No. 211.

Mr. James B. Bond to Mr. Fish.

No. 27.]

Sir: I have the honor to acknowledge receipt of circular from the Department, under date of August 19, calling for information “touching the commercial relations between the United States and Spanish American countries,” and of the report, dated July 14, made by the Secretary of State on the subject.

The exports from this country consist of India-rubber, cacao, Brazil nuts, balsam copaiba, and annotto, (urucie;) of these by far the most important is India-rubber. I hand a tabular statement of its export [Page 292] which shows that shipments of this article to us have given from

52,848 a, (32 lbs.,)=1,691,136 lbs., in 1851, to

182,939, a, (32 lbs.,)=5,854,048 lbs., in 1869.

The cost of India-rubber has increased in proportion to the demand in consuming countries, and is still now double what it was at the beginning of the term named. Exports to England show a nearly equal increase, being 975,520 pounds in 1851, against, in 1869, 5,069,824 pounds; and the whole amount exported stands as 2,949,600 pounds in 1851, 11,631,584 in 1869.

It must be remembered that the surplus stock is constantly overflowing from one to the other country, so that the above statement must not be considered the exact measure of consumption in England or the United States.

I hand also a table of general exports from this port during 1869, showing shipments to United States, $3,275,363; Great Britain, $2,731,551; other countries, $2,138,616. Making the whole export from this port about $8,000,000.

The next in importance to rubber is cacao. This goes almost exclusively to France. The value of our exports to the United States greatly exceeds that of our imports. The balance of funds for purchase is provided by drafts on England, based upon letters of credit granted by banking houses in New York.

India-rubber is not a product of cultivation; it is extracted from a forest tree, and no restriction is placed by government on those who resort to the public domain to obtain it. It is said that the forests nearest to purchasing markets are being exhausted, the trees being killed, or yielding less milk from too frequent tapping, but the producing area is so vast, and means of access to remote points are so rapidly increasing, that we do not look for any immediate falling off in the supply; on the contrary, the production will probably steadily increase for years to come. Cacao is cultivated, though carelessly; it is not a sure crop, and has partially failed for the last two seasons. The other articles named are all natural products, only annotto requiring considerable labor to prepare it after gathering the seed. The statement of exports may be relied on as nearly accurate, but such I am sorry to say is not the case with the official table of value of imports, to which I next call your attention. It must, at best, be regarded as a not very close approximation to accuracy. I hand it in because it is official, and its errors may in some degree be corrected by table No. 2 of packages imported, which I obtain from private sources, but which also, in some respects, is erroneous. Leaving to each the considerations it may deserve, I would offer my own estimate, derived from various sources. Thus, whole value of imports, 1869, $6,000,000. Of which, from England, not less than half, and probably $4,000,000. The remaining $2,000,000 from France, Germany, Portugal, and the United States, our portion not exceeding $500,000. The principal article that comes to us from the United States is flour. Of this we import about 2,000 barrels per month, or say, 25,000 to 26,000 barrels yearly; the consumption of our market is rated at 2,000 barrels per month. Trieste sends us, one year with another, about 2,000 to 2,500 barrels of superior quality, equal to the formerly high character of the Richmond brands, Eallego, and Haxale, but the cost is too high to compete seriously with ordinary American qualities.

Lard, kerosene, soda crackers, axes, and machetes, a few pine boards, some chairs, Florida water, and patent medicines close the short list of American importations. The first four articles only are important in value, and have heretofore withstood European competition. Collins’s [Page 293] axes, machetes, and other steel manufactures still hold the high place which their superiority over European work of the same class long since gained for them, but their sale is limited by cheap imitations, particularly of machetes, imported from Germany, and sometimes even bearing the American name and trade-mark. Recently, however, an article of German manufacture has been produced, which is said to be fully equal to that made in America and of somewhat less cost. American axes, machetes, and other steel goods have so long maintained a superiority over all others that we have regarded them as a national specialty; but I fear we are about to meet serious competition from continental manufacturers. In heavy cottons, our supply of which was, up to 1861, chiefly derived from the United States, we can no longer compete with England. Unbleached goods, (drills, ducks, plain cottons,) stripes, and blue goods are no longer looked upon by American importers as forming part of their cargoes; a few bales only are received for sale to those who may require a superior article for some particular use, but the amount is unimportant. Even previous to our war flimsy imitations of American goods were appearing in the market at low cost. Our internal troubles enabled England to obtain possession of the market, which she still holds, by cheapness of productions and cheapness of transport.

As regards cheapness of production it is unnecessary for me to make any suggestions; the subject has been fully discussed for years; it opens many collateral isssues, and I could not hope to throw any further light upon it. It is sufficient for me to say that England does produce cheaper goods than we produce, and that she has driven us from this and other foreign markets by doing so.

The question of cheapness of transport is an important one, with which as regards foreign trade the Department may not be so familiar, and I proceed to state certain facts.

Up to about one year ago the direct trade between England and this country was conducted through sailing vessels. At that time two steam lines, unsubsidized, and intended chiefly for freight, were started from England, say Liverpool, to this country, touching at Lisbon, and at Maranhao and Ceara, ports on the Brazil coast. Their measurement is about 1,000 tons; capacity of freight, 1,400 to 1,600 tons, weight and measurement; cost, £30,000 each; and they make the voyage from Liverpool to Para in about twenty-one days. They placed their rate of outward freight at the same price as that of sailing-vessels, 40s. per ton; and though this rate has since been raised to 50s., sailing-vessels cannot compete with them, and, in fact, so far as relates to general cargo, have abandoned the trade.

The great variety of cargo, coming not only from England but from the continent, much of which is of small bulk compared with its value, furnishes abundance of freight and makes the percentage of transport charges very small. Not only has the original enterprise increased its tonnage, but a third line is already contemplated.

On goods of small value compared with their bulk the rate is even as low as 25s. to 30s. per cubic foot. This applies particularly to barrels of ale and porter, &c. Even taking the highest rate charged, say 50s. per ton, it amounts to only about 30 cents per foot.

We have a steam line running monthly from New York, touching first at Para, thence to Pernambuco, Bahia, and Rio de Janeiro. It is subsidized by both governments, but as American exports consist of bulky goods of comparatively small value, they cannot bear the freight of steam carriage, and these steamers have not affected the business of sailing-ships, by which the imports to this port are yet brought.

[Page 294]

The duty charged on many American imports is very heavy, and diminishes amount by lessening consumption. I annex tabular statement of duty on imports and exports.

The imperial government has recently declared that its financial condition is sufficiently favorable to allow of a diminution of import duties. Any influences which our Government may be able to exert in this sense will of course be favorable to general trade, and it is thus only, so far as I can see, that the action of our government can benefit commercial relations between the two countries. The duty on many articles of foreign manufacture amounts to a prohibition in the northern provinces; the object of the system being “to encourage national industry,” a most mistaken policy, in this country at least, when in all the provinces agriculture suffers from want of labor, and in the Amazonian provinces the population is not sufficient to gather the natural products of the country.

A few unimportant manufactures are, by the system of high duties, protected in Rio de Janeiro, and all the northern provinces suffer in consequence. The civilizing agency of cheap comforts is thus denied, specially to the provinces of the Amazon, containing a population of perhaps 300,000, scattered through a country reaching from the mouth of the river Amazon to the eastern borders of Peru and Bolivia. Of this population perhaps 30,000 are slaves.

A considerable business is done with Peru and Bolivia in merchandise partly brought here, and partly imported with special destination by merchants established in those countries.

Difficulty of access makes the trade of Bolivia small as yet, but that with Peru is already important, and is increasing in value. No duties are charged in the eastern riverine ports of either country. By an early opportunity I will forward some statistics in regard to this trade.

I have thus furnished such information as I believe meets the views expressed in your circular. Brazil is, however, scarcely within the terms of that circular, or of the Senate’s resolution. It is not a “Spanish-American State,” nor is it “in close relations of geographical contiguity” with the United States, nor would its form of government suggest any special “political friendship” with a republic. Yet will the same means which the Government may find effective to increase our commerce with other countries be equally applicable to Brazil. In none of the Spanish-American States is the feeling toward our country more kindly than it is in Brazil, and this is particularly the case as relates to the Amazonian province the apprehension of territorial encroachment, which sometimes causes great uneasiness in States that are nearer to us, does not exist in Brazil, and the impolitic centralization of authority in Rio, under which these remote provinces suffer serious inconvenience, is often contrasted with the government of a country which is in fact as near to them as their own capital, to which they are forced to appeal in matters involving daily interests. Commercial relations do not, however, depend upon, indeed are scarcely influenced by, political sympathies. It is not to any sentiment of friendship in this or other countries that we must look for the development of commerce. Trade has but one law, which is invariable, viz., to buy in the cheapest market. We shall not be able to meet the competition of rivals until we can produce as cheaply as they can produce, and carry as cheaply as they can carry; whether the advantages of cheap labor are profitably bought, by the aggregation of a large population in a limited area, is another question, and one which it would not become me to discuss. But in answer to your permission “to make such suggestions as I may deem [Page 295] useful,” I will briefly add that the commercial relations between the United States and this country will be promoted—first, by any means through which the cost of our home productions may be lessened; next, by such efforts as may reduce the duties of import and export in this country; and, finally, by inducing the government of this country to abandon the idea of protective tariffs in order to devote its whole strength to agricultural development, in which its true interest lies. Whatever may be the benefit of a protective system elsewhere, it is certainly an error here; nor, indeed, is it within the range of human intelligence to administer such a system in a country of vast extent and varied production without injuring one portion for the benefit of another.

Until recently all the steamers plying on the Amazon River were of British build, and this was due entirely to the fact of certain American builders having, years ago, accepted a cheap contract from the Peruvian government for boats to ply on the upper river. They soon decayed, and the result of this short-sighted policy was to exclude for many years all American-built boats from Amazonian waters.

During the last two years, however, a company, subsidized by the provincial government, has placed four American boats on the river. The novelty of their build at first caused considerable surprise, but I am happy to say they have given great satisfaction on account of their small consumption of coal and general adaptation to river navigation, in which they are far superior to boats built in Great Britain. The long-enduring prejudice is at last removed, and no doubt the example of this company will be followed by others in this and neighboring provinces. The boats are of iron, and all were built by Messrs. Pusey, Jones & Co., of Wilmington, Delaware.

JAMES B. BOND, United States Consul.