Evening Star Newspaper, August 21, 1921, Page 27

EDITORIAL PAGE NATIONAL PROBLEMS SPECIAL ARTICLES' i i ' _Part 2—12 Pages e BIGGEST OF GAMBLES ENDED BY NEW LAW Grain Exchanges Must Give Up Busincs.s Runmng Into Many Bllhons of Dollars a Year. BY &. GOULD LINCOLN. HE Capper-Tincher anti-grain gambling bill is about to be- come & law. When it is put{, into operation, its proponents say, the greatest gambling institu- tion in the world—an institution that | makes the old Louisiana lottery and Monte Carlo appear almost infinitesi- mal—will pass into history. Just @ word about this gambling institution, which has its centers in | thirteen of the big citles of the coun- try where grain is actually sold and delivered in large quantities, and which has thousands of feeders— bucket shops and the like—located in all parts of the country. The thou- sands who play this gambling game wager that the, price of grain Is going up or going down, just as the patrons of a poolroom wager that this horse or that wil! win a race. They make: the bets, and the manip- ylators of the market are also the bookmakers, ‘and rake in the money 1Seéretary or his agents may have ac- cess at all timés, so they may check up on the exchanges. i It provides that the Secretary of Agriculture may designate such boards of trade as “contract mar- kets,” where grain futures may be dealt in, only when thése boards of téade comply with conditions and Te- quirements set down in the act itself. It uses tke taxing power, of the gov- ernment to put the gambling in grain out of business. In making use of the taxing power to control the situation, the bill pro- ‘vides there shall be levied a tax of 20 cents per bushel on each bushel in- volved in every privilege or option for a contract either of purchase or {8ale of grain, intending thereby only to tax the transactions known to the trade as “privileges,” “bids,” “‘offers,” “puts and calls,” “indemnities” or “upa and downs. i Tax on Unowned Grain. Furthermore, the bill imposes a tax of the “Suckers” who wager their |of 20 cents per bustel on every bushel ‘money. of grain involved in a contract for Sales Rum Into Billions. future delivery, except where the sell- . Take the Chicago Board of Trade. the greatest wheat gambling center of them all. On an average, Chicago ‘actually receives 325,000,000 bushels of grain in a year. But in a year there are s0ld on the Chicago Board of Trade 18,000,000,000 bushles of grain_for “future delivery.” ~To put it “another way, the dealers on the Chicago Board of Trade sell for fu- “ture delivery miore than . fifty-one times as much grain as is delivered to the Chieago market in a year. In a period of twelve months, 'these dealers agree to deliver, on future contracts, more grain than there is wheat, corn, oats, rye and barley grown in the whole world in that = Detiods OF courseliihey BEvarnol e city of the country by making it im- tention of making delivery, and coula | PoSSiPle for gamblers and specula not make the deliverfes if they dial'°TS to do business: on boards of intend to do so. tr;fle{ i More than 99 per cent of all the efore board of trade can be des- sales_ for fulure delivery made on |'SNated a “contradt market” by the The Chicago Board of Trade are mot |SSCTEtary of Agriculture, the board followed by an actual delivery of |USt comply ith the condltions set the grain. It Is sald thay omly .28|d0WR In the bill These conditions of 1 per cent of these trades actually | Include the’location’ of .the board at result In a delivery of the grain, ~ |® terminal market where grain is dealt with in -large’quantities; the Money Made om “Suckers.”. ... !keeping of records of pll transactions What happens on the Chicago on the board for the inspection of the Board. of Trade is,typigal of What |gecretary and his agent or any agent happens in the other cemters. It 3 3 of ; ghe” Depstment of Justice, an evidence of the vast gambling 4? games that are coiducted in the prevyliol by, he hahed. of 44 simination of false or Inaccurate re- grain that must be produced If the |, iy concerning crop or market con- people’ are to live, and’ which must e Durchased eventually By the peo. | ditions. the prevention by the govern- ing board of the manipulation of ple that must eat them. The dealers, it is sald, do not make | Prices or the cornering of any grain their money oni the wheat which they [ DY the dealers or operators.on tHe actuslly buy from the farmérs and |Pord and the admission to membsr- sell to the millers. They make money 5hiP in the board of any lawfully oft the men ‘who play the market, |formed co-operative assoclstion: of hoping to make money themselves. |Producers. “The result is that the grain market| Any board desiring to be designated fluctuates, mot in accordance with & “contract market” must show ' to the supply and demand, but with |the Secretary of ~Agriculturs that Ahe manipulations” of the traders, |these conditions have been compled who are skillful in their ability to | With. force prices up or down—principally Severe Penalties Provided. down, however, in recent months and | A commission composed’ of - the years.. Occasionally in the pastigecretary of Asriculture., the Secre- traders have attempted to corner the |,y of Commerce and the. Attorney wheat market, or the market Injgenerg] is authorized to suspend for some other grain. But this wWasp, ,.;ioq pot exceeding six months, or hardly “clubby.” Where one trader ., .yope the designation of any board made money others lost in 8UCh|,¢ 4 a9, when any of the conditions transactions. The outcry against such | oo joq are violated. Provision is corners from the public met an an |4, for hearings and for appeals to swering response In the hearts of|., rgery) courts. Any person who the malority of the traders, and the iy ;) ¢, yeep the records of the trans- boarda of trade themselves laid down | \1° 10 eeP e PE00TIH 0 The TR reguiations more & Tess effective| o posed law, will be liable to a fin against such transactions. of not more than $10,000 or imprison- Growers Helpless Victims. ment for not more than a year, or But bearing the market down has|both, and aleo shall be compelled to not had” the same public condemna- |pay the tax of 20 centg a bushel and tion<‘except from the producers of |an additional tax of 10 cents a bushel. {ifo wheat and other grain. The| The father of this legislation is great majority of the gamblers Who |S¢natgr Arthur Capper of Kansas, who play the market bet that the priceslintroduced the original anti-grain dre going up—this is true, it is said, { gambling bill. Senater. Capper has {i industrials as well as in grain.lgiven the measure his unflagging in- So the outside gamblers, the men Who | terest and attention. . The support are {he réal suckers, lay themselves | ¢or the bill grew rapidly and the open to the ralds of the bears—and |y . mers have gotten behind it prac- the ralds have come frequéntly. Thelyica)ly to a man. They.see in it an farmer who produces the wheat 18 (.0, tunity t5 escape. fram competi- a Belpless victim of these bear ralds, |45 with the grain gamblers, with tac. whom, as t he: he Chicago Board of Trade, when [ x> | ch‘;::"" of {axtitheyihays s dells .18,000,000,000 bushels of grain In & year, for future delivery, ;s & business that runs into $15,- Py QQ:' :7"320.000.000 000 -a year. W‘n Welcome Dulrmnment Conference to Washington er is at the time of making the con- tract the owner of the actual graln, or is the grower, and except where such contracts are made by or through a member of a board of trade which has been designated as a “contract market” by the Secretary, of Agricul- I'ture, and a record of the transaction 18 kept for tke Inspection of the Sec- retary. This tax of 20 cents a bushel on these transactions—the kind of gamb- ling transactions that the bill aims I"'_"' in effect, prohibitive. But the bill does not prevent the legitimate “hedge.” It will, however, put out of business thousands of wire houses and bucket shops operating in every aog;6ed; 'r?d haximum business of the Loul 1 #fery, when it was in its prime was ‘10000.000 a year, and Monte Cnlo has annual receipts of only $10,000,000 or $12,000,000, of which about half are net receipts. Whén wheat and corn came on '.hl market last year, a bear raid began which lasted ten months and forced the yfleo of wheat from $2.75 a hlllh!l down to 85 cents. Yet all the timé {here was a-greater demand for American wheat than ever before. The law of supply ‘and demand sim- ply wad not allowed to operate by the gamblers. Afms to Ead Evils. Besides making it possible for the faw of supply and demand to oper- ate, and to stablize the market for grain, the bill now about to become a law proposes to put an end to the following evils of the present sy tem: Market manipulation by big _ traders; dissemination of false crop information; gambling in indemnities or “puts”-and “calls,” and promiscu- ous -speculation in food stuffs. . The bill sets about doing - these thifigs in the following Ways: It provides for government regula- E3 tion of the grain exchanges, with the HENRY Secretary of Agriculture as the regu- | Undersecretary lator. It provides that books must be kept *showing “aécurately -all..the transao- iions on the exchaunges, tq;yfleh ‘the. ; E WASHINGTON, D. C, SUNDAY MORNING, AUGUST 21, 1921 EUROPE’S DEBT IS HARD PROBLEMHOW U. S. EXPORTERS CAN INCREASE TRADE lfflcult to See HOW Even Interest Payments Can Be Recelved Intelligent Attentlon to Wishes of South Without Involving Serious Disaster to Many Lines of Amerlcan Industry—Views of Economists BY SHELDON S. CLINE. O subject is receiving more serious con- sideration by leaders of the adminis- tration and in Congress than that of the huge debt owed by Europe to_this country. And’the phase that troubles and per- plexes them is not how and when Europe can pay, but in what form ‘this country could af- ford to receive payment. A review of the problem which is presented is sufficient to show how difficult it is going to be of solution. * Kk Xk Govcrnmenl loans owed by Europe to the United States, principal and interest, now ag- gregate mnearly $11,000,000,000. They will amount to almost $12,000,000,000 by the time set for the beginning of interest payments. Commercial credits extended by this coun- try to Europe since the armistice, and yet to be liquidated, are estimated at from 82,000 000,000 to $3,000,00,000. Constituting a total indebtedness owed by Europe to America'of approximately $14,000,- 000,000. The annual interest charges on this indebt- edness at 5 per cent would be $700,000,000. Amortization of the principal over a period of fifty years would require an additional pay- ‘ment of $280,000,000. Calling for .a total annual Dlymlllt from Europe to America, in the beginning, of almost $1,000,000,000—gradually reducing as the prin- cipal was paid off. * * %k X Xk Payment of- this enormous annual sum in gold is out of the question. Europe could not find the gold to meet the obligation for a single year, and any attempt to do so would deprive her paper gurrencies of what little value they now have and bring utter chaos to exchange. Europe has largely sold back the $5,000,000,~ 000 of -American securities formerly owned there, and thus is deprived of the interest and dividends on these, which before the war helped settle the trade balance !lvnnble to America. If America is to have a merchant mnlne. Europe will be unable to make ocean freights help to any cnn-ldeuhu extent in pnylng the debt. A former means of uymem which will re- main to Europe is the expenditures of Ameri- cay. tourists and remittances from. America by Immlmnu. amounting, before the war, to' be- tweén $200,000,000 and SSO',ODO 000 a yelr. (Elumtu t uu W@ u -abnhormal, Au mmx to’the nn profits af the * -years and to fact that for nvenl Years Euro p‘fl travel was debarred. With the réturn to normal times, expenditutes of four- ists are not likely to be much above the pre-war average.) -This would leave between $700,000,000 and $900,000,000 a year which Europe must find means of paying—and America a wiy to ac- cept. * k% %k Shall it be in goods? 3 Before the war wé exported about $W0.000.- 000 a year more gnods than we imported. Eu- rope paid.this “balance of trade” favorable to the United States through offsets of which she is now largely deprived—returns on American investments, -ocean freights, marine insurance, etc—having left only the expenditure of tour- ists and remittances by immigrants. If payment is to be made in goods,,a pre- ‘war trade balance favorable to the 'United States of $500,000,000 must’ be .converted into a post-war trade balance against the United States of at least $700,000,000—an adverse dif- ference of $1,200,000,000 in the foreign trade of this country. If, we are to concern ourselves only with interest payments, posptoning payments on the principal sum to some time in the distant fu- ture, the adverse difference in trade balances still would be only a little short of s billion dollars a year. Such a trade reversal would mean industrial ruin, bankruptcy and unemployment so wide- spread as to destroy the purchasing power of the American people, and ‘in’ consequence it would be impossible to market here any such tremendous volume of Buropean imports. * k- koo ‘The 'problem as outlined above was submit- ted by The Star to a ‘list of more than sixty leading economic, financial and business authori- ties, and they were asked to lay aside the ques- tion 6f Europe’s ability or inability to pay and Ao answer simply the question: -“In what form can the United States afford to receive pay- ment of Europe’s debt to this country?” Although responses were received.from a large majority of those to whom the query was addressed, only a few had constructive sugge tions to offer. ‘Men who stand high in the world of international finance made no bones of an- swering that they didn't know; that the problem presented so many difficulties. that only time could +point- the way. to a solution. It is' notable, perhaps, in view of a hope which yet lingers in Europe, that in, none of, the. replies was there any suggestion that the United Sta ‘should cancel ll'ly part of this indebtedness or forfeit interest thereon. -Ex- pression was general that this country ‘should be considerate—even generous—in the matter of deferring payments, but it was accepted as a matter of course that at some time in some way the debt will be lignldated, or that it:will' re- main’ as a’pérmanent lnterut-drnlng Inmt- ment nbmid. * Xk Xk X 7 The noslm! of ‘permanent” investments in Europe apparently makes a. strong appeal ‘to American financiers, hut a difficulty which pre- sents itself is that most of our principal Eu- ropean -debtors, under normal conditions, are themselves . investing nations which .before.the war sent their surplus capital to. help build up the undeveloped parts of the world. - Russia, of ‘course, would gresent an'extensive fleld for ‘the Inyestment 'of American capital and the reinvestment : of earnings, but under present conditions Russia cannot be.tgken Anto acdount N mmmnv.mmmmn! industrial - securities. - That-a contindation of Dossible” umhmrotmyc. _president of;the Invegtment . except by selling its securities to us. way,” he writes, “that any one can see for Eu- rope to cancel its indebtedness to this country Any at- tempt to have Europe pay us by means of goods is probably impossible for the present, and if it could be dofie, would very likely spell disas- " ter for many of our industries.” * %k k X Dr. Jeremiah W. Jenks, research professor of government and publlc administration at the University of New York and recognized as one of the country’s foremost economists, has worked out the idea of investments abroad be- yond the mere purchase by American investors of European securities. He writes as follows: “The difficulties of the situation which you outline are, of course, patent to every business man. It has .seemed to me for a long time that the greatest single service that could be rendered by American business interests toward relieving the difficulty would be for Americans to invest their capital in large sums directly in the foreign countries, buying entire plants, or at any rate the control of those plants, and operating them. The profits of those plants would then be invested presumably in the coun- tries themselves for a time. Our exports that would help build up those industries would not require for the time being the shipping of for- efgn-made goods back to this country to pay for them. This procedure would help solve the ‘balance-of-trade’ question better, perhaps, than any other method that can be devised. Of course, the prosperity of those countries them- selves would be increased thereby. Wages would be raised, demand for the products of other contributing industries there would be stimulated, and the countries would be brought back tq normal more readily than by any other single process. Especially would this be true in the case df countries that are mot well de- veloped industrially, and that would gain®par- ticularly by the adoption of the American in- dustrial methods and skilled mangement. It will be expected, of course, that in due time the citizens of those countries thus aided would be able to buy back these industries when the proper opportunity came. “It will be noted that this is exactly the process by which many of our railroads and a very considerable portion of our industries in the middle west were déveloped. Some of our railroads were even controlled by European capital, and many of our industries were owned and developed by foreigners. This is entirely aside, of course, from the large amounts of foreign capital igvested in the bonds ‘'of our railroads and indWstries which did not give the holdeFs an getive control " As our middle west developed, we were able gradually to buy this stock back, and, of coufse, after the outbreak of the war we acquired a very large percentage, indeed, of the rest of these securities. I men- tion this analogy because some people think that there will be a strong hostile sentiment aroused abroad if Americans invest their capi- tal there ih such a way as to control many of the industries. That would all depend upon the way in which this were done. “Of course, I do not make these suggestions as a complete solution of the difficulty, but such a process would be helpful to a certain degree along the lines of your question. The specific answer to your question, then, would be th The United States might well afford to re- ceive payment of a considerable percentage of Europe’'s debt to this country by its business men taking over the ownership of certain Eu- ropean industries and furnishing the capital to build them up and run them.” * %k % X Another advocate of investments in Europe as a solution of the problem is Theodore H. Price, editor of Commerce and Finance. He says: “You ask in what form can the United States afford to recelve payment of Europe's debt to this country? “I answer that it is neither essential nor desirable that Europe's debt to this country should be paid. Prior to the war the United States was continuously in debt to Europe, and our bonds and stocks were preferred invest- ments there. As long as we gave good security and paid the interest regularly the Europeans ‘were content to lend us and renew the loans. “Naw that conditions are reversed we should be willing to lend to Europe provided she can give good security and pay & fair rate for the . money borrowed. “The theory that we must collect whlt is owing us by solvent debtors is archaic and re- flects the .outworn bphilosophy of those who think of America as detached from the rest: of the)world. To collect the debts due us in.either gold or goods would ruin us. We cen only hope to ‘prosper as we use our surplus wealth to_promote the prosperity of our customers. Thll \Is the way in which England has grown 80 ‘great commercially and financially. = We should ‘study and apply her economic philos- ophy. - ““The bank that insists upon collecting every debt due it would soon cease to exist. The same statement applies to a nation, TIts truth 18 80 obvious'that it needs no' exposition.” * %k k K A somewhat elaborate program for solution of «the -problem is submitted by W. H. Stack- house of Springfield, Ohio, president of the National Implement and - Vehicle Association, which is an organization of the manufacturers of farm operating equipment. Mr. Stackhouse, for the purpose of treat- ‘ment, separates governmental indebtedness from commercial_credits. He would have the Eu- ropean. governments issue bonds to the amount of their_debts to this. country, the bonds to mature serially, during a period beginning fifty years from date of issue and ending one hundred years thereafter, and bearing an interest rate not in excess of 3 per cent. He makes no at- témpt to discover a market for such bonds, but specifically states that this government should not. guarantee them. = . <He would have.lquidation of commercial’ credits in goods,-and would draft the pending tariff bill to make this/practicable with, it is to be assumed, the least possible disturbance to - - Aficflun industry. * % X % ! Patience and liberality, inspired by enlight-* ened “self-interest, constitute the formula ad- vanced by John E. Edgerton of Nashville, presi- : and TFinancial Experts. -but a fair return of interest, accompanied over a long. term of years of progressive reductions of principal, as opportunity is favorable. “We have the same interest in the restora- tion of 'Europe’s producing power that a coun- try banker has in the prosperity of the farm- ing interest in his community. The problem is new only in its proportions—not in its na- ture. 1 assume, therefore, that the debt must be funded over a long .period, and the interest paid through wealth production of the debtor nations rationally stimulated by American in- vestment and credit. The debt will be paid not in any one way, but through all the recognized means by which nations, like individuals, satis- fy the clalms of a- creditor who possesses a good investment. “It will require to an extraordinary degree an enduring patience, that can at times extend even the period of interest payments. This is often the practice of a private creditor in the protection of his loan. Through motives of enlightened selfishness, America can well afford to adopt such leplent measures as will encour- age and stimulate our debtor nations. The first thing is to get Europe back to work, and that is absolutely indispensable. To this end, we must, within reasonable limits, ald with raw materials, machinery and foodstuffs. But we must not sacrifice our home market, for our own economic security must be preserved if we are to be of assistance to others. . “We face long, hard task. Constructive ef- fort'is difficult. Wreckage is easy. Our way is not clear, for many contingencies will arise to further complicate an intricate situation. The fundamentals, however, are those which, under like circumstances, would govern similar rela- tions between individual men in every-day af- fairs. We must adapt- ourselves to circum- stances as they develop with a clear under- standing that we did not become creditors in an ordinary commercial transaction. But these vast debts were incurred in assuring the politi- cal and economic salvation of the world. * %k X % Payment of interest partly in gold and part- 1y in goods, with the lapse of many years before there are payments on _account of principal, is the only way out which is seen by T. R. Wil- liams of Pittsburgh, president of thé American Newspaper Publishers’ - Assoclation. ' He thinks it is up to the tariff makers in Congress to devise ways in which g0ods payments may be received without ruin to W}g@flflfi But members of Con; are us ‘anxtously seeking light. as age the financiers and econo- mists. “I wish I §aw tha best way to receive sch” ts, but I dou't” ‘writes Senator Jones .ot Washitigton, chairman of the Senate committee on commerce. “As you say, it {s one of the most vita] problems- that confront ‘us today, and I shall be yvery interested in the views as expressed by economic, financial and commercial authorities to whom you are sub- mitting the question.” 2 Representativé ‘Winslow of Mas#achusétts, chairman of the House committes-on.interstate and foreign commerce, is-equally. frank in ad- mitting that he does not now see the way to a solution. . “Becauss 1 don’t know .. enough about it to treat the subject specifically and thor- oughly,” he writes, “tlie"most I can say can be summed up in a very.few words, as :followi: In recognition of the confusion existing in the world, I believe the United States should be farsighted and elastic in its treatment of the debts of foreign countries to our government ‘We ‘should not only "be- just to"ourselves, but generous to our debtors. .I can see no reason at the present. time for ‘canceling any of the existing obligations.”. . * ok k% Willlam C. Redfield, who was Secrehry of Commerce in the Wilson cabinet and now is president of the American -Manufacturers’ Ex- port Association, takes a less serious view of the problem than do others. He submits the following? “While it is true that the debt, principal and interest, possibly. cannot be paid in any one of the three ways suggested, it seems clear that it may be paid by a combinatien of the three, the proportion of each varying with the changing circumstances and times. “Again there seems a fallacy in'the state- ment of the probléem. Our so-called favprable balance before the war was the balance arising from our total export trade to all countries. The principal and interest of the debt is due us from Eurcpe alone. If distributed_ over all three methods of paymént, it need not be seri- ous, but if it were to seem s0 we have it in our own control to amend matters by selling more largely to-that vast portidn of the world which ‘is not involved in the debt to us. If to this end we had the wisdom to place American investments abroad, especially-in’ the countries, needing - development,” we ihight “control (as Great Britain does) by reason of those invest- ments an_export ‘tride which wotld ‘go- far to mafntain the: balance on-the right .side, while at the same time securing in large measure our own control .of - supplies -which - we must: necessarily purchass from other lands. It can hardly be ‘argied that haying parted .with our wealth it must necul-rlly be injurious to have it patd m" sented by Sherman J. Lowell of Fredonla, N. Y., master ‘of" theé National Gringe,” Mr. Lowell has no doubt that the debt Will be paid and thinks the payments will take the form of money and goods, the proportions and.character of goods to be determined largely by the debtor nations. But he adds:’ ‘Agricultural interests insist.now and will continue to insist that for every shipload of agricultural products which 18 brought here in competition with the ‘American’ farmer, a ship- load of manufactured articles. shall -also. be brought here in competition .with. the American manufacturer. It is as useless to try to shut out the one the other, but it would be worse than useless—it would, be- suicidal—to permit either dent of the Natlonal Association ‘of Manufsc- position’ turers. In response to The Star's inquiry, he submits the following: . 2 “The problem of European payment. of its American debt is the practical arrangement of continuing relations’'between a large debtor and his creditors. - The United States has invested inBuropean civilization as Europs invested ia 1ssue_1s not. & _capital repayment, “jabont: American Buyets Would Return Large Dividends in Future Business. 1y unsalable in Peru. By the time the order was exchanged three months had elapsed and the season gone. An exporter of shoes received an order from a South American mer- chant for so many shoes, to be packed in fifty-pound cases. This exporter saw the order and attributed the customers’ request for the fifty-pound ARD-HEA DE D, close-fisted business tactics applied to a deal in Missouri mules differ | largely from methods em- | ployed in building up foreign trade. jDiplomacy is as necessary in foreign lcolnmerce as the lack of it is char- acteristic of the door-to-door book agents’ methods. Sales are one thing, deliveries another. A customdr's{cases to what he classed as South wishes should be ‘equally valued with | American eccentricity. He sent the his trade. And unless the Americanshoes in 1,000-pound cases. Now the exporter realizes some of these things | exporter did mot know his customer the fnevitable must happen. A very |had to haul these shoes by mule train ripe, a very juicy plum—the trade and | to the interior, nor did he know his good w!ll of South America—will be|customer lacked the facilities for re- snatched from his very grasp and con- | packing. But when he received the sumed within his easy reach. customer’s complaint he threw it in Such a dismal prospect hardly bears | the waste basket with more words with our favorable balance of trade!about the South American craze over with South American republics, nor!minor details. with the increase in our South Ameri- can trade at the expense of European e i These instances are cited at random competition during the war. But it must be remembered that when Eu- | {Fom many which are told to illustrate rope was at war South American |the American’s lack of understanding of his customer in South America. trade turned to the United States from necessity. We are only entering | They are true and there are many more like them. the critical period—the era which will decided whether the American ex-| A well known South American min- porter can meet European competi-|ister to the United States gives his views on the lack of understanding tion in an open fleld, favor shown to none, and the best man to win. South American trade methods as fol- lows: Dependable Figures Lacking. X & Therefore the lesson which has not| 1 Bave lived in Latin America most jof my life. 1 am one of the vast num- been learned, that sympathy, under- - = standing and willingness to change |P€F Of People who have tried to buy goods from firms in the United States methods to meet new conditions is and have finally given up hope of being necessary to hold South American e trade, becomes of prime importance|2ble to transact business with your fel- low business men in a way satisfactory at this time. One is forced to generalize in speak- [to me. To recite my sad experiences would take a very long time. It will ing of trade lost through the unwill- ingness of the North American busi- |suffice to say that I was disappointed ness man to really learn the wantsialmost every time I tried long-distance and understand the nature of his cus- | buying from a firm in the United States. tomer in South America. There have |In this connection I will cite just one beert no figures complled on that sub- [of my observations. ject. But if there were, it is safe to| * ‘Catalogue English’ is not understood say the financial loss would be ap-|in Latin America. Take a catalogue of palling, while the loss in prestige and jone of your mail order houses seking opportunity would be even more so. |Latin American trade and turn to the - Indications of carelessness on the (section describing stockings, for in- part of the American exporter, which |stance. You will find prices ranging barm him and his countrymen, are|from 25 cents to $2.50 a pair, under frequent. Commercial attaches in [several {llustrations and such descrip- South America are constantly send- |tions as these: ‘This is the best in the ing back to the Department of Com- | world.' ‘No better manufactured at any ‘merce reports of the failure of Amer{- | price.’ ‘Satisfaction warranted or money can shippers ‘to regard the simplest |bac ‘Compares favorably with the requirements in packing goods des- |most expensive’ ‘Nefiing better to be tined for South American ports. Here [had regardless of price.’ o St i Sepirt. Catalogué Virtually Useless. ment last week. It is-typical. o e st il s Y “The confusion and lack of uni- torniiby 3 X the stockings are woven with the best 'ormity in markihg American goods John, Harry or Peter thread. Maybe for . Brazil," writss C i 5 tache A L Seture mercial At lthere is no hint as to *he material of e which the stockizzs are made. In near- o makes dt-diffioult o check |} ")) tumes the statement is so worded up the packages * * *. and.causes : a considerable waste of effort and |2S !0 be misieading or obscure to the Latin American. I have seen women timé. ‘As careless packi: d mark- e nE and mark” | who wanted to buy stockings read one ing by the shipping departments of PPing departments of, . ihe catalogues, then throw it away as American exporting houses is one of be of iha: DieTors stbAt di useless. Perhaps the catalogue may ave prejudiced our . . the women in the United States, trade in South _American countries, consideration of the following specific | *1€r® she can have the article ex- ingtructions would be to the advan. |CHanged In three or four days if it is et ot Ml oaraeals Saiie s ’\mnfllhctory But for the woman who is followed by diagrams and draw. |lives Where it takes four months to get ings showing simple rules to be fol- | (¢ Stockings, where there are no bank- lowed in shipping merchandise to |76 facllities and mo parcel post. the Brazil. catalogue, as I know it, is virtually use- less. Therefore you cannot blame the Shippers Were Too Wise. woman of Latin America for throwing But failure to comply with marking | away her catalogue and sending her or- and packing regulations is a small |der for silk, linen or cotton to Paris, matter compared with failure to pay | where Parisian dealers call bread bread, attention to filling orders with any- | wine wine or cotton cotton.” thing like satisfaction to' the cus-| What the minister says of the Latin tomer. Here is a recent instance: American turning to the Parisian is A New York silk firm received an |[true. He might add that he has the order from a silk merchant in Peru, |choice of turning to the London mer- the money accompanying the order |chant, the Berlin merchant, the mer- asking for a shipment of 100 pleces|chant of Venice or of Brussels, and of silk. Elghty pieces were to be |the choice in each case has its induce- black, the importer wrote, and twen- ments. ty pleces were to be miscellaneously selected - colors. The exporter re- ceived the order. He did mot know Why Germans Succeed One reason for the success with winning back her that black is a favorite color in Peru, :,:r: i‘:'g:fiy ;,'nm“ ,:d" is the nor could he understand why eighty |erort German merchants have made pieces of silk should be black while f¢, uynderstand the needs of South anlygewonty ens colorpd. America. You don’t find German ex- So he reversed the order, sent the|porters sending a cargo of material customer twenty pieces of black silk [ for palm beach suits to Peru. One and_eighty pleces of colored silk, the Am,m,,, exporter did that recently. colors being of such a strange variety | His investigation of the field in which and assortment that they were utter- he wished to market his product con- sisted, evidently, of & cursory survey of a map which showed that Peru, being south of Panama, where palm beack sults are worn, must neces- sarily be a fine place to sell his tropi- cal climate clothing. Perhaps he is wondering today why the project was a failure. German merchants have made it a point to specialize in studying the needs in the various South American republics, discovering, then creating. the market. A German agent recently sold several hundred small electric motors in Mexico before his American competitor knew that Mexicans needed small electric motors. European exporters have been selling in South America a long time. They have learned that South Americans want their goods packed a oertain way, delivered in a certain way and in a specified time. Once the South American importer learns he can de- pend on having his orders filled to the letter, he is a satisfied customer. Selling & commodity is one thing and delivering it is another. Goods Réady for Junk Heap. The case is cited here of an able American salesman who visited a certain country of South America and began taking orders right and left. He found no difficulty in disposing of his wares on paper, but future transactions were left in doubt, for Bade ROBERT TODD. the salesman, after sending his orders It ia “wnderstodd that Prestdent| back to the states, departed for parts selected, Robert ‘Todd,| unknown and left the firm to do the well known New York buainess man.| rest. The orders were received, and e e st !® yon! in time came into the hands of 3. Tedd is mow in Europe studying the | shipping clerk, who probably mever Mm&cm-fll:z'm of the country to which the Frasrgiied i {Cmtiabed on Third Page Rl w2 da L W - Likely Qloicei of President AsNext Immigration Chief e e G L S M e S . et S DS ) e S mRen S SO0 AP L Fy