No. 3.
Mr. Baiter to Mr. Hunter.

No. 199.]

Sir: In my dispatch No. 196, of September 13, 1877, I acknowledged the receipt of the circular (separate) of the Hon. William M. Evarts, Secretary of State, on the subject of the trade of the United States with South American countries, and soliciting suggestions from consular officers in regard to methods by which it may be developed and increased.

I have incidentally given some attention to the subject so far as it extends to the Argentine Republic, and I shall shortly make a report to the Department in reference thereto; but I write at present to say that the substance of the circular has already been approvingly noticed here by a number of the newspapers. As showing the view which is taken of it, I inclose you a slip which I take from the Herald of this city, which refers somewhat at length to the commerce of the United States with the River Plate, and quotes from my last commercial report in regard to some of the obstacles in the way of its extension.

I would add that the Argentine chargé d’affaires in the United States also writes from New York, under date of July 25, 1877, in hearty approval of Mr. Secretary Evarts’s circular, and asking the co-operation of the Argentine Government in the suggestions; at the same time asking Dr. Irogoyen, the Argentine minister of foreign affairs, to furnish the representatives of the United States with all necessary information on the subject.

I have, &c.,

E. L. BAKER,
Consul.

[Inclosure 1 in No. 199.]

COMMERCE WITH THE UNITED STATES.

The Government of the United States and its mercantile community are directing attention toward the South American countries, especially Brazil and the River Plate. A few days since the Herald published the substance of a circular note addressed to the diplomatic and consular officers in these countries by the Secretary of State, Mr. Evarts, which has already been received at the various American legations and consulates. This is indicative of an important movement, which should receive prompt recognition and co-coperation at our hands, both as a business community and a government. We are aware that the action of the latter is of necessity circumscribed and held within narrow limits in the matter of fostering trade; and we do not believe it sound in principle or good in results to relax these restrictions; but it is proper [Page 6]that commerce should be left as much as possible to itself, having free course and few hinderances; and so, in our relations with the United States, we should cordially meet the awakening interest shown by that people in a careful review of the taxes placed on commerce in the way of duties.

That there is reason for such a suggestion may be seen when it is known that the United States consul in our own city, of whom it is simple justice to say that nowhere can be found a more painstaking, capable, and efficient consular representative of the United States, declares in his report, as published in the “Commercial Relations of the United States for 1876,” that this country has a tariff of duties which discriminates against importations of the United States or against articles which it would import. Consul Baker, in this report to his government, says:

“There is no doubt that the discrimination which the Argentine customs-tariff in its tables of valuation has made against the manufactures of the United States and in favor of other countries has had much to do in preventing the introduction of our staples. Because of the superiority of our cotton fabrics, they have a higher valuation placed upon them in, the custom-house, and by that much they have a heavier duty to pay.”

It is not our desire to discuss the relative merits of manufactures from competing countries, as shown in plowing matches in Southern Russia or in any other way, but we would call the attention of the minister of finance and of the mercantile community to this assertion, which is not only made officially by the United States consul, but is corroborated by importers of goods from the United States.

We cannot afford as a government to rest under such an imputation of unfairness, nor can importers consent to have a market closed against them by a discriminating tariff. The heaviest business done in importations to the River Plate, outside of Buenos Ayres, is by a house which imports almost everything from the United States, including cotton and woolen fabrics, agricultural implements, naval stores, provisions, &c., but this is in Uruguay, where there is no discriminating duty to prevent dealing in the most advantageous market, which would tend to show that there is truth in the charge of the consul; for a charge, and a serious one, it is, if true.

Some time since the Herald published the particulars of a steamship-line soon to be put on between New York and Rio de Janeiro, and to the Plate if affairs are in such condition as to make it feasible, and we trust we shall not be behind our opportunity in removing everything that can be said to stand as a stumbling-block in the way of more intimate commercial relations.

[Inclosure 2 in No. 199.—Translation.]

[From El Industrial of Buenos Ayres.]

AMERICAN ZOLLYEREIN.

projection—our commerce with the united states.

We publish below an interesting document, in which the advantages of protection are shown, and in which it is defended by Mr. Evarts, minister of foreign relations of the great republic. This document furnishes the best evidence of the advantages of the protective system among young nations. The United States are giving us a lesson by which we ought to profit. We recommend its perusal on account of the data which it contains and the harmony of the views therein expressed with our own.

Mr. Minister: Mr. William M. Evarts, the Secretary of State, under whose charge is the Department of Foreign Relations of the United States, has sent special instructions to his diplomatic and consular agents in foreign countries to examine and report concerning the demands of consumption of the countries to which they are respectively accredited, with a view to extending the market for American manufactures, and in order to enable the United States to conclude suitable commercial conventions with those countries.

We, Mr. Minister, can purchase to advantage many articles manufactured in the United States; but we also have many products to sell in exchange.

There is a harmony, then, between our necessities, and the time seems to have arrived to present our case in such a manner as to suit Our interests by granting privileges in exchange for privileges if necessary, and obtaining on our part a reduction of the export duties on our wool, hides, and other articles of Argentine production. This will [Page 7]develop our commercial relations with the United States, and as an immediate consequence will increase direct steam communication, thereby facilitating travel, the conveyance of merchandise and postal correspondence between the two countries.

Mr. Evarts seems to base his policy on the following arguments which have been published by the press of this country:

The industrial interests of the, United States do not require free trade. The first duty of a government is the judicious protection of the productions of the capital and labor of its own people.

The agricultural classes of the West and the manufacturing classes of the East are mutually interested in the preservation and promotion of domestic industry, because no one class of people can long prosper without the co-operation of the productive labor of the others. Protection is only necessary when it defends domestic industry against ruinous foreign competition. By the improvement of machinery, the cost of production has been considerably diminished in the United States; a judicious encouragement given to American manufactures will give greater energy to their competition with foreign articles.

It is neither protection nor free trade that the United States need, but full trade. The immense productions of the country require an outlet. Production is in excess of the home demand. Take iron for instance. In Pennsylvania, there are 478 furnaces extinguished, the total number being 714; this represents a paralyzed capital of $100,000,000. The capacity of the total number of these furnaces is equal to double the demand, and the same is the case with other industries. Although agricultural productions are a great source of wealth in the United States, yet it is necessary to encourage manufacturing and commercial industry if we are to attain a prominent position among the nations of the world in the contest of peaceful arts.

The domestic exports of the United States during the past year were as follows: Cotton, $192,000,000; grain, $33,000,000; wheat, $68,000,000; Hour, $24,000,000; other articles, $80,000,000.

The exports of manufactured articles were: Iron and iron manufactures, $9,000,000; steel, $450,000; sole leather, $8,000,000; agricultural implements, $2,500,000.

The imports of manufactured articles: Cotton, $20,000,000; flax, $15,000,000; iron and steel, $10,000,000; silk, $22,000,000; sugar, $71,000,000; wool and manufactures, $38,000,000.

By the aid of wise legislation the greater part of these manufactured articles can be produced in the United States, and the hundreds of millions which are annually sent abroad in payment therefor can be kept at home.

Of the total value of the imports to the United States $315,000,000 were brought in foreign vessels and only $135,000,000 in American vessels. Thus far Mr. Evarts.

Let us now see what the press of the United States says. The following is an extract from the leading editorial of the New York Herald of July 18, 1877:

“One of the greatest ideas of American statesmen has been with respect to this closeness of commercial relations between the United States and the nations of North, Central, and South America. The possibility of a great American Zollverein or commercial union, comprising all the States of both American continents, may be a dream of the future; but it is a dream for the realization of which every American who desires to serve his country may well labor with enthusiasm. We are to-day one of the greatest manufacturing nations of the world. We use more and better labor-saving machinery than any European nation. Not one of the other nations on these two continents has paid much attention to manufactures. They are not like the nations of Europe, our competitors. They produce principally the raw material used in manufacturing, which they exchange for manufactured goods. Thus they will continue for many years to furnish us an almost unlimited market for our manufactures, if we only have sufficient shrewdness and foresight to make use of our advantages. What we require for this purpose is what Mr. Evarts can do for us; we need new and better commercial conveniences. A few figures will show how great are the opportunities (too long neglected by us) to create a market for our excess of manufactures. Of, the total imports of Mexico, which amount to $30,000,000, we send only $5,000,000. Canada imports nearly $130,000,000 per annum, but takes only $34,000,000 from us, her nearest neighbor. Brazil imports about $85,000,000, but takes a beggarly seven millions of our products, although we buy to the amount of $35,000,000 from her. Chili imports about $40,000,000, but takes only two millions of our manufactures. The Argentine Confederation imports to the value of $54,000,000 a year, but buys of us only a million and a half. The account is as one-sided in almost all the South and Central American countries. They buy elsewhere, mainly because they sell their raw materials elsewhere. From Chili, for instance we bought in 1876, only to the value of $586,000, while her total exports amounted to over thirty-five millions. The total exports of the Argentine Confederation amount to over fifty millions, of which we buy about four millions. It is easy to see that there is something wrong in all this. We neither buy nor sell as our skill, the excellence and variety of our products, and the enterprise of our people would lead us to expect; and when we look over the figures representing [Page 8]the total imports of these countries who are our neighbors and our natural allies no one can help seeing what an immense opening there is right here at our doors for the sale of our surplus products. We can do without Europe. We need not seek to sell a yard of cloth or a pound of any manufactured article in Europe, if only we can command, as we ought, the great and growing commerce of North and South America.”

The Argentine Republic should receive these words of the government and press of the United States with sympathy and interest, and co-operate to the extent of its ability in order to obtain its share of the benefits which must result. Your excellency will doubtless communicate all necessary information to the diplomatic and consular officers of the United States in the Argentine Republic, and suitable instructions to this legation to enable it properly to sustain our side of the question.

I take pleasure on this occasion in reiterating to your excellency the assurances of my highest and most distinguished considerations.

GERVASIO VIDELA DORNA.

His Excellency Dr. Don Bernardo be Irigoyen,
Minister of Foreign Relations of the Argentine Republic.