PAW. *■ AM£«. t s 1 The PAN AMERICAN UNION JOHN BARRETT : : ; Director General FRANCISCO J. YANES : Assistant Director 1 1 1 1 1 i I i ■tgggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggt OUR OPPORTUNITY IN LATIN AMERICA BY John Barrett ggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggt 1 5 WASHINGTON. D. C. 1 igi6 'gggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggtatgaaggggggggggggggnmgggggggggggggggggKg^ S' Digitized by the Internet Archive in 2017 with funding from Columbia University Libraries https://archive.org/details/ouropportunityinOObarr.- OUR OPPORTUNITY IN LATIN AMERICA' . • . . • . . • . . • . These are the times when everybody should be studying the twenty American republics lying south of the United States. These are the days of unprecedented and legitimate opportunity in Latin America for the com- mercial and financial interests of this country. This present year should be the beginning of a new epoch in the material, social and polit- ical relations of North and South America. The next ten years are going to be “all American" years. All America is to attract the attention of all Americans. This new development is inevitable. The cause is found in the natural wealth, resources, and potentialities of Central and South America, their actual commerce and trade, their re- markable progress during recent years, to- gether with the unceasing propaganda of the Pan American Union, which was at first even ridiculed and little appreciated, but is now generally valued and recognized. The occa- sion of this new interest at this moment is the European war and the emphasis it has placed upon the geographical segregation and commercial solidarity of the nations of the western hemisphere. Consider Latin America in any phase one prefers, and it is worthy of keen interest. Let us first look at it geographically and physi- cally. We see twenty countries ranging in area from little Salvador, with less than 8000 square miles, or smaller than Vermont, up to mighty Brazil, with 3,200,000 square miles, or greater than the United States proper with Great Britain thrown in! In all. they spread over nearly 9,000,000 square miles, or three times the connected area of the LTnited States! They contain mountains higher, rivers longer and more navigable, val- leys wider and more fertile, and climates more varied than those of the United States. Noting the population, we find that Costa Rica starts the small end of the list with 400,000 inhabitants, and Brazil tops it with 20,000,000. All Latin America supports to-day approximately a population of 75,000,- 000, which is increasing by reproduction fas- ter than is the population of the United States. When the new emigration from Europe starts in after the war, and when the Panama Canal is in full use by the shipping of a peaceful Europe, this total may soon overtake and pass that of the big sister nation of North America. THE MAGNITUDE OF LATIN AMERICAN TRADE We are almost astonished by the figures of Latin American commerce. They make us respect many of the southern republics and peoples, even if some other influences may not be so favorable. In 1913 the twenty southern neighbors of the United States, through sheer strength and capacity, pushed up the total of their foreign trade to the huge sum of nearly $3,000,000,000. This w'as divided almost equally between exports and imports, with the actual balance of trade in their favor. Argentina, for example, with an ambitious, vigorous and prosperous peo- ple numbering about nine millions of souls, conducted a foreign commerce valued at the surprising total of $900,000,000, which makes an average of about $100 per head. Chile, a land of achievement and promise, lying on the Pacific Coast of South America (like the States of California, Oregon and Washing- ton, on the Pacific slope of the United States) covering an area of nearly 300,000 square miles, or more than that of Texas, and di- rectly tributary to the Panama Canal, bought and sold in foreign commerce products valued at nearly $265,000,000. *By John Barrett, Director General of the Pan American Union: formerly U.S. Minister to Argentina. Panama and Colombia. Revised and reprinted from the Rrview of Reviews. October. 1914. 3 4 THE AMERICAN REVIEW OF REVIEWS. INTEREST OF THE UNITED STATES vSeveii years ago, in early 1907, the Pan American Union, then known as the Bureau of American Republics, was reorganized in accordance with the action of the Third Pan American Conference held in 1906 at Rio de Janeiro, the capital of Brazil. At that great international gathering, made memor- able by the presence of Elihu Root, Secretary of State under President Roosevelt, it was unanimously voted by the delegates of the twenty-one independent American govern- ments to make the bureau, which had been established by the First Pan American Con- ference held at Washington in 1889, a pow- erful and practical organization and agency — absolutely international in its control, sup- port and scope — for the purpose of dissemi- nating useful information about each of the republics among them all, and thereby pro- moting Pan American commerce, intercourse, friendship, and peace. It fell to my lot and it was my honor, following several years’ service as United States Minister in the three Latin American countries of Argentina, Pan- ama, and Colombia, to be elected the first executive officer of the bureau under the plan of reorganization. I can, therefore, speak feelingly of the conditions and difficulties which at that time confronted the new plan and propaganda. Although I was splendidly and loyally directed and .supported bj' the Secretary of State of the United States and the Latin American ambassadors and ministers, who constituted its governing board, the task at first was indeed discouraging and almost hopeless. The general interest in Latin America throughout the United States was so little, and the knowledge of Central and South America possessed by the leaders of ]niblic opinion, educators, students, travelers, and especially manufacturers and exporters, was so meager that I literally went up against an almost unyielding stone wall of ignorance and prejudice. Now, presto change! The Pan American Union is to-day literally flooded, choked and overwhelmed with correspondence and in- ciuiries, supplemented by daily calls in person of hundreds of men and women, coming from every part of the United .States — and Latin America also. Editors, congressmen, au- thors, librarians, statisticans, university pro- fessors and students, tourists, and a multitude of men and firms engaged in manufacturing, exporting, importing, banking, shipping, and engineering, pour an endless and swelling stream of questions and calls into the office of the Pan American Union. Looking at the international situation as it stands to-day, the war, no matter how much it is deplored, has done more in a very .short space of time to awaken the real inter- est of the Government and people of the Ibiited .States in Latin America, and corre- spondingly to turn the attention of the gov- ernments and people of Latin America to the United States, than all other influences put together during the last few years. It has suddenly aroused the great majority of the financial and commercial men of the United States, who before gave little consid- eration to Latin America, to a study and real- ization of the Latin American opportunity. Their interest has reacted on the press and public at large, and we now behold a popular appreciation of the picture which we Pan Americans have long painted in vain to the same press and people. In this quick and widespread awakening, however, the great- est care must be exercised that mistakes in judgment and expectation as to the Pan American field of opportunity do not ulti- mately retard the real understanding and lasting intercourse that should permanently follow. Hysteria and excitement must give way to wisdom and calm. An accurate knowledge of exact conditions of trade and environment must not be neglected or over- looked under the fascinating influence of ex- aggerated stories of alleged golden oppor- tunities. WE already outranked ENGLAND AND GER- MANY IN LATIN AMERICAN TRADE The truth is that a considerable element of the manufacturers, exporters, importers, investors, bankers, and engineers — some of them going back through an experience of thirty years, but most of them responding in the last ten years to the unremitting labor and educational work of the departments of State and Commerce of the United States and the Pan American Union— not onlj' have not failed but have succeeded brilliantly in this field. It may surprise some readers of the Review, but it is none the less true, that the exporters and importers of the United States during 1913 not only conducted a greater total exchange of trade with Latin America than did their competitors in either Great Britain or Germany, but also a trade second only to that of these two countries combined! Here are the figures that teU the story : The total exchange of Latin American products with those of the United States in 1913 was valued approximately at $818,- 000,000; Great Britain, $644,000,000, Ger- many, $408,000,000. In exports to Latin America, the United States slighth’ led Great Britain, while Germany was far behind! The confirmator}- export figures are : Great Britain, about $322,000,000; United States, $325,000,000; Germany, $216,000,000. In purchases or imports from Latin America, the LTnited States has a big lead over both Great Britain and Germany, or a total almost equal to both combined! The tell- tale figures are: L'nited States, $504,000,- 00b; Great Britain, $321,000,000; German5', $189,000,000.' Realizing that it might be said in rebuttal that the balance of trade is against the United ^The foreigh commerce of the twenty Latin Ameiican countries with these three countries in 1915 was as follows: With the United States. $978,865,686: the United Kingdom. $543,165,606; Germany, $13,684,804. OUR OPPORTUNITY IN LATIN AMERICA. 5 States, as is not the case with Great Britain and Germany, it must be, pointed out that the imports of the United States from Latin America are largely valuable and useful raw- products needed for the employment of labor and capital in manufacturing plants and for necessary food supplies. In other words, the United States, in the ultimate economic adjustment of values, has, in effect, no un- favorable balance of trade with Latin America and makes consequently the best showing of any nation, not excepting Great Britain and Germany. All this is emphasized and enlarged upon in order to destroy the old legend honestly founded on conditions of years ago, that the United States is far behind European coun- tries and doing little compared with them in the Latin American fields of commerce. On the other hand, it is to be admitted that there are still extraordinary opportunities for the United States to increase and diversify its Pan American trade. Inasmuch, moreover, as the United States has made such a record in average times and in conditions of peace, it ought to do correspondingly w^ell in these exceptional times and conditions of w-ar. THE TRADE WITH EUROPEAN NATIONS There are two important phases of the present Pan American commercial situation which should have frank and thoughtful con- sideration by the business men and others interested; if they would fully realize what must and should be done in the premises. The first is the amount or proportion of her foreign trade which Latin America conducts with European nations, many of whom are now at war and a share of whose trade the United States now expects to obtain. The second is the condition or capability of Latin America to transfer this commerce with the accompanying financial transactions from Europe to the United States and so swell the volume of the reciprocal trade between the United States and Latin America. The figures connected with these phases are both interesting and instructive and certainly not dry to the student of Pan American possi- bilities. The twenty countries of Central and South America, including the group of ten made up of Mexico, the five Central Ameri- can republics of Guatemala, Honduras, Sal- vador, Nicaragua, and Costa Rica, the three Caribbean lands of Cuba, the Dominican Republic and Haiti, and Panama, together with the South American Continental group of ten, consisting of Colombia, Venezuela, Brazil, Uruguay, Paraguay, Argentina, Chile, Bolivia, Peru, and Ecuador, bought imports and sold exports in 1913, valued at the immense total of approximately $2,865,- 000,000, of which the imports were $1,325,- 000,000, and exports, $1,539,000,000. Of these imports, fully $770,000,000 came from countries now either at war or under the embargoes of war; and they were mostly manufactured products which could be sup- plied by the industries of the Linited States, if Latin America wanted them or could afford to buy them. At present, by comparison, the United States sells similar products to Latin America valued annually at $317,000,000. These totals tell their own story — in theory; in practise, the result will be de- termined by the ability of the American manufacturer and the Latin American im- porter to meet the new and peculiar condi- tions of the market. Of her exports, Latin America sells to the same European nations raw products valued at approximately $785,- 000,000. Although the United States takes Latin America’s output to the value of $504,000,000, no argument is needed to point out the vital importance to Latin America that a market for these exports, which would usuallj' in times of peace be found in Europe, should now be found as much as possible in the United States. The grand total of the regular annual commerce which Latin America conducts with Europe, when relations are not disturbed by war, should convince everybody that it offers a remarkable opportunity for the United States. What it does will largely depend upon its own efforts. Here, in other words, is an annual business of approximately $1,553,000,000, which is awaiting an inter- national readjustment. If, of course, the financial and commercial interests of the United States can devise ways and means to supply what, under the conditions, Latin America needs, and to buy, in turn, a goodly proportion of her surplus raw products, which have heretofore gone to Europe, they will not only bring large and permanent benefits to themselves, but to the corresponding in- terests of Latin America. This is self evident. AMERIC.AN BRANCH BANKS IN SOUTH AMERICA But the opportunity exists not only alone in exports and imports. Akin to these are the banking, shipping, and investment oppor- tunities. The problem of banks is nearing a solution, though there are still both diffi- culties and possibilities. Between the United States and Panama there are several banks controlled by United States capital, but they are far from being enough for the demand. From Panama south to Argentina and Chile there has been no bank of United States capital until recently the National City Bank of New York City, acting under the provi- sions of the new Federal Reserve Act, de- cided to open branches in Rio de Janeiro and Buenos Aires, with possible extensions to Valparaiso and Lima.* There may be room for others if they are backed by sufficient capital, but they cannot expect large returns •Since the publication of this article the National City Bank of New York has established branches at Buenos ■Airesand Rio de Janeiro, at Montevideo. Sao Paulo, Santos, Bahia, Santiago, and Valparaiso 6 THE AMERICAN REVIEW OF REVIEWS. for several years. Ever since it was my ex- perience to serve as United States Minister in the Argentine Republic ten years ago, I have repeatedly urged the banking interests of the United States to take advantage of this opportunity. It is, therefore, a source of extreme satisfaction at last to see these hum- ble efforts rewarded. THE INVESTMENT FIELD The general investment and loan oppor- tunity in Latin America is great — possibly greater than that opening to direct trade, banking and shipping. Up to the time of the outbreak of war in Europe Latin America negotiated fully 95 per cent of its public and private loans in Europe. National bond issues and loans for personal enterprises were floated and financed in London, Paris and Berlin rather than in New York. Now, the situation must change, for, even when the war is over, Europe will need all its spare money for home loans and bond issues to pay her war debts and make up for the industrial ravages of the conflict. If the United States investors will reform their prejudices in regard to revolutions, the stability of governments and climatic condi- tions, they will enter upon a big new field of legitimate opportunity not unlike that which they enjoyed twenty years ago in the Western States. They will also earn the gratitude of the Latin American governments and peoples whom they accommodate. Not only must governments have national loans, but railroad extensions, new steam and electric lines, water powers and plants, harbor improve- ments and docks, building operations, mining and timber working operations, and harvest- ing of crops, must be financed. With these demands for money covered by the United States, the vast supplies and materials re- quired by the consequent dev^elopment should come from the United States and reflect favorably on trade. IMPROVED SHIPPING FACILITIES In shipping, there is a peculiar opportunity and yet it has its limitations. While until now there have been only a few vessels flying the American flag and running between the Atlantic ports of the United States and those of the east coast of Latin America, it must not be overlooked that, considering foreign vessels with reference to numbers in service and facilities for freight and passengers, there has been great improvement during the last five years. So extensive has been the favor- able change that many men in public life and some editors and special writers have failed to keep track of the new conditions for carrying mails, freight, and passengers. They still cite the old condition as if they were true of the present. It is not an exag- geration to state that there has been a hundred per cent improvement in the quality and quantity of the British and German vessels engaged in the Pan American trade during the last ten years and up to the out- break of the war. It is a fiction that a considerable portion of the United States mails to Brazil, Argen- tina, and Uruguay, are sent via Europe. It is another fiction that there are no good passenger vessels sailing from New York to Rio de Janeiro, Montevideo, and Buenos Aires. In fact, there are now several large passenger boats on that regular run, which provide as good accommodations as can be found on most of the European vessels. The steamship service on the Gulf of Mexico and the Caribbean sea is as fine as that on the Mediterranean, and here many American flags are seen. The recent transfer of the large fleet of United Fruit Company’s boats from the English to the American flag marks a great step in advance. The best opening for improvement in both foreign and Ameri- can steamship service is on the western or Pacific coast of Central and South America. Of freight vessels and lines flying foreign flags, there were abundant offerings for charter and cargo, up to the outbreak of war, throughout the Pan American seas. That the trade of the United States and Latin America has not been so greatly ham- pered, as often declared, is shown conclu- sively by the fact that this commerce has increased nearly one hundred per cent in the last eight or nine years, or from about $450,- 000,000 to over $815,000,000! TRAVEL TO AND FROM LATIN AMERICAN COUNTRIES An interesting opportunity of signal im- portance in the present crisis, is that of de- veloping the exchange of travel between the representative men of Latin America and those of the United States. Instead of always planning trips and excursions from the United States to, for example, Rio de Janeiro, Montevideo, Buenos Aires, Santiago, La Paz, and Lima, why not invite the men of those cities and their chambers of com- merce to send delegations to the correspond- ing cities of the LMited States? The war will materially reduce the number of South Americans and Central Americans who regu- larly go to Europe and its capitals. Why not bring them to Washington, New York, Chicago, San Francisco, New Orleans, and the other interesting cities of the United States? Correspondingly, if only a small portion of the Americans who usually seek European entertainment will visit the cities of South and Central America, they will enjoy an interesting experience and gain new ideas of the western hemisphere. There is no more powerful agency for peace, acquaint- ance, and commerce, than traveling. Travel and trade — in short, travel and trade to- gether! There is also the little considered but most important educational and intellectual op- portunity. Never was there a more oppor- tune moment than this one for an intellectual appreciation of Latin America by the edu- OUR OPPORTUNITY IN LATIN AMERICA. 7 cated men and women of the United States. There should be a closer coming together of the men of intellectual leadership of all the American nations and peoples. There should be a migration to Latin America of the educators, scholars, scientists, and students of the United States — not to teach and lead, but to learn and cooperate. Latin American savants, professors, authors, and publicists should be invited to visit the United States and address the learned societies of its insti- tutions and colleges. Students, both those in course and graduates, should be exchanged in increasing numbers by the universities of North and South America. For this end the Pan American Lmion has labored incessantly for years and it is gratifying that some con- siderable progress is being made. Notable work in this direction has been done by the Pan American section of the Carnegie Peace Endowment. Many of the universities, col- leges, and scientific schools of the United States, have gone on record in the Pan American Union as offering inducements to students from Latin America, and it is believed that this action will be reciprocated. Allied to this idea of intellectual and edu- cational relationship is that of the study in the United States of the Spanish and Por- tuguese languages and their literature. Dur- ing the next decade, these languages bid fair to be of more practical value to the average young American than French or German. The more men and women there are in the United States who can speak Spanish and Portuguese fluently, the quicker will that sen- sitive line of difference between North and South Americans disappear. It is to be re- membered, moreover, that “Spanish Amer- ica” as the phrase is commonly used, is hardly correct. Intended to mean or cover all the countries of the western hemisphere south of the United States, it cannot include Brazil, the largest Latin American country in both area and population, whose language is strictly Portuguese, or even little Haiti where French is the predominant tongue. “Latin America” is the only safe and accu- rate general descriptive phrase in referring to the countries south of the United States, but the very serious mistake must not be made of disregarding the individuality of each coun- try as is so often done. In discussing and describing the peoples of this or that land, they should not be called “Latin Americans,” “Spanish Americans,” “South Americans,” or “Central Americans,” but described as “Argentines,” “Bolivians,” “Brazilians,” "Chilians,” "Peruvians,” "Colombians,” "Mexicans,” et al. To call an "Argentine,” or “Brazilian,” by the name of "Spaniard” or "Portuguese” would be exactly like call- ing a Yankee, or Southerner, who is descended through many generations in the United States, an "Englishman”! Now, a word of caution may not be out of place. There is no Eldorado in Latin America! There is no golden road to sudden wealth in Central and Southern America! There is no army of business men there waiting with coin of the realm in their out- stretched hands to purchase anything and all things which may be carried to them ! There is no actual famine in the real necessities of life and in food supplies. There is no magic way of transferring immediately the great buying and selling operations of Latin Amer- ica and Europe to corresponding transactions with the United States. There is, naturally, an unavoidable scarcity of money, due to the widespread financial stringency of the world, caused by the war, which must for some time interfere with the upbuilding of a great, new Pan American commerce, but, at the same time, these countries, these peoples, their products, their resources, their potential wealth and their conditions of demand and supply, already extensively developed, are there, and worthy of the careful investigation and study of business men and others who desire to participate in the great onward movement of the southern republics. The best way to know this fascinating field is to visit it in person — or to send trusted and trained representatives with an appreciation and knowledge of the environment, not only as it existed prior to the war, but as it is now affected by the war. At this writing many things are being done officially and unofficially to meet the extraor- dinary situation, and a spirit of optimism is beginning to take the place of the pessi- mism which prevailed in both North and South America when the European war started its cruel campaign. The transporta- tion problem is being tentatively met by acts of Congress, providing respectively for the American registry of foreign-built vessels and for the purchase of vessels by the Government to be leased in turn to private companies. In a very short time it should be possible to judge fairly the effect and value of these measures, and to take such other cooperative steps as they may require. The authorization given by the Federal Reserve Board to the National City Bank of New York to open branches in South America has already re- sulted in a decided improvement of the Argentine-United States situation, and should work equally well in other countries. The Argentine Ambassador, Dr. Romulo S. Naon, at the beginning of trouble, under the instructions of his government, opened a special office in New York City and con- ducted a natural gold exchange business be- tween Argentina and the United States which proved a great help to their business and financial relations. Similar actions were taken by the Brazilian and Chilean Ambas- sadors and the Ministers of some of the other countries, although they did not actually open special offices. The Latin American consular representatives in New York City met in response to the call of Mr. Gonzalez, Consul- General for Costa Rica, and took steps through their united action to relieve the tension and tie-up in the trade and money transactions between their lands and the United States. T he pan AMERICAN UNION is the inter= national organization and office maintained in Washington, D. C., by the twenty=one American republics, as follows: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Domini= can Republic, Ecuador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Salva= dor. United States, Uruguay, and Venezuela. It is devoted to the development and advancement of commerce, friendly intercourse, and good under= standing among these countries. It is supported by quotas contributed by each country, based upon the population. Its affairs are administered by a Direc= tor General and Assistant Director, elected by and responsible to a Governing Board, which is com= posed of the Secretary of State of the United States and the diplomatic representatives in Washington of the other American governments. These two executive officers are assisted by a staff of inter= national experts, statisticians, commercial special= ists, editors, translators, compilers, librarians, clerks and stenographers. The Union publishes a Monthly Bulletin in English, Spanish, Portuguese and French, which is a careful record of Pan American progress. It also publishes numerous special reports and pam= phlets on various subjects of practical information. Its library, the Columbus Memorial Library, con= tains 36,000 volumes, 18,000 photographs, 132,000 index cards, and a large collection of maps. The Union is housed in a beautiful building erected through the munificence of Andrew Carnegie. Press of Gibson Brothers Washington