, some
of which are being (we are informed) exported from Brazil to Norway but are
practically unknown to most if not to all of our manufacturers. There are 1 ' ex-
tensive supplies of lignum vitae and boxwood available in tropical South America.
There are vegetable fibers that we need, some of which are not even known in
the regions where they grow. There are special tropical products such as mandioca
flower from Brazil used in the manufacture of starch and glue. There are medicinal
plants and vegetable dyes of many kinds and minor minerals not yet exploited, such
as thorium and zirconium and others.
I mention these things not in any sense as desiring to give you a perfect
picture but a suggestive one, showing the avenues to a peace trade of a constructive
character which should enable the countries to the south of us to grow as their
own resources and to buy from us as they will against the sales of those materials
to us, so that both of us may get what we need.
I am, of course, aware that the prices at which we are at present able to
offer many goods to South and Central America are lower than the prices that are
now being offered by such of our competitors in Europe as are able to offer them
at all. We are advised that our European competitors in their need for raw
materials are offering prices for them in South and Central America higher than
we are paying. That is natural under the circumstances. Their need is vital.
TUESDAY MORNING SESSION 27
As against that we have, of course, only the weapon of trade (if I may use
that phrase coming from an archaic time when one spoke of the "weapons" of
trade as having edges and points), we have as an offset our present ability to quote
lower prices than our European competitors are, at least for the time, able to offer.
We rejoice heartily in such transactions as that which but recently took place in this
country when the bonds of the city of Rio de Janeiro were taken so eagerly that
double the amount could have been readily placed. That I regard as an admirable
beginning. We rejoice to know that other South American countries are seeking
leans here for the development of railroads. We hope and believe, we certainly
desire, that the terms on which those loans are to be made shall be constructive
terms, constructive for the countries getting the loans, and that in them there
shall not be hidden away any jokers which shall give to any one arf undue power
over the industry, the commerce or the transportation of the country to which the
loans are made. We must deal as brethren, side by side, for only so is there any
permanence to our mutual prosperity.
I want to suggest to you a few practical considerations on the subject of
foods, and to lay before you a few facts respecting certain foods which we have
and desire to sell and which our friends in South and Central America would, if
they understood them, probably desire to buy. We do not now supply them to you
in large quantities as we do to others.
It has been my own belief that the peculiar attitude of the South and Central
American countries toward these particular foods has arisen from a basic mis-
understanding of their nature. There have been placed before me by the United
States Tariff Commission, because it is not a matter which is within their care,
the facts respecting certain grades of manufactured foods as we may call them,
including canned foods, dried fruits and vegetables. These I venture to suggest
for your consideration, not as a matter of complaint but because we think there is
an opportunity for service.
W r e furnish to Great Britain great quantities of certain grades of food run-
ning up into the millions, but these are not imported by South and Central America
because oi duties sometimes amounting to 200% which are prohibitive in their
effect, so that there is no revenue received from these goods by the nations of the
South nor is the food used. These are cheap foods, and, as I believe food is high
pretty much all over the world, this would seem to be an opportune time to call
attention to any possible relief from high prices.
Into Great Britain in 1913 we shipped canned fruits and vegetables to the
extent of $4,275,000 in value. We sent them to Argentina to the amount of $35,000.
We sent them to Brazil to the amount of $26,000. We respectfully suggest that
they would be found as palatable and healthful in one country as in another. The
reason lies in what is apparently a belief that these are articles of luxury. As a
matter of fact they are articles of the commonest consumption in the homes of
the poor, they are cheap foods, not dear ones.
We sent into Great Britain these same goods in 1915 to the amount of
$5,500,000, into Argentina to the amount of $16,000, to Brazil to the amount of
$10,000. Why should the one have these cheap and palatable foods and the other
not have therri? We do not wish in any way even to suggest intrusion into matters
of domestic concern. That is not our purpose. We merely wish that the subject
be considered, for the United States is the largest producer in the world of these
food products which are bought by many foreign nations.
We make them abundantly and of good quality and we sometimes wonder
why one nation accepts and another rejects that which is apparently for the benefit
of the average man and woman of any country.
I might pass to the larger field of canned products in general and point out
to you that the duties imposed in Latin America are frequently 200%, so that it
is impossible, except in the very small way mentioned, to furnish these goods at all.
As to the product which we make in greater quantity than any other country in the
world, canned and evaporated milk and cream, we find the same condition prevailing.
While we may send to Cuba 600,000 cases of canned milk in a single year, we are
prevented by the duties from sending like quantities to other countries to the south-
ward, which are thereby deprived of a food at once nourishing and healthful, which
keeps in any climate and which is used in other parts of the world for the daily
needs of the ordinary family.
The sole point I feel justified in urging in this miatter is that these are not
articles of luxury, but are articles of cheap and every day consumption.
:-. IM. * 84-5, 331,000.
, 99 6,707,000
COMMERCE VYJT TflE
IMPORTS * 3,031,304-, 721
EXPORTS * 6,14-9, 392,64-7
TOTAU $ 9, 180, "69 7, 368
AREA. 18,045 5Q.MI.
IM. 4 17,400, 000-
\ X COMMERCE WITH LATJN AMERICA x \ \> x
^IMPORTS 1 105^38,897. x \ \ \>
685,936', 2 3 9.
XTOTAL $ 1,T91,175,136.
TOTAL * 39,84-5, 000.
Vx ^\\ EXPOR - T s
AREA 10.&03 SQ.M I
EX. * 13,000,000.
TOTAL* 23, 000. 000.
ffREA. 44,217. 6QMI
AREA 47 99 7 SQ.MI
EX. * 5. 9 75, 000-
EX.-* 16, 050, 000.
TOTAL* 22,919 000,
AREA 4 5, 56 3. SQ.M1.
TOTA1/* 12, 365,000
TOTAL *16. 802.000.
POP. '59 2. 675
IM.* 6, 293, 000.
EX.4- 8, 030, 000.
TOTAL * 14-, 33 000.
EX.* 5, 624- 000
TV^nnAT 5t >i o A T r\r\i
TOTAL'14-, 84-7 000
TOTAL* 16, 977000.
PAN AM#/CAV UNtOM
Commerce f/gures fo
Lati'rr Jtmcxfca cov
United States /9/3
JBuenaverttuT^^Qip. 5A 7 2..
^REA 394,001 e-Q/UT^
POP. ^,830 > 77l % %v
E X N E z u E L A^[^>
^6Z TO. r^^lBRIT(s/DUTCH-fRE^
HAoxWo$3.00Q.\ %:G ^1 AglA/H
)o.;>:^^v x \ \t^(Axr6 v h
^ft \^\ x x xx ^ x xx ^/
^^X X\ ^ X ^ \N v\\\\ \X\ V^V\ N \X^^V
^^^gi** ' 531 '
/ XAREA533,9i6SO/M x
/ \3MPORT5 CxCj
V Lunc&ir EXPORT?
\w X* 90,607. 0(
# 7\ X \ X x \AKEA. 3,295,316 6Q."MTI/E6 v \ \\\ xAxVs^.
^ X s X \ x x \ xN 1 \ \ \ N \ X ^ \ v" ^ \ \\ \ X \ X X \ PerntmbuaA
\\\^ x ^\^ o K\ \ vsx o ^ \o x " ^
fili^Xx^B^ A\Z J. HVV ^T^
^flSrlBS^X^ x x IMPORTS *m,4.6i;obo. \ r^^^
'P, < SiSoP I tto,53& \\ X X EXPORT3 * E90, 932,000. J
lAKEA. 116,00.0 SOU k ]56 ^t r
POP. 1, 500,000 ^p'7?V
1M. ftlO, 177, 000. ^^ ;
EX.* 16,309,000. ^^
otr !" v 1 TSl^ ? ^??5v^W
l^UlM. $13,058, OOO.W S \ \ > \ \ \ v X N \ \ X Y
|^EX.| 61,52^000. V\\ X \ ^ X \ \ x X \ \ \ y/
x \x ^y^^oJaTie^
AREA 2,91, 03 Z SQM
POP. 5,000,000. ^
EXCESS, 995, 000.
TO.* 3 8)9,588.000.
^^^$^^^^^^^ KA 171,614 .
ffini^^^t^ >yNj^ 4 946 00
MPOP.SXIE.OSO ^^Ox^X ]Exl6% 9 otcOO
^v^^^^ |To..n\7li t o o J
^ARGENT INA*^^ (AHEA 73,i7 S )
^^ JUflvbt^W^^^V. POP. 1,378, 808
^3M. l78,3^00C^<a*fe*wS JM- * 38,701,000.
^fEX.533,665,OOO xX 3 EX* 96, 17. 000.
MvTOTAL s\fc\\\\>^ T0.*134-.918,000.
PAN AMER/CAH UMfOM
BOUMDAR/ES or COC/A/TT?/ES
30 SECOND PAN AMERICAN COMMERCIAL CONFERENCE
If, now, I may speak of an article which is rapidly developing in this country
and has been found of great value in humble homes, dried or dehydrated foods, I
find that our dried fruits were supplied to Great Britain in the year before the war
to the value of over $2,225,000; to Argentina, $47,000; to Brazil, $55,000. The
reason for the difference is the same, these useful and inexpensive food products are
shut out by duties which seem to us to be based upon the misconception that they
are articles of luxury.
I should not have ventured to intrude into the field that I have thus briefly
touched if it were not for the fact that the world at large presents this curious
picture : Europe, hungry and in places starving, is calling upon us and upon some
of you for all the products we can send, so that we have had to postpone some of
our commercial trade for the sake of great shipments of food, while side by side
with that exists this curious situation in which large quantities of cheap, nutritious
and palatable foods are in effect barred from entry into countries which we feel
reasonably sure would benefit by their use as others have done.
Finally, gentlemen, I must end as I began. The spirit of conquest by trade
has received a mortal blow. It can no longer prevail in the world. I do not argue
that all the merchants and manufacturers of the United States are unselfish men,
for that statement would be too sweeping. I do not suppose that you would argue
that all your importers are men whose sole conception is that of the national pros-
perity and good. Probably you have your share of selfish men as we have. None
the less, the world's conscience has taken a great step forward r in these last five
years and the gospel of gouge and greed is discredited in the business world here
as with you. And when we come into your markets we come with the spirit of
friends. I hope we shall bring the means to serve you in such a way that while
we gain thereby you shall be the larger gainer.
DIRECTOR GENERAL BARRETT: We are now going to take up Brazil,
and I will ask the Brazilian delegation to come on the platform.
I have pleasure in introducing to you, to lead the discussion on Brazil, Senhor
Langgaard de Menezes, the Commercial Attache of the Brazilian Embassy.
SENHOR LANGGAARD DE MENEZES read the paper which appears on
DIRECTOR GENERAL BARRETT: I now have the pleasure of calling upon
Senhor Sebastiao Sampaio, the enterprising I might say Yankee Brazilian Consul
at St. Louis.
SENHOR SEBASTIAO SAMPAIO read the paper which appears on page 121.
DIRECTOR GENERAL BARRETT: Now I call for some practical questions
regarding exchange of trade between Brazil and the other American countries.
MR. LANGWORTHY MARCH ANT, of the Pan American Union: Mr.
Sampaio mentioned two or three points that I thought very important. One was
with regard to the beef exportation ; the other with reference to manganese. We
think we know a good deal about the manganese situation in Brazil in our
statistics and I had brought a good deal of knowledge about it when I came, but
he spoke of it as though he possessed a certain amount of fresh knowledge on
the subject and I think the house would be pleased to hear him say something about
the manganese situation after the war.
DIRECTOR GENERAL BARRETT: The question is: Because manganese
enters so importantly into the manufacture of iron and steel, will Mr. Sampaio
tell us what the prospects are for that business after the war.
SENHOR SAMPAIO: I do not know much about manganese, but I will tell
you what I can. Before the war our exportation of manganese was very small;
it was not counted as an export item. But during 1916 and 1917, as I have just
told you, all our manganese was exported to the United States, where it was used
in manufacturing steel for the war. In 1916 we exported to the United States one
million and a half sterling pounds, while in 1917 we exported three million pounds
sterling. Before the war the United States imported .manganese from many lands,
but during the war the quality of manganese was considered and then all manganese
imported by the United States was from Brazil.
MR. HENRY E. CORONADO (Akron, O.) : The point has been brought out
here that one of the principal industries in Brazil is the coffee industry. The
TUESDAY MORNING SESSION 31
United States has today developed another industry, the rubber industry, to such
great proportions that we have what is called the center of the world today in the
city of Akron, Ohio. Mr. Sampaio only gave us a few statistics about that and I
would like for him to be so kind as to give us some more information about the won-
derful industry of crude rubber in Brazil because there are not only myself, as a dele-
gate from one of the largest rubber companies in the United States, but many
other gentlemen here present at this Conference who would like to hear something
It is true that coffee took a great part in helping win the war and the armies
in Europe, but I may say that rubber took the same part also because all the auto-
mobiles of the army, all the trucks carrying the ammunition and everything like
that were equipped with rubber for the tires and different things. The motorcycles
of the army, which carried messages all over the front, had to have rubber for
tires, etc. For that reason, may I ask one of the Brazilians to give us a little talk