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advertising propaganda, in the language of the country, is found in most remote sections, illustrated in a way particularly pleasing to the people. German salesmen say that our advertising is far superior to theirs in South America. Our diplomatic and consular force in South America is, on the whole, without much doubt the best and is so regarded by many of the foreign colonies there. Cuba and Mexico have served as training schools for our salesmen both in the language and customs of the country. South American duties have been distinctly favorable to our products, since on machinery of all sorts, agricultural, mining, railroad, and auxiliary supplies, the tariff has either been free, or nominal. In such commodities as these lies one of our chief advantages in trade.
To increase our trade with South America it has been urged that there be established an American line of freight steamers. It has been said that thus only could proper service be supplied, and that the flag in itself would increase our commercial prestige. This is not the place for a lengthy argument upon shipping; all that can be said is that constant shippers to South America do not complain of inadequate service or of unreasonable rates. Again, the sentiment of the flag does not seem to enter into trade vitally since France, which is perhaps the country most highly regarded in sentiment by the South Americans, is distinctly fourth in trade and scarcely holding its own, although it has a subsidized French shipping line. Ocean freight service is one of the most flexible services in the world. Tramp steamers come from the other side of the world if there be sufficient demand for them. Under present conditions, both economic and legal, there is but little doubt that the United States cannot construct or operate shipping lines so cheaply as Great Britain or Germany. If they perform transportation service adequately for us, and more cheaply, it would seem that we may well continue that arrangement. It is beginning to look, however, as if very shortly we should be able to compete with them in both the construction and navigation of ocean-going boats, without the aid of any subvention.
As to the establishment of an American bank, it does look as if our trade had reached the point where an institution, owned and directed by Americans, to furnish exchange and credit information and to give other financial assistance to Americans, is warranted. Great Britain and Germany each have several banks in South America, and France, Italy, and Spain have each a bank there. So far as can be learned all these banks have paid well. It also appears as if the argument for greater prestige applied more forcibly to the establishment of a bank than to the subsidizing of a shipping line. Those trading with South America, however, say that the foreign banks, through their New York agencies, give adequate and reasonable banking service. One of our greatest banks has been looking into the subject carefully but what action it is to take toward establishing an American bank in South America is not yet publicly known.
It has seemed to me as if a much more influential step toward building up our trade in South America would be the establishment of an American department store in the city of Buenos Aires, at least, and probably better in the cities also of Rio Janeiro, Santiago, and Lima. In my own experience with retail stores in South America I was impressed by the lack of display given to American goods, even in articles in which our ascendency was acknowledged, such as firearms and some kinds of hardware. This, I am inclined to think, is chiefly due to the stores being affiliated with other nationalities. The leading department store in South America is in Buenos Aires, and is owned and operated by French capital. The people of Buenos Aires are highly delighted with it, and it is an excellent store, but it does not compare with department stores in the United States of the same grade. It seems to me that an association of American exporters, actual and prospective, might well consider organizing a department store company for the purpose of displaying American goods in South America, and eventually for profit. Such a department store would display the goods in which we have an advantage and import other goods just the same as our department stores in this country import goods from Europe and elsewhere for their trade.
Now, finally, if I may be permitted, I should like to draw some conclusions as to the economic and consequent trade possibilities of South America. The rôle of prophet has never been a safe one, nevertheless I am going to venture a few statements about the continent with the main basis of fact for my deductions.
As has been stated before, South America divides naturally into the geographic groups of the north coast, the Guianas, Venezuela, and Colombia; the west coast, Ecuador, Peru, Bolivia, and Chile; and the east coast, which subdivides into the River Plate (comprehending Uruguay, Paraguay, Argentina), and Brazil.
Taking first the north coast-in Colombia we have perhaps the most difficult transportation problem in any portion of South America because not only do we have the greatest number of parallel ranges of mountains therein, already refered to, but also the main arteries of water transportation, namely the Magdalena and the Cauca, are both obstructed, the Magdelena by a bar at its mouth, and the Cauca by unnavigable falls near its point of discharge into the Magdalena. This necessitates at least two rail transshipments of goods in the progress of their transportation up the Magdalena River to the most important cities of Colombia-Bogota and Medellin.
On the west coast, in Peru, we have a country which, although its total area is over 600,000 square miles, one-fifth of that of the Unlted States, yet it is not a country so economically attractive as these figures would indicate. There again the parallel ranges of the Andes have shut off the interior from the coast and affected the climate radically. The coastal strip of Peru averages from 25 to 30 miles only in width, and is absolutely arid and barren, irrigation being required for any vegetable production. An American company, already with large investments in Peru, has studied the irrigation possibilities of this strip. It estimates that with 1,500,000 acres already under irrigation it is possible to increase that amount of irrigable area 1,000,000 acres, or to a total of 2,500,000 acres.
The intermountain region of Peru is between these two ranges of the Andes. Much of it is so high as to limit its agricultural productivity. Furthermore, its valleys are long and narrow, one of which, for example, is 300 miles long, by about one mile in width, presenting a most difficult transportation problem. From present knowledge it cannot be seen how this intermountain region can ever support more than local needs. Finally, there is a third and much greater portion of Peru, to the west of the Andes, the Montaña. Little is known about it except that it is a tropical forest with decidedly excessive rainfall, giving high humidity. By far its chief commercial product today is rubber. The position of wild rubber in the world's market is being more and more seriously threatened by the plantation rubber from the East-Ceylon and the Malayan Straits. Present figures seem to indicate clearly that the ordinary grades of rubber can be put on the market by the plantation growers of the East more cheaply than the wild rubber can be secured in Peru and Brazil.
Peru, at present, has a population of 4,000,000 (no one knows exactly, but this is probably the best estimate). Its present irrigated area is 1,500,000 acres, which can possibly be increased two-thirds. Peru has mineral possibilities (it already has one of the greatest copper mines of the world), but mineral production alone has never been the basis of great population. Take, for example, our western states. It was not until they became agricultural, through the employment of irrigation, that the population increased.
Peru has a favorable position, geographically, for trade with the other countries of the west coast, and its commerce with Chile and Ecuador is steadily increasing. This geographic advantage might aid its industrial development, but from the character of the population I should much sooner expect this development in Chile than in Peru. Furthermore, when one remembers how the products of our own country and Europe are being carried around the world, and over tariff barriers, one need not expect a decided industrial development, to the extent of competing in foreign trade, in either of these countries in the immediate future.
Without attaching any special significance to the figure itself, but merely to give you some approximate idea, I think now that I am an optimistic prophet for Peru to hazard the estimate of its present population of 4,000,000 sometime increasing to 10,000,000.
In Chile, which has almost twice the trade of all the other countries of the west coast put together, we have a country of some 3000 miles in length, averaging only 90 miles in width, and half of which width, nearly, is occupied by mountains. The upper third of Chile is as barren and arid as the west coast of Peru. The real heart of Chile is in the central valley, south of Santiago, which has a total area of only about 18,000 square miles. In this upper third of Chile, as barren as it is, has lain the greatest source of its revenue and prosperity-namely, the deposits of nitrate, which have been the basis of the saltpeter supply for the use of that article in a score of manufactured products the world over. This nitrate is now in danger of competition from artificial nitrate to a commercial degree. It is already being produced in experimental quantities.
Chile has today barely 3,000,000 population. Its total population has increased but little, although its cities have increased somewhat. The copper possibilities of Chile have been increased by the construction of the Longitudinal Rail Road to the north, lessening the cost of transportation. The 18,000 square miles of cultivated land, the nitrate beds -threatened with possible competition-the copper mines, a greater initiative on the part of the population than that of the other countries of the west coast neutralized somewhat by greater geographic remoteness, constitute the fundamental basis of Chile's future, as at present seen. If Chile's 3,000,000 of population increase to 6,000,000 Chile is to be congratulated.
Bolivia, the greatest mineral country in South America, has a transportation problem on every side. The haul from the Pacific coast, though short, is over passes of 12,000 feet altitude. A third of the area of Bolivia is from 10,000 to 12,000 feet altitude. In the east, it has much the same tropical problem as Peru, and a long haul, although much