No. 205.

Mr. A. T. A. Torbert to Mr Fish.

No. 21.]

Sir: I have the honor to acknowledge the receipt of State Department circular dated August 19, also copies of a report of the Department to the President in answer to a resolution of the United States. [Page 281] Senate in regard to the commercial relations between the United States and Spanish American countries. It is a lamentable fact that, notwithstanding the geographical contiguity and political friendship existing between all of these countries and the United States, their commercial relations are not what they should be; and while we may regret the political cause which, in past years, caused the commerce of these countries to be diverted to other markets than ours, it is a consolation to know that, with the close of our rebellion, that cause has been forever removed. And under the present circumstances it would seem that the true commercial policy of the United States is to do all in her power, consonant with the public interest, to turn this commerce toward our markets. The commercial relations of Salvador with the United States are very small compared to those with Europe. But I am pleased to say that they are on the increase, and the above is true in regard to all of Central America. One way to increase these relations with the west coast of these republics, is to have them put in direct communication with San Francisco, which is the natural market for much of the produce of these states. And this object is specially desired by these states, as shown by their concessions to a company recently started in Guatemala to put on a line of steamers between the Central American ports and San Francisco, viz: Guatemala gives fifteen thousand dollars per year; Salvador, about eighteen thousand; and the other states, eight or ten each. The above-mentioned line has failed, and the same subsidies can be obtained by any company who will put the line in operation. At present it appears to me that the Pacific Mail Steamship Company is the proper one to take the matter in hand, and as it is as much to our interest as that of these states, it seems nothing more than just that we should meet them with a liberal subsidy to an American company to carry out this object. There can be no doubt that the secret of the number and success of the English steamship lines is due in a great measure to the liberal aid they receive from their government, and in the present state of our commercial relations I do not think the United States can pursue a cheaper policy to increase them. With a direct line to San Francisco it would not take long to build up a good trade with coffee, sugar, tobacco, fruits, &c., &c., and in return will be sent flour, potatoes, wines, soap, &c., &c. In 1869 there were imported from San Francisco to Central America in small sailing vessels forty-five thousand barrels of flour. When the commerce of the Pacific coast arrives on the Isthmus why should it seek the European markets rather than New York? We may say, in the first place, that a large majority of the foreign commercial interest of the west coast is at present in the hands of Europeans, who, naturally, all things being equal, send to their own markets. And, again, the European markets are higher than New York; moreover the commissions and guarantees are higher in New York than In Europe. And, again, by steamship the freights are about the same from here to England as New York. It only costs about five dollars more per ton to send indigo to England than New York, nor more than two dollars more per ton to send coffee to England than New York, and I believe sugar is little cheaper to England. Outward-bound freights from Europe and New York to the west coast, via Isthmus are about the same. It would seem that our being much the nearest market, there should be a greater difference in the freights. Sailing-vessels can be chartered in England, with freight out and back, at twelve to fifteen dollars per ton; of course it takes a long time for a trip, yet much business is done in this way. The same voyage from New York would not be undertaken for anything like the above rate. Again, merchandise can be bought much cheaper [Page 282] in Europe than in the United States, and the cheapest and most inferior articles are brought to this market with which we cannot compete in price. But I am glad to say that the people are gradually getting their eyes open to the superiority of our manufactures, and are beginning to prefer them notwithstanding the difference in price. It appears now that the interoceanic railroad in Honduras will be pushed forward to completion, and that will give us another means of increasing our commercial relations with these countries. But the grandest enterprise of all to increase these relations is the construction of an interoceanic canal, and I believe the route across Nicaragua will, in the end, be found to be the most desirable. The State of Salvador exported during the year 1869 $3,768,357 23, and only $361,688 47 of this amount went to the United States.

For the same year Salvador imported $3,728,995 62, and not $200,000 of this amount came from the United States. At present we have comparatively little commercial relation with the South Pacific, and it is not likely to improve till an opposition line is put on between Chili and Panama, and an equitable arrangement in regard to freights made with the Panama Railroad. The present line of steamers from Panama to England, via Peru, Chili, and the Straits of Magellan, is owned by one company, and one cause of their extending-their line from Chili, via the Straits of Magellan, to Europe, was the high tariff across the Isthmus, and their rate to and from Chili and Peru is ten per cent, cheaper than the Isthmus route, and they have made their tariff so high between Chili and Panama that little freight finds its way to the Isthmus, and thus is entirely diverted from the United States.

It would be pleasing to see the United States sufficiently encourage the establishment of an American line on this route with a lower rate of tariff to New York, so that our market could be put more on a level with those of Europe.

ALFRED T. A. TORBERT.